(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)

~~Registrant’s~~Registrant's telephone number, including area code: ~~(212) 355-5515~~(866) 432-6736

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

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

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

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

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

As of ~~June~~January 5, ~~2020, 41,400,000~~2023, E2open Parent Holdings, Inc. had Class A ~~ordinary shares,~~common stock, $0.001 par value ~~$0.0001~~ per share, ~~and 15,350,000 Class B ordinary~~of 302,452,552 shares ~~par value $0.0001 per share, were~~ issued and 302,275,898 shares outstanding.

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

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

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

~~(1) This number included up to 1,350,000 Class B ordinary shares subject to forfeiture if~~ the ~~over-allotment option was not exercised in full~~effect of the volatile, negative or ~~in part~~uncertain economic and political conditions, including the invasion of Ukraine by Russia, the ~~underwriters. On April 24, 2020, the underwriters exercised their over-allotment option; thus, the Founder Shares were no longer subject to forfeiture.~~

~~(2) On March 6, 2020~~related sanctions and ~~April 23, 2020, the Company effected share capitalizations resulting in an aggregate of 15,350,000 Class B ordinary shares outstanding. All shares and associated amounts~~other measures that have been ~~retroactively restated~~and continue to ~~reflect~~be imposed in response to the ~~share capitalization, (see Note 5).~~

~~The accompanying notes are an integral part~~conflict, inflation, fluctuations in foreign currency exchange rates and the potential effects of these factors on our business, results of operations and financial condition as well as our clients' businesses and levels of business activity;

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

~~UNAUDITED CONDENSED STATEMENT OF OPERATIONS~~Condensed Consolidated Statements of Operations

~~FOR THE PERIOD FROM JANUARY 14, 2020 (INCEPTION) THROUGH MARCH 31, 2020~~(Unaudited)

~~(1) This number included up~~See notes to 1,350,000 Class B ordinary shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters. On April 24, 2020, the underwriters exercised their over-allotment option; thus, the Founder Shares were no longer subject to forfeiture.

(2) On March 6, 2020 and April 23, 2020, the Company effected share capitalizations resulting in an aggregate of 15,350,000 Class B ordinary shares outstanding. All shares and associated amounts have been retroactively restated to reflect the share capitalization, (see Note 5).

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

~~UNAUDITED CONDENSED STATEMENT OF CASH FLOWS~~Condensed Consolidated Statements of Stockholders' Equity

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

~~NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND BASIS OF PRESENTATION~~

CC Neuberger Principal Holdings I ~~(the "Company") is~~(CCNB1) was a ~~newly incorporated~~ blank check company incorporated in the Cayman Islands on January 14, ~~2020. The Company was incorporated~~2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified ("Business Combination"). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus in the financial, technology and business services sectors.

At March 31, 2020, the Company had not yet commenced operations. All activity for the period from January 14, 2020 (inception) through March 31, 2020 relates to the Company's formation and the Initial Public Offering, which is described below. The Company has selected December 31 as its fiscal year end.

~~The Company’s~~businesses. CCNB1's sponsor iswas CC Neuberger Principal Holdings I Sponsor LLC, a Delaware limited liability company ~~(the "Sponsor")~~(Sponsor). ~~The registration statement for the Company’s Initial Public Offering was declared effective~~CCNB1 became a public company on ~~April 23, 2020. On~~ April 28, 2020 ~~the Company consummated~~through an initial public offering.

On February 4, 2021 (Closing Date), CCNB1 and E2open Holdings, LLC and its ~~Initial Public Offering of~~ ~~41,400,000~~ ~~units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including~~ ~~5,400,000~~ additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $414.00 million, and incurring offering costs of approximately $24.53 million, inclusive of $14.49 million in deferred underwriting commissions and approximately $0.9 million in deferred legal fees (Note 6).

~~Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of~~ ~~10,280,000~~ ~~warrants (each,~~operating subsidiaries (E2open Holdings) completed a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of approximately $10.28 million (Note 4).

Upon the closing of the Initial Public Offering and the Private Placement, $414.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust Account”) and invested in United States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determinedbusiness combination (Business Combination) contemplated by the ~~Company, until the earlier of: (i) the completion of a~~definitive Business Combination ~~and (ii) the distribution of the Trust Account as described below.~~

The Company's management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company's initial BusinessAgreement entered into on October 14, 2020 (Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting discount held in trust and taxes payable on the income earned on the Trust Account) at the time the Company signs a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended, or the Investment Company Act.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations)Agreement). The per-share amount to be distributed to public shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which will be adopted by the Company upon the consummation of the Initial Public Offering (the "Amended and Restated Memorandum and Articles of Association"), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the "SEC"), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holders of our Founder Shares prior to this Initial Public Offering (the "Initial Shareholders") have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Shareholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination. In addition, the Company has agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior consent of the Sponsor.

Notwithstanding the foregoing, the Company's Amended and Restated Memorandum and Articles of Association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a "group" (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.

The Company's Sponsor, executive officers, directors and director nominees will have agreed not to propose an amendment to the Company's Amended and Restated Memorandum and Articles of Association that would affect the substance or timing of the Company's obligation to provide for the redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.

If the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or April 28, 2022 (the "Combination Period"), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes paid or payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company's board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company's obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. The Company's Amended and Restated Memorandum and Articles of Association will provide that, if the Company winds up for any other reason prior to the consummation of the initial Business Combination, the Company will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than 10 business days thereafter, subject to applicable Cayman Islands law.

In connection with the ~~redemption of 100%~~finalization of the ~~Company's outstanding Public Shares for~~Business Combination, CCNB1 changed its name to "E2open Parent Holdings, Inc." (E2open) and changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware (Domestication).

Immediately following the Domestication, various entities merged with and into E2open, with E2open as the surviving company. Additionally, E2open Holdings became a ~~portion~~subsidiary of E2open with the ~~funds~~equity interests of E2open Holdings held by E2open and existing owners of E2open Holdings. The existing owners of E2open Holdings are considered noncontrolling interests in the ~~Trust Account, each holder will receive~~condensed consolidated financial statements.

We are headquartered in Austin, Texas. We are a ~~full pro rata portion~~leading provider of ~~the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account~~cloud-based, end-to-end omni-channel and ~~not previously released to the Company to pay the Company's taxes payable (less taxes payable~~supply chain management software. Our software combines networks, data and ~~up to $100,000 of interest to pay dissolution expenses).~~

The Initial Shareholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company's Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company's indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). In the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers (except the Company's independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~As of March 31, 2020, the Company had no cash and working capital deficit of approximately $567,000.~~

The Company’s liquidity needs up to March 31, 2020 were satisfied through payment of $25,000 for offering costs made by the Sponsor on behalf of the Company in exchange for the issuance of the Founder Shares to the Sponsor, and the advancement of funds by the Sponsor of approximately $54,000 to the Company to cover for offering costs in connection with the Initial Public Offering. Subsequent to March 31, 2020, the Company’s liquidity has been satisfied through additional loans from the Sponsor, for a total outstanding amount of approximately $125,000 under the Note, and the proceeds from the consummation of the Private Placement not held in the Trust Account of approximately $2.0 million. On May 29, 2020, the Company repaid the Note to the Sponsor in full. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligatedapplications to provide a deeply embedded, mission-critical platform that allows clients to optimize their supply chain by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the ~~Company Working Capital Loans (see Note 5). To date, there were no amounts outstanding under any Working Capital Loan.~~

~~Based on the foregoing, management determined that the Company has sufficient liquidity to meet its anticipated obligations until the earlier~~business-critical nature of ~~the consummation~~our solutions, we maintain deep, long-term relationships with our clients across a wide range of ~~the initial Business Combination or liquidation.~~end-markets, including technology, consumer, industrial and transportation, among others.

3. Acquisitions

Logistyx Acquisition

On March 2, 2022, E2open, LLC acquired all of the issued and outstanding membership interests of Logistyx for a purchase price of $185 million, with an estimated fair value of $183.4 million, including $90 million paid in cash at closing (Logistyx Acquisition). An additional $95 million, which was subject to standard working capital adjustments and other contractual provisions, was paid in two installments on May 31, 2022 and September 1, 2022. We had the option to finance the remaining payments, at our discretion, through cash or a combination of cash and Class A Common Stock. The May 31, 2022 payment of $37.4 million was paid in cash.

On August 15, 2022, E2open, LLC and the sellers of Logistyx agreed to extend the final payment to September 1, 2022 allowing both parties to finalize working capital adjustments and other contractual provisions. On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx as the final installment payment for the Logistyx Acquisition which reflected a working capital adjustment of $3.6 million. The Logistyx sellers disputed the working capital adjustment pursuant to the terms of the Membership Interest Purchase Agreement. During October 2022, the parties agreed to a working capital adjustment of $2.6 million. The additional payment for working capital was made to Logistyx on December 5, 2022.

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

The following summarizes the consideration paid for the Logistyx Acquisition.


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

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


($ in thousands)	Preliminary Purchase Price Allocation			Adjustments (3)			Updated Preliminary Purchase Price Allocation
Cash and cash equivalents	$	1,563		$	—		$	1,563
Account receivable, net		5,332			—			5,332
Other current assets		3,335			—			3,335
Property and equipment, net		144			—			144
Intangible assets		67,200			(400	)		66,800
Goodwill (1)		125,896			(2,150	)		123,746
Non-current assets		619			—			619
Accounts payable		(5,897	)		—			(5,897	)
Current liabilities		(3,931	)		—			(3,931	)
Deferred revenue (2)		(10,747	)		—			(10,747	)
Non-current liabilities		(158	)		—			(158	)
Total assets acquired and liabilities assumed	$	183,356		$	(2,550	)	$	180,806

(1)

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

(2)

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

(3)

The adjustments primarily relate to the $0.4 million change in fair value of the intangible assets due to a change in the deferred revenue and $2.6 million working capital adjustment.

The fair value of the intangible assets is as follows:


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

(1)

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

(2)

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

(3)

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

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

We incurred $4.0 million ($0.7 million as of February 28, 2022) of expenses directly related to the Logistyx Acquisition through November 30, 2022 which are included in acquisition-related expense in the Condensed Consolidated Statements of Operations. Included in these expenses were $1.6 million acquisition-related advisory fees which were incurred on March 2, 2022. At the closing of the Logistyx Acquisition, we paid $0.5 million of acquisition-related advisory fees and other expenses related to the Logistyx Acquisition on behalf of Logistyx. These expenses were part of the purchase price consideration and not recognized as expense in our or Logistyx's Condensed Consolidated Statements of Operations.

BluJay Acquisition

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

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

The following summarizes the consideration paid for the BluJay Acquisition.


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

(1)

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


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

(2)

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

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


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

(1)

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

(2)

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

(3)

(4)

The adjustments primarily relate to the jurisdictional netting of income taxes, impact of a tax rate change on the deferred balance and the ~~reported amounts~~reinstatement of ~~revenues and expenses during~~income tax receivables along with the ~~reporting period.~~

~~Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate~~true-up of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

accrued liabilities.

~~Concentration of credit risk~~

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. At March 31, 2020, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

~~Financial instruments~~

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


($ in thousands)	Useful Lives	Fair Value
Trade name	1	$	3,800
Developed technology (1)	5.9		301,000
Client relationships (2)	3		180,000
Total intangible assets		$	484,800

(1)

The developed technology represents technology developed by BluJay and ~~liabilities,~~acquired by E2open, which ~~qualify as financial instruments under~~was valued using the ~~FASB ASC 820, "Fair Value Measurements~~multi-period excess earnings method, a form of the income approach considering technology migration.

(2)

The client relationships represent the existing client relationships of BluJay and ~~Disclosures," approximates~~acquired by E2open that was estimated by applying the ~~carrying amounts represented in~~with-and-without methodology, a form of the ~~balance sheet.~~

income approach.

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Deferred Offering Costs Associated with the Initial Public Offering~~

~~Deferred offering costs consisted~~We incurred $33.7 million of ~~legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are~~expenses directly related to the ~~Initial Public Offering~~BluJay Acquisition during the year ended February 28, 2022, which are included in acquisition-related expenses in the Condensed Consolidated Statements of Operations. Included in these expenses were $13.4 million acquisition-related advisory fees which were incurred on the Acquisition Date. In addition, we paid $10.4 million of debt issuance costs associated with the $380.0 million incremental term loan on the Acquisition Date which were capitalized and ~~that were charged to shareholders’ equity upon the completion~~recorded as a reduction of the ~~Initial Public Offering~~outstanding debt balances. At the closing of the BluJay Acquisition, we paid $7.1 million in ~~April 2020.~~fees related to the $300.0 million PIPE financing which were recorded as a reduction to the proceeds from the issuance of Class A Common Stock in the Condensed Consolidated Statements of Stockholders' Equity. Additionally, we paid $26.7 million of acquisition-related advisory fees and other expenses related to the BluJay Acquisition on behalf of BluJay. These expenses were part of the purchase price consideration and not recognized as expense in our or BluJay's Condensed Consolidated Statements of Operations.

Additionally, the Investor Rights Agreement was amended and restated to add certain of BluJay's existing stockholders as parties, including certain affiliates of Francisco Partners and Temasek.The Investor Rights Agreement provides Francisco Partners and Temasek the right to nominate one member each to our board of directors. Mr. Deep Shah, nominated by Francisco Partners, and Mr. Martin Fichtner, nominated by Temasek, became new directors on September 1, 2021.

~~Net loss per ordinary share~~Unaudited Pro Forma Operating Results

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


	Three Months Ended			Nine Months Ended
($ in millions)	November 30, 2021			November 30, 2021
Total revenue	$	147.5		$	407.4
Net loss		(69.0	)		(326.6	)
Less: Net loss attributable to noncontrolling interest		(7.2	)		(35.9	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(61.8	)	$	(290.7	)

~~The Company complies with accounting~~

4. Liquidity and ~~disclosure~~Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of ~~ASC Topic 260, "Earnings Per Share." Net loss per share~~our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits, as well as interest, debt repayments, capital expenditures and operating expenses. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of operating cash flows.

We had $85.7 million in cash and cash equivalents as of November 30, 2022. We believe our existing cash and cash equivalents, cash provided by operating activities, and, if necessary, the borrowing capacity of up to $145.0 million available under our 2021 Revolving

Credit Facility (see Note 13, Notes Payable) will be sufficient to meet our working capital, debt repayment and capital expenditure requirements for at least the next twelve months.

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

5. Accounts Receivable

Accounts receivable, net consisted of the following:


($ in thousands)	November 30, 2022			February 28, 2022
Accounts receivable	$	125,940		$	143,799
Unbilled receivables		28,520			14,597
Less: Allowance for credit losses		(5,003	)		(3,055	)
Accounts receivable, net	$	149,457		$	155,341

Unbilled receivables represent revenue recognized for performance obligations that have been satisfied but for which amounts have not been billed, which we also refer to as contract assets.

Account balances are written off against the allowance for credit losses when we believe that it is ~~computed by dividing~~probable that the receivable balance will not be recovered.

The allowance for credit losses was comprised of the following:


($ in thousands)	Amount
Balance, February 28, 2021	$	(908	)
BluJay Acquisition		(1,779	)
Additions		(1,917	)
Write-offs		1,549
Balance, February 28, 2022		(3,055	)
Logistyx Acquisition		(267	)
Additions		(2,667	)
Write-offs		986
Balance, November 30, 2022	$	(5,003	)

6. Prepaid and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


($ in thousands)	November 30, 2022		February 28, 2022
Prepaid software and hardware license and maintenance fees	$	11,319	$	6,022
Income and other taxes receivable		4,638		4,544
Prepaid insurance		1,082		3,401
Deferred commissions		4,169		2,867
Prepaid marketing		939		1,124
Security deposits		2,663		1,044
Other prepaid expenses and other current assets		1,651		7,241
Total prepaid expenses and other current assets	$	26,461	$	26,243

Amortization of software licenses held under financing leases is included in cost of revenue and operating expenses. Prepaid maintenance, services and insurance are expensed over the term of the underlying agreements.

7. Goodwill

During the fourth quarter of each fiscal year, we assess our goodwill for potential impairment. This impairment testing is applied more frequently if we become aware of events or circumstances since the last impairment testing that might call into question whether the current balances are fairly recorded. During the second quarter of fiscal 2023, the market price of our Class A common stock and market capitalization declined significantly. This decline resulted in us determining that a triggering event occurred and an interim goodwill impairment assessment was performed.

We performed a qualitative "Step 0" goodwill impairment assessment during the second quarter of fiscal 2023 which indicated that a quantitative "Step 1" impairment analysis needed to be performed as well. The fair value of E2open was determined using a discounted cash flow method, guideline public company method and guideline transaction method using an income-based and market-based approach.

We calculated the fair value of E2open under three different methods: discounted cash flow method, guideline public company method and guideline transaction method. The discounted cash flow method was based on the present value of estimated future cash flows which were based on management's estimates of revenue growth rates and net ~~loss by~~operating income margins, taking into consideration market and industry conditions. The discount rate used was based on the weighted-average cost of capital adjusted for the risk, size premium and business-specific characteristics related to the business's ability to execute on the projected cash flows. Under the guideline public company method, the fair value was based on forward-looking earnings multiples derived from comparable publicly traded companies with similar market position and size. The unobservable inputs used to measure the fair value included projected revenue growth rates, the weighted average ~~number~~cost of capital, the normalized working capital level, capital expenditures assumptions, profitability projections, control premium, the determination of appropriate market comparison companies and terminal growth rates. Under the guideline transaction method, the fair value was based on pricing multiples derived from recently sold companies with similar characteristics to ours. The three approaches generated similar results and indicated that the fair value of E2open's equity and goodwill was less than its carrying amount. Therefore, in the second quarter of fiscal 2023, we recognized an impairment charge of $514.8 million to goodwill.

We did not record a goodwill impairment charge for the three months ended November 30, 2022 or the three and nine months ended November 30, 2021.

The following table presents the changes in goodwill:


($ in thousands)	Amount
Balance, February 28, 2021	$	2,628,646
Business Combination purchase price adjustment (1)		407
BluJay Acquisition (2)		1,155,321
Currency translation adjustment		(27,503	)
Balance, February 28, 2022		3,756,871
BluJay Acquisition adjustment (2)		(5,455	)
Logistyx Acquisition (3)		123,746
Impairment charge		(514,816	)
Currency translation adjustment		(54,113	)
Balance, November 30, 2022	$	3,306,233

(1)

Consists of the post-closing adjustment of consideration and associated tax adjustments required as part of the merger transaction pursuant to Section 3.5 of the Business Combination Agreement. On July 6, 2021, we issued additional Class A Common Stock and Common Units valued at $3.0 million in total pro rata to the various parties who received consideration in February 2021 at the closing of the Business Combination in the form of shares of Class A Common Stock, Common Units and cash. Additional tax adjustments were required during the third quarter of fiscal year 2022.

(2)

Represents the goodwill acquired in the BluJay Acquisition as of September 1, 2021 and subsequent purchase price adjustments. See Note 3, Acquisitions for additional information.

(3)

Represents the goodwill acquired in the Logistyx Acquisition as of March 2, 2022 and subsequent purchase price adjustments. See Note 3, Acquisitions for additional information.

8. Intangible Assets, Net

Intangible assets, net consisted of the following:


	November 30, 2022
($ in thousands)	Weighted Average Useful Life	Cost		Accumulated Amortized			Net
Indefinite-lived:
Trademark / Trade name	Indefinite	$	110,000	$	—		$	110,000
Definite-lived:
Client relationships	13.8		500,907		(100,021	)		400,886
Technology	7.3		688,858		(145,544	)		543,314
Content library	10.0		50,000		(9,122	)		40,878
Trade name	1.0		3,811		(3,687	)		124
Backlog	2.5		800		(240	)		560
Total definite-lived			1,244,376		(258,614	)		985,762
Total intangible assets		$	1,354,376	$	(258,614	)	$	1,095,762


	February 28, 2022
($ in thousands)	Weighted Average Useful Life	Cost		Accumulated Amortized			Net
Indefinite-lived:
Trademark / Trade name	Indefinite	$	109,998	$	—		$	109,998
Definite-lived:
Client relationships	13.6		476,584		(45,467	)		431,117
Technology	7.3		666,160		(72,414	)		593,746
Content library	10.0		50,000		(5,372	)		44,628
Trade name	1.0		3,705		(1,804	)		1,901
Total definite-lived			1,196,449		(125,057	)		1,071,392
Total intangible assets		$	1,306,447	$	(125,057	)	$	1,181,390

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

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

Amortization of intangible assets is recorded in cost of revenue and operating expenses in the Condensed Consolidated Statements of Operations. We recorded amortization expense related to intangible assets of $44.4 million and $44.5 million for the three months ended November 30, 2022 and 2021, respectively. We recorded amortization expense related to intangible assets of $136.4 million and $75.7 million for the nine months ended November 30, 2022 and 2021, respectively.

9. Property and Equipment, Net

Property and equipment, net consisted of the following:


($ in thousands)	November 30, 2022			February 28, 2022
Computer equipment	$	47,445		$	33,228
Software		58,515			43,821
Furniture and fixtures		3,149			3,509
Leasehold improvements		10,493			9,067
Gross property and equipment		119,602			89,625
Less accumulated depreciation and amortization		(46,498	)		(23,688	)
Property and equipment, net	$	73,104		$	65,937

Computer equipment and software include assets held under financing leases. Amortization of assets held under financing leases is included in depreciation expense. See Note 25, Leases for additional information regarding our financing leases.

Depreciation expense was $8.1 million and $6.0 million for the three months ended November 30, 2022 and 2021, respectively. Depreciation expense was $23.4 million and $15.8 million for the nine months ended November 30, 2022 and 2021, respectively.

We had capitalized software costs of $32.0 million and $20.9 million as of November 30, 2022 and February 28, 2022, respectively. We recognized $1.4 million and $0.8 million of amortized capitalized software development costs for the three months ended November 30, 2022 and 2021, respectively, and $3.6 million and $2.0 million for the nine months ended November 30, 2022 and 2021, respectively.

10. Investments

On February 4, 2022, we made a minority investment of $2.5 million in a private firm focused on supply chain financing. We made the required second investment of $2.5 million on May 5, 2022 along with $0.5 million of transaction fees.

This minority investment does not have a readily determinable fair value; therefore, we elected the measurement alternative for our minority investment. The investment is measured at cost, less impairment and adjusted for qualifying observable price changes and recorded in other noncurrent assets in the Condensed Consolidated Balance Sheets.

We regularly evaluate the carrying value of our investment for impairment and whether any events or circumstances are identified that would significantly harm the fair value of the investment. In the event a decline in fair value is less than the investment's carrying value, we will record an impairment charge in other income (expense) in the Condensed Consolidated Statements of Operations. We have not recorded any impairment charges related to this minority investment.

11. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:


($ in thousands)	November 30, 2022		February 28, 2022
Accrued compensation	$	38,939	$	63,101
Accrued severance and retention		2,536		1,909
Trade accounts payable		33,287		33,158
Accrued professional services		3,634		5,440
Restructuring liability		230		778
Interest payable		18,257		2,398
Client deposits		2,483		2,214
Other		11,836		19,546
Total accounts payable and accrued liabilities	$	111,202	$	128,544

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

12. Tax Receivable Agreement

E2open Holdings entered into a Tax Receivable Agreement with selling equity holders of E2open Holdings that requires us to pay 85% of the tax savings that are realized because of increases in the tax basis in E2open Holdings' assets. This increase is either from the sale or exchange of the Common Units for shares of Class A Common Stock and cash, as well as from tax benefits attributable to payments under the Tax Receivable Agreement. We will retain the benefit of the remaining 15% of these cash savings. The Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless E2open Holdings exercises its right to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits under the Tax Receivable Agreement or certain other accelerated events occur.

Quarterly tax distributions will be paid to the holders of Common Units on a pro rata basis based upon an agreed upon formula related to the taxable income of E2open Holdings allocable to holders of Common Units. Generally, these tax distributions will be computed based on the Company's estimate of taxable income of E2open Holdings allocable to each holder of Common Units (based on certain assumptions), multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for a U.S. corporation organized under the laws of the State of Delaware, taking into account all jurisdictions in which the Company is required to file income tax returns together with the relevant apportionment information and the character of E2open Holdings' income, subject to various adjustments.

Significant inputs and assumptions were used to estimate the future expected payments including the timing of the realization of the tax benefits, a tax rate of 24.1% and an imputed interest rate of 7% based on our cost of debt plus an incremental premium at the Closing Date. Changes in any of these or other factors are expected to impact the timing and amount of gross payments. The fair value of these obligations will be accreted to the amount of the gross expected obligation. In addition, if E2open Holdings were to exercise its right to terminate the Tax Receivable Agreement or certain other acceleration events occur, E2open Holdings will be required to make immediate cash payments. Such cash payments will be equal to the present value of the assumed future realized tax benefits based on a set of assumptions and using an agreed upon discount rate, as defined in the Tax Receivable Agreement. The early termination payment may be made significantly in advance of the actual realization, if any, of those future tax benefits. Such payments will be calculated based on certain assumptions, including that E2open Holdings has sufficient taxable income to utilize the full amount of any tax benefits subject to the Tax Receivable Agreement over the period specified therein. The payments that E2open Holdings will be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available, but we expect the cash tax savings we will realize from the utilization of the related tax benefits will exceed the amount of any required payments.

Pursuant to ASC 805, Business Combination and relevant tax law, we have calculated the fair value of the tax receivable agreement payments related to the transaction at the acquisition date and identified the timing of the utilization of the tax attributes. Under ASC 805, the Tax Receivable Agreement liability, as of the acquisition date, will be revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in the gain (loss) from change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations in the period in which the event occurred. Interest will accrue on the tax receivable agreement liability at a rate of LIBOR plus 100 basis points. In addition, under ASC 450, Contingencies transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis.

The Tax Receivable Agreement liability was $58.2 million and $66.6 million as of November 30, 2022 and February 28, 2022, respectively. The tax rate used in the calculation was 24.2% and 24.1% as of November 30, 2022 and February 28, 2022, respectively. The discount rate used for the ASC 805 calculation was 10.4% and 8.2% as of November 30, 2022 and February 28, 2022, respectively, based on our cost of debt plus an incremental premium. During the three months ended November 30, 2022 and 2021, a gain of $2.7 million and a loss of $1.5 million, respectively, was recorded as a change in the tax receivable agreement liability related to the ASC 805 discounted liability. During the nine months ended November 30, 2022 and 2021, a gain of $9.1 million and a loss of $4.6 million, respectively, was recorded as a change in the tax receivable agreement liability related to the ASC 805 discounted liability. During the nine months ended November 30, 2022 and 2021, the Tax Receivable Agreement liability under ASC 450 increased by $0.7 million and $13.2 million, respectively.

13. Notes Payable

Notes payable outstanding were as follows:


($ in thousands)	November 30, 2022			February 28, 2022
2021 Term Loan	$	1,080,941		$	899,163
2021 Revolving Credit Facility		10,000			80,000
Other notes payable		—			47
Total notes payable		1,090,941			979,210
Less unamortized debt issuance costs		(27,520	)		(26,536	)
Total notes payable, net		1,063,421			952,674
Less current portion		(20,962	)		(89,097	)
Notes payable, less current portion, net	$	1,042,459		$	863,577

2021 Term Loan and Revolving Credit Facility

In February 2021, E2open, LLC, our subsidiary, entered into a credit agreement (Credit Agreement) that provided for $525.0 million in term loans (2021 Term Loan) and $75.0 million in commitments for revolving credit loans (2021 Revolving Credit Facility) with a $15.0 million letter of credit sublimit. In September 2021, the Credit Agreement was amended to include a $380.0 million incremental term loan, an increase in the letter of credit sublimit from $15.0 million to $30.0 million and an increase in the 2021 Revolving Credit Facility from $75.0 million to $155.0 million. In April 2022, the Credit Agreement was amended to include a $190.0 million incremental term loan.

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

The proceeds from the $190.0 million incremental term loan were used to repay the $80.0 million outstanding balance under the 2021 Revolving Credit Facility incurred to finance the initial payment for the Logistyx Acquisition. The additional cash was used to pay the $37.4 million payment due to Logistyx in May 2022 and for general corporate purposes.

The Credit Agreement is guaranteed by E2open Intermediate, LLC, our subsidiary, and certain wholly owned subsidiaries of E2open, LLC, as guarantors, and is supported by a security interest in substantially all of the guarantors' personal property and assets. The Credit Agreement contains certain customary events of default, representations and warranties as well as affirmative and negative covenants.

As of November 30, 2022 and February 28, 2022, the 2021 Term Loan had a variable interest rate of 6.64% and 4.00%, respectively. There were $10.0 million outstanding borrowings at an interest rate of 6.77%, no letters of credit and $145.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of November 30, 2022. There were $80.0 million borrowings outstanding at an interest rate of 5.25%, no letters of credit and $75.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of February 28, 2022. We were in compliance with the First Lien Leverage Ratio for the Credit Agreement as of November 30, 2022 and February 28, 2022.

14. Contingent Consideration

Business Combination

The contingent consideration liability is due to the issuance of Series B-1 and B-2 common stock and Series 1 restricted common units (RCUs) and Series 2 RCUs of E2open Holdings as part of the Business Combination. These shares and units were issued on a proportional basis to each holder of Class A shares in CCNB1 and Common Units of E2open Holdings. These restricted shares and Common Units are treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and will be remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurement will be recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value is not part of our core operating activities.

The contingent consideration liability was $27.8 million and $45.6 million as of November 30, 2022 and February 28, 2022, respectively. The fair value remeasurements resulted in a gain of $6.3 million and loss of $1.1 million for the three months ended November 30, 2022 and 2021, respectively. The fair value remeasurements resulted in a gain of $17.8 million and loss of $77.5 million for the nine months ended November 30, 2022 and 2021, respectively.

The 8,120,367 shares of Series B-1 common stock, including the Sponsor Side Letter shares noted below, automatically convert into our Class A Common Stock on a one-to-one basis upon the occurrence of the first day on which the 5-day VWAP of our Class A Common Stock is equal to at least $13.50 per share; provided, however, that the reference to $13.50 per share shall be decreased by the aggregate per share amount of dividends actually paid in respect of a share of Class A Common Stock following the closing of the Business Combination.

As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis. As such, 8,120,273 shares of Series B-1 common stock converted into 8,120,273 shares of Class A Common Stock. There were 94 shares of Series B-1 common stock pending conversion as of November 30, 2022.

There were 3,372,184 shares of Series B-2 common stock outstanding as of November 30, 2022 and February 28, 2022. The Series B-2 common stock will automatically convert into our Class A Common Stock on a one-to-one basis upon the occurrence of the first day on which the 20-day VWAP is equal to at least $15.00 per share; provided, however, that the reference to $15.00 per share shall be decreased by the aggregate per share amount of dividends actually paid in respect of a share of Class A Common Stock following the closing of the Business Combination.

Similar to the Series B-1 common stock, the 4,379,557 shares of Series 1 RCUs vest and become Common Units of E2open Holdings at such time as the 5-day VWAP of the Class A Common Stock is at least $13.50 per share; however, the $13.50 per share threshold will be decreased by the aggregate amount of dividends per share paid following the closing of the Business Combination.

As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series 1 RCUs to vest and become Common Units of E2open Holdings. As such, 4,379,557 Series 1 RCUs became 4,379,557 Common Units of E2open Holdings along with entitling the holders of the newly vested common units to 4,379,557 shares of Class V Common Stock. Catch-Up Payments were not required as a result of the Series 1 RCU vesting.

There were 2,627,724 shares of Series 2 RCUs outstanding as of November 30, 2022 and February 28, 2022. Similar to the Series B-2 common stock, the Series 2 RCUs will vest (a) at such time as the 20-day VWAP of the Class A Common Stock is at least $15.00 per share; however, the $15.00 per share threshold will be decreased by the aggregate amount of dividends per share paid following the closing of the Business Combination; (b) upon the consummation of a qualifying change of control of us or the Sponsor and (c) upon the qualifying liquidation defined in the limited liability company agreement.

Upon the conversion of an RCU, the holder of such RCU will be entitled to receive a payment equal to the amount of ordinary distributions paid on an E2open Holdings unit from the Closing Date through (but not including) the date such RCU converts into an E2open Holdings unit. If any of the RCUs do not vest on or before the 10-year anniversary of the Closing Date, such units will be canceled for no consideration, and will not be entitled to receive any Catch-Up Payments.

We have not paid any dividends to date and do not expect to in the future.

Sponsor Side Letter

In connection with the execution of the Business Combination Agreement, the Sponsor, certain investors and CCNB1's Independent Directors entered into the Sponsor Side Letter Agreement with CCNB1. Under the Sponsor Side Letter Agreement, 2,500,000 Class B ordinary shares ~~outstanding~~of CCNB1 held by the Sponsor and CCNB1's Independent Directors automatically converted into 2,500,000 shares of Series B-1 Common Stock, which, collectively, are referred to as the Restricted Sponsor Shares. The vesting conditions of the shares of Series B-1 Common Stock mirror the Series 1 RCUs.

These restricted shares were treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurements was recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value was not part of our core operating activities.

As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis. The fair value remeasurements through June 8, 2021 resulted in a loss of $13.7 million for the nine months ended November 30, 2021.

15. Financial Instruments

We recognize derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value and provide qualitative and quantitative disclosures about such derivatives. We have international operations that expose us to potentially adverse movements in foreign currency exchange rates. To reduce our exposure to foreign currency rate changes on forecasted operating expenses, we enter into hedges in the form of foreign currency forward contracts related to changes in the U.S. dollar/foreign currency relationship. We do not use foreign currency forward contracts for speculative or trading purposes. Our derivative contracts are governed by an International Swaps and Derivatives Association master agreement that generally includes standard netting arrangements.

We are exposed to credit loss in the event of non-performance by counterparties to our derivative contracts. We actively monitor our exposure to credit risk, enter into foreign exchange forward contracts with high credit quality financial institutions and mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. We have not experienced any instances of non-performance by any counterparties.

The assets or liabilities associated with the forward contracts are recorded at fair value in prepaid expenses and other current assets, other noncurrent assets, accounts payable and accrued liabilities or other noncurrent liabilities in the Condensed Consolidated Balance Sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. The cash flow impact upon settlement of the derivate contracts will be included in net cash from operating activities in the Condensed Consolidated Statements of Cash Flows.

Cash Flow Hedging Activities

Our foreign exchange forward contracts are designed and qualify as cash flow hedges. The contracts currently hedge the U.S. dollar/Indian Rupee relationship with the duration of these forward contracts ranging from one-month to 24-months at inception. These contracts cover a portion of our spend in Indian Rupee. We have not hedged our exposure to revenue or expenses in other currencies.

To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes in future cash flows on the hedged transactions. The related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) in stockholders' equity and reclassified into operating expenses when the hedge is settled. As of November 30, 2022, our foreign exchange forward contracts have durations of approximately 21 months or less.

Our exposure to the market gains or losses will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the ~~period. At March 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings~~remaining life of the ~~Company. As a result, diluted~~instruments.

The following table represents the Condensed Consolidated Balance Sheets location and amount of the derivative instrument fair values:


($ in thousands)	November 30, 2022
Accounts payable and accrued liabilities	$	(480	)
Other noncurrent liabilities		(147	)

We estimate the $0.5 million, net of tax, of losses on forward exchange currency derivatives instruments included in other comprehensive loss ~~per share is~~will be settled and reclassified into earnings within the ~~same as basic loss per share for the periods presented.~~next twelve months.

~~Income taxes~~

The Company complies with the accounting and reporting requirements of ASC Topic 740, "Income Taxes," which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxWe report our foreign exchange forward contract assets and liabilities on a net basis in the Condensed Consolidated Balance Sheets when a master-netting arrangement exists between us and the counterparty to the contract. A standard master netting agreement exists between us and the counterparty to the foreign exchange forward contract entered into in August 2022. The agreement allows for multiple transaction payment netting and none of the netting arrangements involve collateral. As of November 30, 2022, all of the foreign exchange forward contracts are ~~computed~~in a liability position.

See Note 22, Other Comprehensive Loss for ~~differences~~additional information regarding our cash flow hedges.

16. Fair Value Measurement

Our financial instruments include cash and cash equivalents; investments; accounts receivable, net; accounts payable; acquisition-related obligations; notes payable; and financing lease obligations. Accounts receivable, net; accounts payable; and acquisition-related obligations are stated at their carrying value, which approximates fair value, due to their short maturity. We measure our cash equivalents and investments at fair value, based on an exchange or exit price which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. We estimate the fair value for notes payable and financing lease obligations by discounting the future cash flows of the related note and lease payments. As of November 30, 2022 and February 28, 2022, the fair value of the cash and cash equivalents, restricted cash, notes payable and financing lease obligations approximates their recorded values.

The following tables set forth details about our investments:


($ in thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
November 30, 2022
Asset-backed securities	$	162	$	30	$	—	$	192

February 28, 2022
Asset-backed securities	$	162	$	46	$	—	$	208

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

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


	November 30, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Asset-backed securities	$	—	$	192	$	—	$	192
Total investments		—		192		—		192
Total assets	$	—	$	192	$	—	$	192

Liabilities:
Forward currency contracts	$	—	$	627	$	—	$	627
Cash-settled restricted stock units		8		—		—		8
Tax receivable agreement liability		—		—		41,179		41,179
Warrant liability		10,902		—		19,473		30,375
Contingent consideration		—		—		27,808		27,808
Total liabilities	$	10,910	$	627	$	88,460	$	99,997


	February 28, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market	$	4	$	—	$	—	$	4
Total cash equivalents		4		—		—		4
Investments:
Asset-backed securities		—		208		—		208
Total investments		—		208		—		208
Total assets	$	4	$	208	$	—	$	212

Liabilities:
Tax receivable agreement liability	$	—	$	—	$	50,268	$	50,268
Warrant liability		27,324		—		39,815		67,139
Contingent consideration		—		—		45,568		45,568
Total liabilities	$	27,324	$	—	$	135,651	$	162,975

Cash-Settled Restricted Stock Units

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

Contingent Consideration

The following table provides a reconciliation of the beginning and ending balances of acquisition related accrued earn-outs and contingent consideration using significant unobservable inputs (Level 3) from March 1, 2022 through November 30, 2022 and March 1, 2021 through February 28, 2022:


($ in thousands)	November 30, 2022			February 28, 2022
Beginning of period	$	45,568		$	152,808
Conversion to Class A Common Stock		—			(175,000	)
Cash payments		—			(2,000	)
(Gain) loss from fair value of contingent consideration		(17,760	)		69,760
End of period	$	27,808		$	45,568

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

Tax Receivable Agreement

Our tax receivable agreement liability is measured under both ASC 805 at fair value on a recurring basis using significant unobservable inputs (Level 3) and ASC 450 at book value. The following table provides a reconciliation of the portion of the tax receivable agreement liability measured at fair value under Level 3 from March 1, 2022 through November 30, 2022 and March 1, 2021 through February 28, 2022:


($ in thousands)	November 30, 2022			February 28, 2022
Beginning of period	$	50,268		$	50,114
Gain (loss) from fair value of tax receivable agreement liability		(9,089	)		154
End of period	$	41,179		$	50,268

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

Warrants

Our warrant liability is measured at fair value on a recurring basis using active market quoted prices (Level 1) and significant unobservable inputs (Level 3). The following table provides a reconciliation of the warrant liability from March 1, 2022 through November 30, 2022 and March 1, 2021 through February 28, 2022:


($ in thousands)	November 30, 2022			February 28, 2022
Beginning of period	$	67,139		$	68,772
Gain from fair value of warrant liability		(36,764	)		(1,633	)
End of period	$	30,375		$	67,139

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

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

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

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

17. Revenue

We primarily generate revenue from the sale of subscriptions and professional services. We recognize revenue when the client contract and associated performance obligations have been identified, transaction price has been determined and allocated to the performance obligations in the contract, and performance obligations have been satisfied. We recognize revenue net of any taxes collected from clients, which are subsequently remitted to governmental authorities. Other revenue is recognized when the service is delivered to the client.

Total Revenue by Geographic Locations

Revenue by geographic regions consisted of the following:


	Three Months Ended November 30,				Nine Months Ended November 30,
($ in thousands)	2022		2021		2022		2021
Americas	$	139,468	$	110,690	$	410,100	$	248,910
Europe		20,120		20,367		59,049		22,989
Asia Pacific		5,305		5,945		16,801		9,509
Total revenue	$	164,893	$	137,002	$	485,950	$	281,408

Revenues by geography are determined based on the region of our contracting entity, which may be different than the region of the client. Americas revenue attributed to the United States was 83% and 81% during the three months ended November 30, 2022 and 2021, respectively. Americas revenue attributed to the United States was 83% and 89% during the nine months ended November 30, 2022 and 2021, respectively. No other country represented more than 10% of total revenue during these periods.

During the three months ended November 30, 2022 and 2021, we recorded a $0.1 million and $10.4 million reduction to revenue to amortize the deferred revenue fair value adjustment that resulted from the purchase price allocation in the Business Combination, respectively. During the nine months ended November 30, 2022 and 2021, we recorded a $0.4 million and $47.1 million reduction to revenue to amortize the deferred revenue fair value adjustment, respectively. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue is no longer required; therefore, an adjustment to deferred revenue was not made for the BluJay or Logistyx acquisitions.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied. It includes unearned revenue and amounts that will ~~result~~be invoiced and recognized as revenue in future ~~taxable~~periods and does not include contracts where the client is not committed. The client is not considered committed when they are able to terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a practical expedient of ASC 606, Revenue from Contracts with Customers we have not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or ~~deductible~~less. As of November 30, 2022 and February 28, 2022, approximately $795.1 million and $767.9 million of revenue was expected to be recognized from remaining performance obligations, respectively. These amounts ~~based on enacted tax laws and rates applicable to the periods in which the differences~~ are expected to ~~affect taxable income. Valuation allowances are established,~~be recognized within the next five years.

Contract Assets and Liabilities

Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but for which amounts have not been billed. Contract assets were $28.5 million and $14.6 million as of November 30, 2022 and February 28, 2022, respectively. Contract liabilities consist of deferred revenue which includes billings in excess of revenue recognized related to subscription contracts and professional services. Deferred revenue is recognized as revenue when ~~necessary,~~we perform under the contract. Deferred revenue was $176.0 million and $192.1 million as of November 30, 2022 and February 28, 2022, respectively. Revenue recognized during the three and nine months ended November 30, 2022, included in deferred revenue on the Condensed Consolidated Balance Sheets as of February 28, 2022, was $29.7 million and $154.7 million, respectively.

As of February 4, 2021, a fair value adjustment of $60.7 million was recorded to reduce our deferred revenue to its fair value as part of the Business Combination. As deferred revenue is recognized, any fair value adjustment related to the deferred revenue is also recognized as a reduction to revenue. As of November 30, 2022 and February 28, 2022, the fair value adjustment to reduce deferred ~~tax~~revenue as part of the Business Combination was $0.1 million and $0.5 million, respectively. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue is no longer required; therefore, an adjustment to deferred revenue was not made for the BluJay and Logistyx acquisitions.

Sales Commissions

With the adoption of ASC 606 and ASC 340-40, Contracts with Customers in March 2019, we began deferring and amortizing sales commissions that are incremental and directly related to obtaining client contracts.

Amortization expense of $1.0 million and $0.5 million was recorded in sales and marketing expense in the Condensed Consolidated Statements of Operations for the three months ended November 30, 2022 and 2021, respectively. Amortization expense of $2.9 million and $0.9 million was recorded in sales and marketing expense for the nine months ended November 30, 2022 and 2021, respectively. Certain sales commissions that would have an amortization period of less than one year are expensed as incurred in sales and marketing expense. As of November 30, 2022 and February 28, 2022, we had a total of $14.3 million and $12.2 million of capitalized sales commissions included in prepaid expenses and other current assets and other noncurrent assets in the Condensed Consolidated Balance Sheets, respectively.

18. Severance and Exit Costs

In connection with acquisitions, we conduct pre and post-acquisition related operational reviews to reallocate resources to strategic areas of the business. The operational reviews resulted in workforce reductions, lease obligations related to properties that were vacated and other expenses. Severance and exit costs included in acquisition-related expenses in the Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended November 30,				Nine Months Ended November 30,
($ in thousands)	2022		2021		2022		2021
Severance	$	534	$	4,545	$	4,224	$	5,199
Lease exits		81		767		316		1,583
Total severance and exit costs	$	615	$	5,312	$	4,540	$	6,782

In addition, during the second quarter of fiscal 2023, we accrued $0.8 million in severance expense related to an executive who left the Company. The expense was recorded in general and administrative expense in the Condensed Consolidated Statements of Operations and in the Condensed Consolidated Balance Sheets in accounts payable and accrued liabilities in the accrued severance and retention liability. The severance payment was paid during the third quarter of fiscal 2023.

Included in accounts payable and accrued liabilities as of November 30, 2022 and February 28, 2022 was a restructuring liability balance, primarily consisting of lease related obligations, of $0.2 million and $0.8 million, respectively, and a restructuring severance liability of $2.5 million and $1.9 million, respectively. We expect these amounts to be substantially paid within the next 12 months.

The following table reflects the changes in the severance and exit cost accruals from March 1, 2022 through November 30, 2022 and March 1, 2021 through February 28, 2022:


($ in thousands)	November 30, 2022			February 28, 2022
Beginning of period	$	2,687		$	1,988
Payments		(5,125	)		(7,302	)
Impairment of right-of-use assets		(421	)		(580	)
Expenses		5,625			8,581
End of period	$	2,766		$	2,687

In the 2022 Form 10-K, $0.8 million of accrued expenses related to accrued severance and retention were reflected in accrued compensation. This amount has been reclassified to accrued severance and retention to correspond to the ~~amount expected~~current year presentation.

19. Warrants

As of November 30, 2022 and February 28, 2022, there were an aggregate of 29,079,872 warrants outstanding, which include the public warrants, private placement warrants and Forward Purchase Warrants. Each warrant entitles its holders to ~~be realized.~~

~~ASC Topic 740 prescribes~~purchase one share of Class A Common Stock at an exercise price of $11.50 per share. The private placement warrants became exercisable with the Domestication. The Forward Purchase Warrants became exercisable upon the effectiveness of our Form S-1 in March 2021. The public warrants became exercisable in April 2021. The public warrants, private placement warrants and Forward Purchase Warrants expire five years after the Closing Date, or earlier upon redemption or liquidation. Once the warrants became exercisable, we have the option to redeem the outstanding warrants when various conditions are met, such as specific stock prices, as detailed in the specific warrant agreements. However, the 10,280,000 private placement warrants are nonredeemable so long as they are held by our Sponsor or its permitted transferees. The warrants are recorded as a ~~recognition threshold~~liability in warrant liability on the Condensed Consolidated Balance Sheets with a balance of $30.4 million and $67.1 million as of November 30, 2022 and February 28, 2022, respectively. During the three months ended November 30, 2022 and 2021, a gain of $16.2 million and a ~~measurement attribute~~loss of $7.2 million was recognized in gain (loss) from change in fair value of the warrant liability in the Condensed Consolidated Statements of Operations, respectively. During the nine months ended November 30, 2022 and 2021, a gain of $36.8 million and loss of $48.4 million was recognized in gain (loss) from change in fair value of the warrant liability, respectively.

20. Stockholders' Equity

Class A Common Stock

We are authorized to issue 2,500,000,000 Class A common stock with a par value of $0.0001 per share. Holders of our Class A Common Stock are entitled to one vote for each share. As of November 30, 2022 and February 28, 2022, there were 302,452,552 and 301,536,621 shares of Class A Common Stock issued, respectively, and 302,275,898 and 301,359,967 shares of Class A Common Stock outstanding, respectively.

Class V Common Stock

We were authorized to issue 40,000,000 Class V common stock with a par value of $0.0001 per share. In August 2021, the number of shares authorized for issuance increased to 42,747,890 Class V common stock with a par value of $0.0001. These shares have no economic value but entitle the holder to one vote per share. As of November 30, 2022 and February 28, 2022, there were 33,092,007 and 33,560,839 shares of Class V Common Stock issued and outstanding, respectively, and 9,655,883 and 9,187,051 shares of Class V Common Stock held in treasury, respectively.

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

The following table reflects the changes in our outstanding stock:


	Class A		Class V			Series B-1		Series B-2
Balance, February 28, 2022		301,359,967		33,560,839			94		3,372,184
Conversion of Common Units (1)		249,941		(468,832	)		—		—
Vesting of restricted awards, net of shares withheld for taxes (2)		665,990		—			—		—
Balance, November 30, 2022		302,275,898		33,092,007			94		3,372,184

(1)

Class A Common Stock issued for the ~~financial statement recognition~~conversion of Common Units settled in stock. During the nine months ended November 30, 2022, we paid $1.4 million in cash for the repurchase of 218,891 Common Units that were converted into cash instead of stock at our option. Class V Common Stock are retired on a one-for-one basis when Common Units are converted into Class A Common Stock or settled in cash.

(2)

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

Share Repurchase Program

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

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

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

21. Noncontrolling Interests

Noncontrolling interest represents the portion of E2open Holdings that we control and consolidate but do not own. As of November 30, 2022 and February 28, 2022, the noncontrolling interests represent a 9.9% and 10.0% ownership in E2open Holdings, respectively. As part of the Business Combination, E2open Parent Holdings, Inc. became the owner of E2open Holdings along with the existing owners of E2open Holdings through Common Unit ownership. The existing owners of E2open Holdings are shown as noncontrolling interests on the Condensed Consolidated Balance Sheets and their portion of the net income (loss) of E2open Holdings is shown as net income (loss) attributable to noncontrolling interest on the Condensed Consolidated Statements of Operations.

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

During the three months ended November 30, 2022, 100,000 Common Units were converted into Class A Common Stock with a value of $0.6 million based off the 5-day VWAP. During the nine months ended November 30, 2022, 249,941 Common Units were converted into Class A Common Stock with a value of $1.8 million based off the 5-day VWAP. A total of 218,891 Common Units were settled in cash of $1.4 million during the nine months ended November 30, 2022. This activity resulted in a decrease to noncontrolling interests of $0.6 million and $3.2 million during the three and nine months ended November 30, 2022, respectively.

As of November 30, 2022 and February 28, 2022, there were a total of 33.1 million and 33.6 million Common Units held by participants of E2open Holdings, respectively.

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

22. Other Comprehensive Loss

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


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

Other comprehensive loss		(68,360	)		(627	)		(68,987	)
Tax effects		10,274			—			10,274
Other comprehensive loss		(58,086	)		(627	)		(58,713	)
Balance, November 30, 2022	$	(77,105	)	$	(627	)	$	(77,732	)

The effect of amounts reclassified out of unrealized holding losses on derivatives into net income (loss) was as follows:


($ in thousands)	Three Months Ended November 30, 2022		Nine Months Ended November 30, 2022
Reclassifications:
Losses on cash flows hedges, net of tax
Cost of revenue	$	105	$	105
Research and development		94		94
Sales and marketing		3		3
General and administrative		48		48
Total	$	250	$	250

We did not reclass any items to the Condensed Consolidated Statements of Operations from accumulated other comprehensive loss during the three and nine months ended November 30, 2021.

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

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

23. Earnings Per Share

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


	Three Months Ended November 30,					Nine Months Ended November 30,
(in thousands, except per share data)	2022		2021			2022			2021
Net loss per share:
Numerator - basic:
Net income (loss) per share:	$	5,503	$	(64,289	)	$	(416,703	)	$	(257,632	)
Less: Net income (loss) attributable to noncontrolling interests		698		(5,072	)		(41,464	)		(35,640	)
Net income (loss) attributable to E2open Parent Holdings, Inc. - basic	$	4,805	$	(59,217	)	$	(375,239	)	$	(221,992	)

Numerator - diluted:
Net income (loss) attributable to E2open Parent Holdings, Inc. - basic	$	4,805	$	(59,217	)	$	(375,239	)	$	(221,992	)
Add: Net income (loss) and tax effect attributable to noncontrolling interests		—		—			—			—
Net income (loss) attributable to E2open Parent Holdings, Inc. - diluted	$	4,805	$	(59,217	)	$	(375,239	)	$	(221,992	)

Denominator - basic:
Weighted average shares outstanding - basic		302,201		308,132			301,822			227,186
Net income (loss) per share - basic	$	0.02	$	(0.19	)	$	(1.24	)	$	(0.98	)

Denominator - diluted:
Weighted average shares outstanding - basic		302,201		308,132			301,822			227,186
Weighted average effect of dilutive securities:
Time based restricted stock		158		—			—			—
Weighted average shares outstanding - diluted		302,359		308,132			301,822			227,186
Diluted net income (loss) per common share	$	0.02	$	(0.19	)	$	(1.24	)	$	(0.98	)

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

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


	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Shares related to Series B-1 common stock		94		94		94		60
Shares related to Series B-2 common stock		3,372,184		3,372,184		3,372,184		3,372,184
Shares related to restricted common units Series 2		2,627,724		2,627,724		2,627,724		2,627,724
Shares related to warrants (1)		29,079,872		29,079,959		29,079,872		29,079,968
Shares related to Common Units		33,126,073		34,885,501		33,350,756		36,404,078
Shares related to options		4,832,802		2,573,978		3,986,158		2,533,856
Share related to performance based restricted stock		2,101,221		937,381		2,059,595		688,494
Shares related to time based restricted stock		2,303,641		1,306,358		2,404,272		825,362
Units/Shares excluded from the dilution computation		77,443,611		74,783,179		76,880,655		75,531,726

(1)

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

24. Share-Based Compensation

2021 Incentive Plan

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

Our board of directors have approved the grant of options and RSUs under the 2021 Incentive Plan.

The fiscal year 2022 options were performance based and measured based on obtaining an organic growth target over a one-year period with a quarter of the options vesting at the end of the performance period and the remaining options vesting equally over the following three years. The fiscal year 2023 options are performance based and measured based on obtaining organic growth, adjusted EBITDA and net booking targets over a one-year period with a quarter of the options vesting at the end of the performance period and the remaining options vesting equally over the following three years. Our executive officers and senior management are granted these performance based options. The performance target is set at 100% at the grant date, and the probability of meeting the performance target is remeasured each quarter over the performance period and adjusted if needed. The performance target for the options granted during May 2021 was finalized in April 2022 above 100% and adjusted accordingly. As of November 30, 2022, there were 4,259,741 unvested performance based options.

The RSUs are either performance based or time based. The fiscal year 2022 performance based RSUs were measured based on obtaining an organic growth target over a one-year period with a quarter of the RSUs vesting at the end of the performance period and the remaining RSUs vesting equally over the following three years. The fiscal year 2023 performance based RSUs are measured based on obtaining an organic growth, adjusted EBITDA and net bookings target over a one-year period with a quarter of the RSUs vesting at the end of the performance period and the remaining RSUs vesting equally over the following three years. The performance target is set at 100% at the date of grant, and the probability of meeting the performance target is remeasured each quarter over the performance period and adjusted if needed. The performance target for the performance based RSUs granted during May 2021 was finalized in April 2022 above 100% and adjusted accordingly. The time based RSUs for executive officers, senior management and employees vest ratably over a three-year period while the time based RSUs for non-employee directors of our board of directors have a one-year vesting period. As of November 30, 2022, there were 2,051,628 performance based RSUs and 4,566,069 time based RSUs that were vested or expected to vest with a total intrinsic value of $39.0 million.

During fiscal 2023 our board of directors approved a company-wide share-based compensation program under our 2021 Incentive Plan. Under the program, approximately 3,800 employees are eligible to receive an annual stock award subject to approval by the board of directors as part of their annual compensation package. As part of the fiscal 2023 annual compensation package, our board of directors approved a grant on October 1, 2022 of 1,653,982 time based RSUs to the employees who had not previously received a fiscal year 2023 equity grant. For those employees based in China, 25,045 cash-settled RSUs were granted. The time based and cash-settled RSUs will vest ratably over a three-year period.

The cash-settled RSUs must be settled in cash and are accounted for as liability-type awards. The fair value of these cash-settled RSUs equals the value of our Class A Common Stock on the date of grant and is remeasured at the end of each reporting period at fair value. The change in fair value will be recorded in share-based compensation expense in the Condensed Consolidated Statements of Operations. The liability for the cash-settled RSUs was negligible as of November 30, 2022 and is included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. As of November 30, 2022, there were 25,045 unvested cash-settled RSUs with a total intrinsic value of $0.1 million.

As of November 30, 2022, there were 8,444,185 shares of Class A Common Stock available for grant under the 2021 Incentive Plan.

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

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


	Number of Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Balance, February 28, 2022		2,524		$	9.83		9.0
Granted		3,275			7.76
Forfeited/Expired		(966	)		9.85
Balance, November 30, 2022		4,833		$	8.42		8.7

Vested and exercisable as of November 30, 2022		573		$	9.82		5.2


	Number of Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Balance, February 28, 2021		—		$	—		—
Granted		2,583			9.86
Forfeited		(26	)		10.86
Balance, November 30, 2021		2,557		$	9.86		9.5

As of November 30, 2022, there was $7.2 million of unrecognized compensation cost related to unvested options. The aggregate intrinsic value of outstanding stock option awards and the vested and exercisable stock option awards was zero as of November 30, 2022 since our Class A Common Stock price was less than the exercise price of the stock option awards.

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


	Number of Units (in thousands)			Weighted Average Grant Date Fair Value Per Unit		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2022		2,103		$	12.47		2.7
Granted		5,645			7.45
Added by performance factor		300			12.87
Released		(870	)		12.12
Canceled and forfeited		(560	)		10.00
Balance, November 30, 2022		6,618		$	8.46		2.6


	Number of Units (in thousands)			Weighted Average Grant Date Fair Value Per Unit		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2021		—		$	—		—
Granted		2,408			12.70
Forfeited		(155	)		12.87
Balance, November 30, 2021		2,253		$	12.69		2.9

As of November 30, 2022, there was $42.0 million of unrecognized compensation cost related to unvested RSUs. The aggregate intrinsic value of the RSUs was $39.0 million as of November 30, 2022 which is the outstanding RSUs valued at the closing price of our Class A Common Stock on November 30, 2022.

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


	Number of Units (in thousands)		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2022		—	$	—		—
Granted		25		6.07
Balance, November 30, 2022		25	$	6.07		2.8

As of November 30, 2022, there was $0.1 million of unrecognized compensation cost related to unvested cash-settled RSUs. The aggregate intrinsic value of the cash-settled RSUs was $0.1 million as of November 30, 2022 which is the outstanding cash-settled RSUs valued at the closing price of our Class A Common Stock on November 30, 2022.

The estimated grant-date fair values of the options granted during the nine months ended November 30, 2022 were calculated using the Black-Scholes option-pricing valuation model, based on the following assumptions:


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

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


	Three Months Ended November 30,				Nine Months Ended November 30,
($ in thousands)	2022		2021		2022		2021
Cost of revenue	$	545	$	399	$	856	$	856
Research and development		938		648		2,181		1,345
Sales and marketing		901		727		2,560		1,487
General and administrative		2,413		2,208		7,542		4,846
Total share-based compensation	$	4,797	$	3,982	$	13,139	$	8,534

25. Leases

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

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

Real Estate Leases

We lease our primary office space under non-cancelable operating leases with various expiration dates through June 2030. Many of our leases have an option to be extended from two to five years, and several of the leases give us the right to cancel early with proper notification. Additionally, we have two subleases of our office leases as of November 30, 2022.

Several of the operating lease agreements require us to provide security deposits. As of November 30, 2022, and February 28, 2022, lease deposits were $5.0 million and $3.6 million, respectively. The deposits are generally refundable at the expiration of the lease, assuming all obligations under the lease agreement have been met. Deposits are included in prepaid and other current assets and other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three and nine months ended November 2022, we incurred a $1.8 million and $4.1 million impairment, respectively, on our operating lease ROU assets and leasehold improvements due to vacating three and seven locations, respectively, with the intent to sublease them. The impairments were recorded in general and administrative expense in the Condensed Consolidated Statements of Operations.

Vehicle Leases

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

Equipment Leases

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

Balance Sheet Presentation

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


($ in thousands)	Balance Sheet Location	November 30, 2022		February 28, 2022
Operating lease right-of-use assets	Operating lease right-of-use assets	$	21,022	$	28,102
Finance lease right-of-use asset	Property and equipment, net		2,254		3,719
Total right-of-use assets		$	23,276	$	31,821


($ in thousands)	Balance Sheet Location	November 30, 2022		February 28, 2022
Operating lease liability - current	Current portion of operating lease obligations	$	8,093	$	7,652
Operating lease liability	Operating lease obligations		17,462		21,202
Finance lease liability - current	Current portion of finance lease obligations		2,002		2,307
Finance lease liability	Finance lease obligations		—		1,950
Total lease liabilities		$	27,557	$	33,111

Lease Cost and Cash Flows

The following table summarizes our total lease cost:


	Three Months Ended November 30,						Nine Months Ended November 30,
($ in thousands)	2022			2021			2022			2021
Finance lease cost:
Amortization of right-of-use asset	$	508		$	717		$	1,686		$	2,308
Interest on lease liability		35			79			161			496
Finance lease cost		543			796			1,847			2,804
Operating lease cost:
Operating lease cost		2,239			1,008			5,505			3,500
Variable lease cost		510			2,022			3,810			4,001
Sublease income		(46	)		(189	)		(482	)		(722	)
Operating net lease cost		2,703			2,841			8,833			6,779
Total net lease cost	$	3,246		$	3,637		$	10,680		$	9,583

Short-term lease expense was immaterial for the three and nine months ended November 30, 2022. There was no short-term lease expense for the three and nine months ended November 30, 2021.

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended November 30,
($ in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	7,365	$	5,272

The following table presents the weighted-average remaining lease terms and discount rates of our leases:


	Nine Months Ended November 30,
	2022			2021
Weighted-average remaining lease term (in years):
Finance lease		0.69			1.58
Operating lease		3.77			4.29
Weighted-average discount rate:
Finance lease		9.20	%		9.20	%
Operating lease		5.43	%		4.40	%

Lease Liability Maturity Analysis

The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities as of November 30, 2022:


($ in thousands)	Operating Leases			Finance Leases
December 2022 - February 2023	$	2,561		$	74
2024		8,897			2,014
2025		6,951			—
2026		4,370			—
2027		3,026			—
Thereafter		2,475			—
Total		28,280			2,088
Less: Present value discount		(2,725	)		(86	)
Lease liabilities	$	25,555		$	2,002

26. Income Taxes

We calculate the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to "ordinary" income or loss (pretax income or loss excluding discrete items) for the reporting period. Our provision for income taxes was a benefit of $7.9 million, or 331.8%, for the three months ended November 30, 2022 compared to a benefit of $10.8 million, or 14.3%, for the three months ended November 30, 2021. Our provision for income taxes for the nine months ended November 30, 2022 was a benefit of $130.0 million, or 23.8%, compared to a benefit of $3.4 million, or 1.3%, for the nine months ended November 30, 2021.

The loss before income taxes of $2.4 million and $546.7 million for the three and nine months ended November 30, 2022, respectfully, resulted in a $7.9 million and $130.0 million income tax benefit, respectively. These benefits primarily resulted from the goodwill impairment taken in athe second fiscal quarter of 2023. Additionally, the increase in the tax ~~return. For those~~benefit was due to changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment and changes in the mark-to-market gains and losses on certain contingent liabilities offset by changes in book losses in certain jurisdictions for which no benefit can be recognized.

As of November 30, 2022 and February 28, 2022, total gross unrecognized tax benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company's management determined that the Cayman Islands is the Company's only major tax jurisdiction. The Company recognizes accruedwere $2.6 million. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. ~~There were no unrecognized tax benefits~~As of November 30, 2022 and no amounts accrued for interest and penalties as of March 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company's financial statements. The Company's management does not expect thatFebruary 28, 2022, the total amount of ~~unrecognized~~gross interest and penalties accrued was less than $0.1 million which is classified as other noncurrent liabilities in the Condensed Consolidated Balance Sheets.

Inflation Reduction Act of 2022

On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax ~~benefits~~on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. The alternative minimum tax is effective for taxable years beginning after December 31, 2022 and the excise tax applies to stock repurchases after December 31, 2022. The alternative minimum tax would not be applicable in our next fiscal year as it is based on a three-year average annual adjusted financial statement income in excess of $1 billion. We will ~~materially change over~~evaluate any impact related to the ~~next twelve months.~~excise tax on net stock repurchases based on our relative activity.

27. Commitments and Contingencies

~~Recent Accounting Pronouncements~~

~~Management does~~From time to time, we are subject to contingencies that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not currently believe ~~that~~the resolution of any ~~recently issued, but not yet effective, accounting pronouncements, if currently adopted, would~~such contingencies will have a material adverse effect ~~on the Company's financial statements.~~upon our Condensed Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.

28. Supplemental Cash Flow Information

Supplemental cash flow information and non-cash investing and financing activities are as follows:


	Nine Months Ended November 30,
(In thousands)	2022		2021
Supplemental cash flow information - Cash paid for:
Interest	$	29,325	$	18,461
Income taxes		7,669		2,890
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities		263		2,376
Right-of-use assets obtained in exchange for operating lease obligations		2,559		25,825
Shares withheld for taxes on vesting of restricted stock		1,593		—
Conversion of Common Units to Class A Common Stock		1,809		41,727
Conversion of Series B1 common stock to Class A Common Stock		—		175,000
Business Combination purchase price adjustment		—		2,965
Issuance of common stock for BluJay Acquisition		—		730,854
Deferred taxes related to issuance of common stock for BluJay Acquisition		—		36,805

~~NOTE 3. INITIAL PUBLIC OFFERING~~

29. Subsequent Events

~~On April 28, 2020, the Company sold~~ ~~41,400,000~~ ~~Units, including~~ ~~5,400,000~~ Over-Allotment Units, at $10.00 per Unit, generating gross proceeds of $414.00 million, and incurring offering costs of approximately $24.53 million, inclusive of $14.49 million in deferred underwriting commissions and approximately $0.9 million in deferred legal fees.

Each Unit will consist of one Class A ordinary share and one-third of one redeemable warrant ("Public Warrant"). Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 7).

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~NOTE 4. PRIVATE PLACEMENT~~

~~Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of~~ ~~10,280,000~~ ~~Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of approximately $10.28 million.~~

Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. Certain proceeds of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.

~~NOTE 5. RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

On January ~~16, 2020,~~9, 2023, we repaid the ~~Company issued 2,875,000 Class B ordinary shares to the Sponsor (the "Founder Shares") in exchange for a payment of $25,000 for offering costs made by the Sponsor~~outstanding $10.0 million balance on behalf of the Company. On March 6, 2020, the Company effected a share capitalization resulting in the Sponsor holding an aggregate of 13,625,000 founder shares. On March 6, 2020, the Sponsor transferred 50,000 Founder Shares to each of Keith W. Abell and Eva F. Huston, the Company's independent director nominees. On April 23, 2020, the Company effected a share capitalization resulting in an aggregate of 15,350,000 Founder Shares issued and outstanding. The Sponsor currently owns an aggregate of 15,250,000 Class B ordinary shares and the independent directors, collectively, currently own an aggregate of 100,000 Class B ordinary shares. All shares and the associated amounts have been retroactively restated to reflect the aforementioned share capitalization. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 1,350,000 Founder Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the option to purchase additional units is not exercised in full by the underwriters so that the Founder Shares will represent 20% of the Company's issued and outstanding shares after the Initial Public Offering plus the number of Class A ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). If the Company increases or decreases the size of the Initial Public Offering, the Company will effect a share capitalization or a share repurchase or redemption or other appropriate mechanism, as applicable, with respect to the Class B ordinary shares prior to the consummation of the Initial Public Offering in such amount as to maintain the number of Founder Shares at 20% of the Company's issued and outstanding ordinary shares upon the consummation of the Initial Public Offering plus the number of Class A ordinary shares to be sold pursuant to the Forward Purchase Agreement. ~~On April 24, 2020, the underwriters exercised their over-allotment option; thus, the Founder Shares were no longer subject to forfeiture.~~

The Initial Shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Initial Shareholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lock-up.

~~Related Party Loans~~

On~~January 16, 2020~~, the Sponsor agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the "Note"). The Note is non-interest bearing, unsecured and due upon the closing of the Initial Public Offering. As of March 31, 2020, the Company borrowed approximately $54,000our 2021 Revolving Credit Facility. After this repayment, our available borrowing capacity under the ~~Note. Subsequent to March 31, 2020, the Company borrowed additional amount from the Sponsor, for~~2021 Revolving Credit Facility is $155.0 million.

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

This item contains a ~~total outstanding amount~~discussion of ~~approximately $125,000 under the Note. On May 29, 2020, the Company repaid the Note to the Sponsor in full.~~

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~In addition, in order to finance transaction costs in connection with~~our business, including a ~~Business Combination, the Sponsor or an affiliate~~general overview of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to, loan the Company funds as may be required ("Working Capital Loans"). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up to $2.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. To date, the Company has no borrowings under the Working Capital Loans.

~~Forward Purchase Agreement~~

In connection with the consummation of the Initial Public Offering, the Company entered into a forward purchase agreement (the "Forward Purchase Agreement") with Neuberger Berman Opportunistic Capital Solutions Master Fund LP ("NBOKS"), a member of the Sponsor, which provides for the purchase of up to $200,000,000 of units, with each unit consisting of one Class A ordinary share (the "Forward Purchase Shares") and one-fourth of one warrant to purchase one Class A ordinary share at $11.50 per share (the "Forward Purchase Warrants"), for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of the initial Business Combination. The Forward Purchase Agreement allows NBOKS to be excused from its purchase obligation in connection with a specificour business, combination if NBOKS does not have sufficient committed capital allocated to the Forward Purchase Agreement to fulfill its funding obligations under such Forward Purchase Agreement in respect of such business combination. Prior to an initial Business Combination, NBOKS intends to raise additional committed capital such that the condition described in the preceding sentence is met, but there can be no assurance that additional capital will be available. The obligations under the Forward Purchase Agreement do not depend on whether any Class A ordinary shares are redeemed by the public shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with the closing of the initial Business Combination. The proceeds from the sale of Forward Purchase Shares may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction company.

~~NOTE 6. COMMITMENTS & CONTINGENCIES~~

~~Registration and Shareholder Rights~~

The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Pursuant to the Forward Purchase Agreement, the Company has agreed to use its reasonable best efforts (i) to file within 30 days after the closing of a Business Combination a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later than sixty (60) days after the initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which NBOKS or its assignees cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (iv) after such registration statement is declared effective, cause us to conduct firm commitment underwritten offerings, subject to certain limitations. In addition, the Forward Purchase Agreement provides that these holders will have certain "piggy-back" registration rights to include their securities in other registration statements filed by the Company.

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Underwriting Agreement~~

The Company granted the underwriters a 45-day option from the date of the final prospectus to purchase up to 5,400,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. ~~On April 24, 2020, the underwriters fully exercised their over-allotment option.~~

~~Deferred Legal Fees~~

The Company obtained legal advisory services from two legal counsel firms in connection with the Initial Public Offering and agreed to pay their fees upon the consummation of the initial Business Combination. As of March 31, 2020, the Company recorded approximately $758,000 in deferred legal fees in connection with such agreements in the accompanying balance sheet.

~~Risks and Uncertainties~~

~~Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect onthe Company’sfinancial position,~~ results of~~its~~operations, ~~and/or search for a target company, the specific impact is not readily determinable~~liquidity and capital resources as ~~of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~well as quantitative and qualitative disclosures about market risk.

~~NOTE 7. SHAREHOLDERS’ EQUITY~~

~~Class A Ordinary Shares~~—The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company's Class A ordinary shares are entitled to one vote for each share.~~At March 31, 2020, there were no Class A ordinary shares issued or outstanding.~~

~~Class B Ordinary Shares~~—The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. On January 16, 2020, 2,875,000 Class B ordinary shares were issued and outstanding. On March 6, 2020, the Company effected a share capitalization resulting in an aggregate of 13,625,000 Class B ordinary shares issued and outstanding. On April 23, 2020, the Company effected a share capitalization resulting in an aggregate of 15,350,000 of Class B ordinary shares issued and outstanding. All shares and the associated amounts have been retroactively restated to reflect the aforementioned share capitalization in the accompanying financial statements.

Holders of the Company's Class B ordinary shares are entitled to one vote for each share. The Class B ordinary shares and will automatically convert into Class A ordinary shares on the first business day following the consummation of the initial Business Combination, or earlier at the option of the holder thereof, on a one-for-one basis. However, if additional Class A ordinary shares or any other equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20% of the sum of (i) the total number of ordinary shares outstanding upon completion of the Initial Public Offering plus (ii) the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor upon conversion of Working Capital Loans, provided that such conversion of Class B ordinary shares will never occur on a less than one-for-one basis. Any conversion of Class B ordinary shares described herein will take effect as a redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law.

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Preference Shares~~~~—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share. As ofMarch 31, 2020, there were no preference shares issued or outstanding.~~

~~Warrants~~—Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a cashless basis under certain circumstances). The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC and have an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a "covered security" under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a "cashless basis" and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers' permitted transferees. If the Private Placement Warrants are held by someone other than the Initial Shareholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

~~The Company may call the Public Warrants and the Forward Purchase Warrants for redemption:~~

	·	~~in whole and not in part;~~
	·	~~at a price of $0.01 per warrant;~~
	·	~~upon a minimum of 30 days' prior written notice of redemption; and~~
	·	if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the Public Warrants for redemption as described above, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a "cashless basis," as described in the warrant agreement.

~~CC NEUBERGER PRINCIPAL HOLDINGS I~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Commencing 90 days after the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants and Forward Purchase Warrants:~~

	·	~~in whole and not in part;~~
	·	at $0.10 per warrant upon a minimum of 30 days' prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the agreed table, based on the redemption date and the "fair market value" of the Class A ordinary shares;
	·	~~upon a minimum of 30 days' prior written notice of redemption; and~~
	·	if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

The "fair market value" of the Class A ordinary shares shall mean the average last reported sale price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

The exercise price and number of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A ordinary shares at a price below its exercise price. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company's assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

~~NOTE 8. SUBSEQUENT EVENTS~~

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date financial statements were available to be issued. Based upon this review, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the financial statements which have not previously been disclosed within the financial statements.

~~Item 2.~~

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

~~References to the “Company,” “CC Neuberger Principal Holdings I,” “our,” “us” or “we” refer to CC Neuberger Principal Holdings I.~~ The following discussion ~~and analysis of the Company’s financial condition and results of operations~~ should be read in conjunction with Part II, Item 7., Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2022 Form 10-K and the unaudited condensed financial statements and ~~the~~related notes ~~thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking~~beginning on page 5. This Item 2 contains "forward looking" statements that involve risks and uncertainties.

~~Cautionary Note Regarding~~ See Forward-Looking Statements at the beginning of this Quarterly Report.

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other U.S. Securities and Exchange Commission (“SEC”) filings.Overview

~~Overview~~

We are a ~~blank check company incorporated on January 14, 2020 (inception) as~~leading provider of cloud-based, end-to-end SCM software. Our platform spans many key strategic and operational areas including omni-channel, demand sensing, supply planning, global trade management, transportation and logistics and manufacturing and supply management. Our software combines networks, data and applications to provide a ~~Cayman Islands exempted company for~~deeply embedded, mission-critical platform that allows clients to optimize their channel and supply chains by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the ~~purpose~~mission-critical nature of ~~effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination~~our solutions, we maintain long-term relationships with ~~one or more businesses that~~our clients, which is reflected by our high gross retention and long client tenure. In aggregate, we ~~have not yet identified ("Business Combination"). Although we are not limited to a particular industry or geographic region for purposes of consummating a Business Combination, we intend to focus~~serve clients in all major countries in the ~~financial,~~world across a wide range of end-markets, including consumer goods, food and beverage, manufacturing, retail, technology and ~~business services sectors.Our sponsor is~~ ~~CC Neuberger Principal Holdings I Sponsor LLC, a Delaware limited liability company (the "Sponsor").~~ transportation, among others.

Recent Events

~~The registration statement for our Initial Public Offering was declared effective on April 23, 2020. On April 28, 2020, we consummated its Initial Public Offering of~~ ~~41,400,000~~ ~~units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including~~ ~~5,400,000~~ additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $414.00 million, and incurring offering costs of approximately $24.53 million, inclusive of $14.49 million in deferred underwriting commissions and approximately $0.9 million in deferred legal fees.

~~Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of~~ ~~10,280,000~~ warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of approximately $10.28 million.

Upon the closing of the Initial Public Offering and the Private Placement, $414.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust Account”) and invested in United States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below. Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the ~~private placement, although substantially all of the net proceeds are intended to be applied toward identifying and consummating an initial~~ ~~Business Combination~~.

If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or April 28, 2022 (the "Combination Period"), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes paid or payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of the initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than 10 business days thereafter, subject to applicable Cayman Islands law.

~~Results of Operations~~

Our entire activity from January 14, 2020 (inception) through March 31, 2020, was in preparation for an Initial Public Offering, and since our Initial Public Offering, our activity has been limited to the search for a prospective initial ~~business combination. We will not generate any operating revenues until the closing and completion of our initial~~ ~~business combination~~.

~~For the period from January 14, 2020 (inception) through March 31, 2020, we had loss of approximately $23,000, which consisted solely of general and administrative expenses.~~

~~Liquidity~~

~~As of March 31, 2020, we had no cash and working capital deficit of approximately $567,000.~~

Our liquidity needs up to March 31, 2020 were satisfied through a payment of $25,000 for offering costs made by our Sponsor on behalf of our company in exchange for the issuance of the Founder Shares to our Sponsor, and the advancement of funds by our Sponsor of approximately $54,000 to us to cover for offering costs in connection with the Initial Public Offering. Subsequent to March 31, 2020, our liquidity has been satisfied through additional loans from our Sponsor, for a total outstanding amount of approximately $125,000 under the Note, and the proceeds from the consummation of the Private Placement not held in the Trust Account of approximately $2.0 million. On May 29, 2020, we repaid the Note to the Sponsor in full. In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. To date, there were no amounts outstanding under any Working Capital Loan.

Based on the foregoing, management determined that we have sufficient liquidity to meet its anticipated obligations until the earlier of the consummation of the initial Business Combination or liquidation.

~~Related Party Transactions~~

~~Founder Shares~~

On January 16, 2020, we issued 2,875,000 Class B ordinary shares to our Sponsor (the "Founder Shares") in exchange for a payment of $25,000 for offering costs made by our Sponsor on behalf of our company. On March 6, 2020, we effected a share capitalization resulting in our Sponsor holding an aggregate of 13,625,000 founder shares. On March 6, 2020, our Sponsor transferred 50,000 Founder Shares to each of Keith W. Abell and Eva F. Huston, our independent director nominees. On April 23, 2020, we effected a share capitalization resulting in an aggregate of 15,350,000 Founder Shares issued and outstanding. Our Sponsor currently owns an aggregate of 15,250,000 Class B ordinary shares and the independent directors, collectively, currently own an aggregate of 100,000 Class B ordinary shares. All shares and the associated amounts have been retroactively restated to reflect the aforementioned share capitalization. The holders of the Founder Shares have agreed to forfeit up to an aggregate of 1,350,000 Founder Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the option to purchase additional units is not exercised in full by the underwriters so that the Founder Shares will represent 20% of our issued and outstanding shares after the Initial Public Offering plus the number of Class A ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). If we increase or decrease the size of the Initial Public Offering, we will effect a share capitalization or a share repurchase or redemption or other appropriate mechanism, as applicable, with respect to the Class B ordinary shares prior to the consummation of the Initial Public Offering in such amount as to maintain the number of Founder Shares at 20% of our issued and outstanding ordinary shares upon the consummation of the Initial Public Offering plus the number of Class A ordinary shares to be sold pursuant to the Forward Purchase Agreement. ~~On April 24, 2020, the underwriters exercised their over-allotment option; thus, the Founder Shares were no longer subject to forfeiture.~~

The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lock-up.

~~Related Party Loans~~

On~~January 16, 2020~~, our Sponsor agreed to loan us up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the "Note"). The Note is non-interest bearing, unsecured and due upon the closing of the Initial Public Offering. To date, there is approximately $125,000 outstanding under the Note.

In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required ("Working Capital Loans"). If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up to $2.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. To date, we had no borrowings under the Working Capital Loans.

~~Forward Purchase Agreement~~

In connection with the consummation of the Initial Public Offering, we entered into a forward purchase agreement (the "Forward Purchase Agreement") with Neuberger Berman Opportunistic Capital Solutions Master Fund LP ("NBOKS"), a member of the Sponsor, which provides for the purchase of up to $200,000,000 of units, with each unit consisting of one Class A ordinary share (the "Forward Purchase Shares") and one-fourth of one warrant to purchase one Class A ordinary share at $11.50 per share (the "Forward Purchase Warrants"),2, 2022, E2open, LLC acquired Logistyx for a purchase price of ~~$10.00 per unit,~~$185 million, with an estimated fair value of $183.4 million, including $90 million paid in cash at closing. An additional $95 million was paid in two installments on May 31, 2022 and September 1, 2022. We had the option to finance the remaining payments, at our discretion, through cash or a ~~private placement to occur concurrently with the closing~~combination of the initial Business Combination. The Forward Purchase Agreement allows NBOKS to be excused from its purchase obligation in connection with a specific business combination if NBOKS does not have sufficient committed capital allocated to the Forward Purchase Agreement to fulfill its funding obligations under such Forward Purchase Agreement in respect of such business combination. Prior to an initial Business Combination, NBOKS intends to raise additional committed capital such that the condition described in the preceding sentence is met, but there can be no assurance that additional capital will be available. The obligations under the Forward Purchase Agreement do not depend on whether anycash and Class A ~~ordinary shares are redeemed by~~Common Stock. The May 31, 2022 payment of $37.4 million was paid in cash. On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx as the ~~public shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with~~final installment payment for the closing of the initial Business Combination. The proceeds from the sale of Forward Purchase Shares may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or forLogistyx Acquisition which reflected a working capital ~~in the post-transaction company.~~

~~Other Contractual Obligations~~

~~Registration and Shareholder Rights~~

~~The holders~~adjustment of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. We will bear the expenses incurred in connection with the filing of any such registration statements.

Pursuant to the Forward Purchase Agreement, we have agreed to use our reasonable best efforts (i) to file within 30 days after the closing of a Business Combination a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying Class A ordinary shares), (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later than sixty (60) days after the initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which NBOKS or its assignees cease to hold the securities covered thereby and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (iv) after such registration statement is declared effective, cause us to conduct firm commitment underwritten offerings, subject to certain limitations. In addition, the Forward Purchase Agreement provides that these holders will have certain "piggy-back" registration rights to include their securities in other registration statements filed by the Company.

~~Underwriting Agreement~~

We granted the underwriters a 45-day option from the date of the final prospectus to purchase up to 5,400,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. ~~On April 24, 2020, the underwriters fully exercised their over-allotment option.~~

The underwriters were entitled to an underwriting discount of $0.20 per unit, or $8.28 million, paid upon the closing of the Initial Public Offering. In addition, the underwriters will be entitled to a deferred underwriting commission of $0.35 per unit, or $14.49$3.6 million. The ~~deferred fee will become payable to~~Logistyx sellers disputed the ~~underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject~~working capital adjustment pursuant to the terms of the ~~underwriting agreement.~~Membership Interest Purchase Agreement. During October 2022, the parties agreed to a working capital adjustment of $2.6 million with the additional payment for working capital made to Logistyx on December 5, 2022.

During the second quarter of fiscal 2023, the market price of our Class A Common Stock and market capitalization declined significantly. This decline resulted in a triggering event, as such an interim goodwill impairment assessment was performed. We calculated the fair value of E2open under three different methods: discounted cash flow method, guideline public company method and guideline transaction method. The discounted cash flow method was based on the present value of estimated future cash flows which were based on management's estimates of revenue growth rates and net operating income margins, taking into consideration market and industry conditions. Under the guideline public company method, the fair value was based on forward-looking earnings multiples derived from comparable publicly traded companies with similar market position and size. Under the guideline transaction method, the fair value was based on pricing multiples derived from recently sold companies with similar characteristics to ours. The three approaches generated similar results and indicated that the fair value of E2open's equity and goodwill was less than its carrying amount. Therefore, in the second quarter of fiscal 2023, we recognized an impairment charge of $514.8 million to goodwill. See Note 7, Goodwill to the Notes to the Unaudited Condensed Consolidated Financial Statements.

~~Deferred Legal Fees~~

Results of Operations

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


	Three Months Ended November 30,						Nine Months Ended November 30,
($ in thousands)	2022			2021			2022			2021
Revenue	$	164,893		$	137,002		$	485,950		$	281,408
Cost of revenue		(80,750	)		(72,786	)		(242,682	)		(150,496	)
Total gross profit		84,143			64,216			243,268			130,912

Operating Expenses
Research and development		24,939			25,000			73,088			56,909
Sales and marketing		20,448			18,101			67,348			41,789
General and administrative		23,073			22,871			66,774			49,989
Acquisition-related expenses		1,969			33,216			14,313			50,168
Amortization of acquired intangible assets		19,965			19,470			62,523			26,843
Goodwill impairment		—			—			514,816			—
Total operating expenses		90,394			118,658			798,862			225,698
Loss from operations		(6,251	)		(54,442	)		(555,594	)		(94,786	)
Interest and other expense, net		(21,270	)		(10,769	)		(54,732	)		(22,004	)
Gain (loss) from change in tax receivable agreement liability		2,697			(1,470	)		9,089			(4,606	)
Gain (loss) from change in fair value of warrant liability		16,150			(7,232	)		36,764			(48,448	)
Gain (loss) from change in fair value of contingent consideration		6,300			(1,140	)		17,760			(91,180	)
Total other income (expenses)		3,877			(20,611	)		8,881			(166,238	)
Loss before income tax provision		(2,374	)		(75,053	)		(546,713	)		(261,024	)
Income tax benefit		7,877			10,764			130,010			3,392
Net income (loss)		5,503			(64,289	)		(416,703	)		(257,632	)
Less: Net income (loss) attributable to noncontrolling interest		698			(5,072	)		(41,464	)		(35,640	)
Net income (loss) attributable to E2open Parent Holdings, Inc.	$	4,805		$	(59,217	)	$	(375,239	)	$	(221,992	)
Net income (loss) attributable to E2open Parent Holdings, Inc. Class A common stockholders per share:
Basic	$	0.02		$	(0.19	)	$	(1.24	)	$	(0.98	)
Diluted	$	0.02		$	(0.19	)	$	(1.24	)	$	(0.98	)
Weighted-average common shares outstanding:
Basic		302,201			308,132			301,822			227,186
Diluted		302,359			308,132			301,822			227,186

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

Three Months Ended November 30, 2022 compared to Three Months Ended November 30, 2021

Revenue


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Revenue:
Subscriptions	$	134,884		$	106,969		$	27,915			26	%
Professional services and other		30,009			30,033			(24	)		0	%
Total revenue	$	164,893		$	137,002		$	27,891			20	%
Percentage of revenue:
Subscriptions		82	%		78	%
Professional services and other		18	%		22	%
Total		100	%		100	%

Subscriptions revenue was $134.9 million for the three months ended November 30, 2022, a $27.9 million, or 26%, increase compared to subscriptions revenue of $107.0 million for the three months ended November 30, 2021. The increase in subscriptions revenue was primarily due to the Logistyx Acquisition and new organic subscription sales predominantly driven by increases in products utilized across our current client portfolio, as well as the $10.4 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination in the third quarter of fiscal 2022. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue for the BluJay and Logistyx acquisitions was not recorded; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay and Logistyx acquisitions.

Professional services and other revenue was flat between periods at $30.0 million for the three months ended November 30, 2022 and 2021. The increase in professional services and other revenue was a result of the Logistyx Acquisition offset by lower revenue driven by our strategic focus on system integrator partnership initiatives, incremental data subscription sales and macroeconomic impact from the technology sector.

Our subscriptions revenue as a percentage of total revenue increased to 82% for the third quarter of fiscal 2023 compared to 78% for the third quarter of fiscal 2022. The third quarter of fiscal 2022 included $10.4 million amortization related to the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, reducing subscription revenue as a percentage of total revenue for that period.

Cost of Revenue, Gross Profit and Gross Margin


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Cost of revenue:
Subscriptions	$	35,931		$	30,163		$	5,768			19	%
Professional services and other		20,417			17,587			2,830			16	%
Amortization of acquired intangible assets		24,402			25,036			(634	)		-3	%
Total cost of revenue	$	80,750		$	72,786		$	7,964			11	%

Gross profit:
Subscriptions	$	74,551		$	51,771		$	22,780			44	%
Professional services and other		9,592			12,445			(2,853	)		-23	%
Total gross profit	$	84,143		$	64,216		$	19,927			31	%

Gross margin:
Subscriptions		55	%		48	%
Professional services and other		32	%		41	%
Total gross margin		51	%		47	%

Cost of subscriptions was $35.9 million for the three months ended November 30, 2022, a $5.8 million, or 19%, increase compared to $30.2 million for the three months ended November 30, 2021. This increase was primarily driven by a $3.9 million increase in software and hosting costs, predominately related to the Logistyx Acquisition.

Cost of professional services and other revenue was $20.4 million for the three months ended November 30, 2022, a $2.8 million, or 16%, increase compared to $17.6 million for the three months ended November 30, 2021. Personnel costs such as salaries increased $1.1 million, primarily due to the Logistyx Acquisition in March 2022. Additionally, consulting expenses increased $2.3 million when compared to the prior year, primarily driven by our investment in strategic system integrator partnership initiatives.

Amortization of acquired intangible assets was $24.4 million for the three months ended November 30, 2022, a $0.6 million, or 3%, decrease compared to $25.0 million for the three months ended November 30, 2021, driven primarily by the Logistyx Acquisition in March 2022.

Our subscriptions gross margin was 55% for the third quarter of fiscal 2023 compared to 48% for the third quarter of fiscal 2022 primarily due to the $10.4 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination in fiscal 2022 offset by the additional revenue from the Logistyx Acquisition in fiscal 2023. With the early adoption of ASU 2021-08, the BluJay and Logistyx deferred revenue was recorded under ASC 606 and not at fair value at the acquisition date; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay or Logistyx acquisitions.

Our professional services gross margin was down for the third quarter of fiscal 2023 at 32% compared to 41% in the third quarter of fiscal 2022 primarily due to our investment in strategic system integrator partnership initiatives.

Research and Development


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Research and development	$	24,939		$	25,000		$	(61	)		0	%
Percentage of revenue		15	%		18	%

Research and development expenses were $24.9 million for the three months ended November 30, 2022, a $0.1 million decrease compared to $25.0 million in the prior year. The decrease was primarily due to a $2.7 million decrease in incentive compensation, partially offset by a $1.1 million increase in depreciation expense as compared to the prior year period.

Sales and Marketing


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Sales and marketing	$	20,448		$	18,101		$	2,347		13	%
Percentage of revenue		12	%		13	%

Sales and marketing expenses were $20.4 million for the three months ended November 30, 2022, a $2.3 million, or 13%, increase compared to $18.1 million in the prior year. The increase was primarily driven by a $1.8 million increase in digital and social marketing related to the launch of our new website, company store and new brand.

General and Administrative


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
General and administrative	$	23,073		$	22,871		$	202		1	%
Percentage of revenue		14	%		17	%

General and administrative expenses were $23.1 million for the three months ended November 30, 2022, a $0.2 million increase compared to $22.9 million in the prior year. During the third quarter of fiscal 2023, we incurred a $1.8 million impairment on our operating lease ROU assets and leasehold improvements due to vacating locations with the intent to sublease them. This increase was partially offset by a $1.5 million decrease in personnel costs such as salaries and incentive compensation compared to the prior year period and $1.1 million decrease due to the BluJay Acquisition in September 2021.

Other Operating Expenses


	Three Months Ended November 30,
($ in thousands)	2022		2021		$ Change			% Change
Acquisition and other related expenses	$	1,969	$	33,216	$	(31,247	)		-94	%
Amortization of acquired intangible assets		19,965		19,470		495			3	%
Total other operating expenses	$	21,934	$	52,686	$	(30,752	)		-58	%

Acquisition and other related expenses were $2.0 million for the three months ended November 30, 2022, a $31.2 million decrease compared to $33.2 million for the three months ended November 30, 2021. The decrease was mainly related to legal and consulting expenses associated with the BluJay Acquisition in fiscal 2022.

Amortization of acquired intangible assets were $20.0 million for the three months ended November 30, 2022, a $0.5 million, or 3%, increase, compared to $19.5 million for the three months ended November 30, 2021. The increase was due to the Logistyx Acquisition in March 2022.

Goodwill Impairment

We ~~obtained~~did not incur a goodwill impairment charge during the third quarter of fiscal 2023 or 2022.

Interest and Other Expense, Net


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Interest and other expense, net	$	(21,270	)	$	(10,769	)	$	(10,501	)		98	%

Interest and other expense, net was $21.3 million for the three months ended November 30, 2022, a $10.5 million increase compared to $10.8 million in the prior year. The increase was primarily driven by the additional term loans used for the BluJay Acquisition in September 2021 and Logistyx Acquisition in March 2022, as well as higher interest rates in fiscal 2023.

Gain (Loss) from Change in Tax Receivable Agreement


	Three Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in tax receivable agreement liability	$	2,697	$	(1,470	)	$	4,167	nm

During the three months ended November 30, 2022, we recorded a gain of $2.7 million related to the change in the fair value of the tax receivable agreement liability, including interest, compared to a $1.5 million expense during the three months ended November 30, 2021. Pursuant to ASC 805, Business Combination and relevant tax law, we calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in gain (loss) from change in tax receivable agreement liability in the Unaudited Condensed Consolidated Statements of Operations in the period in which the event occurred.

In addition, under ASC 450, transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. During the three months ended November 30, 2022 and 2021, the Tax Receivable Agreement liability under ASC 450 increased by $0.4 million and $3.1 million, respectively.

Gain (Loss) from Change in Fair Value of Warrant Liability


	Three Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in fair value of warrant liability	$	16,150	$	(7,232	)	$	23,382	nm

We recorded a gain of $16.2 million during the three months ended November 30, 2022, a $23.4 million increase compared to a loss of $7.2 million in the prior year for the change in fair value on the revaluation of our warrant liability associated with our public, private placement and forward purchase warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred.

Gain (Loss) from Change in Fair Value of Contingent Consideration


	Three Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in fair value of contingent consideration	$	6,300	$	(1,140	)	$	7,440	nm

We recorded a gain of $6.3 million during the three months ended November 30, 2022, a $7.4 million increase compared to a loss of $1.1 million in the prior year for the change in fair value on the revaluation of our contingent consideration associated with our restricted B-2 common stock and Series 2 RCUs. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred.

Provision for Income Taxes


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Loss before income taxes	$	(2,374	)	$	(75,053	)	$	72,679			-97	%
Income tax benefit		7,877			10,764			(2,887	)		-27	%

Loss before income taxes was $2.4 million for the three months ended November 30, 2022, a $72.7 million decrease compared to $75.1 million for the three months ended November 30, 2021. The decrease in the loss was primarily related to a $19.9 million higher gross profit due to the Logistyx Acquisition and a decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination as well as a $31.2 million reduction in acquisition and other related expenses due to the BluJay Acquisition in September 2021. Additionally, there was a $23.4 million increase in the gain associated with the change in the fair value of the warrant liability and a $7.4 million increase in the gain associated with the fair value adjustments for the fair contingent consideration liability related to the restricted Series B-2 common stock and Series 2 RCUs when compared to the prior year. These gains were partially offset by $10.5 million of higher interest expense.

Income tax benefit was $7.9 million, or 331.8%, for the three months ended November 30, 2022 compared to $10.8 million, or 14.3%, for the three months ended November 30, 2021. The change in our effective tax rate between periods was due to changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment, year-over-year changes in book losses in certain jurisdictions for which no benefit can be recognized and changes in the mark-to-market gains and losses on certain contingent liabilities. For the three months ended November 30, 2021, in accordance with ASC 740-20-45-11, we accounted for the tax effect of the step-up in income tax basis related to transactions with or among shareholders and recognized a deferred tax asset and corresponding increase in stockholders' equity of $36.8 million.

Nine Months Ended November 30, 2022 compared to Nine Months Ended November 30, 2021

Revenue


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Revenue:
Subscriptions	$	396,052		$	219,728		$	176,324		80	%
Professional services and other		89,898			61,680			28,218		46	%
Total revenue	$	485,950		$	281,408		$	204,542		73	%
Percentage of revenue:
Subscriptions		82	%		78	%
Professional services and other		18	%		22	%
Total		100	%		100	%

Subscriptions revenue was $396.1 million for the nine months ended November 30, 2022, a $176.3 million, or 80%, increase compared to subscriptions revenue of $219.7 million for the nine months ended November 30, 2021. The increase in subscriptions revenue was primarily due to the BluJay Acquisition, Logistyx Acquisition and new organic subscription sales predominantly driven by increases in products utilized across our current client portfolio, as well as the $47.1 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination in the first nine months of fiscal 2022. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue for the BluJay and Logistyx acquisitions was not recorded; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay and Logistyx acquisitions.

Professional services and other revenue was $89.9 million for the nine months ended November 30, 2022, a $28.2 million, or 46%, increase compared to $61.7 million for the nine months ended November 30, 2021. The increase was primarily related to the BluJay Acquisition and Logistyx Acquisition.

Our subscriptions revenue as a percentage of total revenue increased to 82% for the first nine months of fiscal 2023 compared to 78% for the first nine months of fiscal 2022. The first nine months of fiscal 2022 included $47.1 million amortization related to the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, reducing subscription revenue as a percentage of total revenue for that period.

Cost of Revenue, Gross Profit and Gross Margin


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Cost of revenue:
Subscriptions	$	105,367		$	62,917		$	42,450		67	%
Professional services and other		63,446			38,694			24,752		64	%
Amortization of acquired intangible assets		73,869			48,885			24,984		51	%
Total cost of revenue	$	242,682		$	150,496		$	92,186		61	%

Gross profit:
Subscriptions	$	216,816		$	107,927		$	108,889	nm
Professional services and other		26,452			22,985			3,467		15	%
Total gross profit	$	243,268		$	130,912		$	112,356		86	%

Gross margin:
Subscriptions		55	%		49	%
Professional services and other		29	%		37	%
Total gross margin		50	%		47	%

Cost of subscriptions was $105.4 million for the nine months ended November 30, 2022, a $42.5 million, or 67%, increase compared to $62.9 million for the nine months ended November 30, 2021. This increase was primarily driven by $28.3 million related to the BluJay and Logistyx acquisitions and an increase in personnel costs for items such as salaries and incentive compensation. Additionally, there was an increase of $13.9 million for software and hosting costs. Most of this increase related to the BluJay and Logistyx acquisitions.

Cost of professional services and other revenue was $63.4 million for the nine months ended November 30, 2022, a $24.8 million, or 64%, increase compared to $38.7 million for the nine months ended November 30, 2021. The BluJay Acquisition in fiscal 2022, Logistyx Acquisition in fiscal 2023, increased personnel costs such as salaries and incentive compensation, our investment in strategic system integrator partnership initiatives and increased travel accounted for $24.1 million of the increase in the cost of professional services and other revenue.

Amortization of acquired intangible assets was $73.9 million for the nine months ended November 30, 2022, a $25.0 million, or 51%, increase compared to $48.9 million for the nine months ended November 30, 2021, driven by the BluJay Acquisition in September 2021 and Logistyx Acquisition in March 2022.

Our subscriptions gross margin was 55% for the first nine months of fiscal 2023 as compared to 49% for the first nine months of fiscal 2022 primarily due to the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination offset by the additional revenue from the BluJay and Logistyx acquisitions in fiscal 2023. With the early adoption of ASU 2021-08, the BluJay and Logistyx deferred revenue was recorded under ASC 606 and not at fair value at the acquisition date; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay or Logistyx acquisitions.

Our professional services gross margin was down to 29% for the first nine months of fiscal 2023 compared to 37% for the first nine months of fiscal 2022 primarily due to our investment in strategic system integrator partnership initiatives.

Research and Development


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Research and development	$	73,088		$	56,909		$	16,179		28	%
Percentage of revenue		15	%		20	%

Research and development expenses were $73.1 million for the nine months ended November 30, 2022, a $16.2 million, or 28%, increase compared to $56.9 million in the prior year. The increase was primarily due to $13.6 million related to the BluJay and Logistyx acquisitions as well as major strategic partnership initiatives around product development efforts during fiscal year 2023, which resulted in net increased personnel costs such as salaries and incentive compensation and consulting expenses as compared to the prior year period. Additionally, there was an increase of $1.0 million for software and hosting costs.

Sales and Marketing


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Sales and marketing	$	67,348		$	41,789		$	25,559		61	%
Percentage of revenue		14	%		15	%

Sales and marketing expenses were $67.3 million for the nine months ended November 30, 2022, a $25.6 million, or 61%, increase compared to $41.8 million in the prior year. The increase was primarily driven by a $21.8 million increase due to the BluJay Acquisition in fiscal 2022 and Logistyx Acquisition in fiscal 2023 as well as additional expenses associated with our new corporate branding, digital and social marketing related to the launch of our new brand and website, company store and integrated marketing experience as well as hiring additional marketing resources. Additionally, there was an increase of $1.6 million for travel and entertainment and $1.1 million in share-based compensation.

General and Administrative


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
General and administrative	$	66,774		$	49,989		$	16,785		34	%
Percentage of revenue		14	%		18	%

General and administrative expenses were $66.8 million for the nine months ended November 30, 2022, a $16.8 million, or 34%, increase compared to $50.0 million in the prior year. The increase was primarily attributable to $8.4 million related to the BluJay and Logistyx acquisitions. Additionally, there was an increase of $2.7 million for share-based compensation. During fiscal 2023, we incurred a $4.1 million impairment on our operating lease ROU assets and leasehold improvements due to vacating locations with the intent to sublease them.

Other Operating Expenses


	Nine Months Ended November 30,
($ in thousands)	2022		2021		$ Change			% Change
Acquisition and other related expenses	$	14,313	$	50,168	$	(35,855	)		-71	%
Amortization of acquired intangible assets		62,523		26,843		35,680		nm
Total other operating expenses	$	76,836	$	77,011	$	(175	)		0	%

Acquisition and other related expenses were $14.3 million for the nine months ended November 30, 2022, a $35.9 million, or 71%, decrease compared to $50.2 million for the nine months ended November 30, 2021. The decrease was mainly related to legal and consulting expenses associated with the Logistyx Acquisition in fiscal 2023 and BluJay Acquisition in fiscal 2022.

Amortization of acquired intangible assets was $62.5 million for the nine months ended November 30, 2022, a $35.7 million increase, compared to $26.8 million for the nine months ended November 30, 2021. The increase was a result of the BluJay Acquisition in September 2021 and Logistyx Acquisition in March 2022.

Goodwill Impairment

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

Interest and Other Expense, Net


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Interest and other expense, net	$	(54,732	)	$	(22,004	)	$	(32,728	)	nm

Interest and other expense, net was $54.7 million for the nine months ended November 30, 2022, a $32.7million increase compared to $22.0 million in the prior year. The increase was primarily driven by the additional term loans used for the BluJay Acquisition in September 2021 and Logistyx Acquisition in March 2022, as well as higher interest rates in fiscal 2023.

Gain (Loss) from Change in Tax Receivable Agreement


	Nine Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in tax receivable agreement liability	$	9,089	$	(4,606	)	$	13,695	nm

During the nine months ended November 30, 2022, we recorded a gain of $9.1 million related to the change in the fair value of the tax receivable agreement liability, including interest, compared to a $4.6 million expense during the nine months ended November 30, 2021. Pursuant to ASC 805, Business Combination and relevant tax law, we calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in gain (loss) from change in tax receivable agreement liability in the Unaudited Condensed Consolidated Statements of Operations in the period in which the event occurred.

In addition, under ASC 450, transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. During the nine months ended November 30, 2022 and 2021, the Tax Receivable Agreement liability under ASC 450 increased by $0.7 million and $13.2 million, respectively.

Gain (Loss) from Change in Fair Value of Warrant Liability


	Nine Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in fair value of warrant liability	$	36,764	$	(48,448	)	$	85,212	nm

We recorded a gain of $36.8 million during the nine months ended November 30, 2022, a $85.2 million increase compared to a loss of $48.4 million in the prior year for the change in fair value on the revaluation of our warrant liability associated with our public, private placement and forward purchase warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred.

Gain (Loss) from Change in Fair Value of Contingent Consideration


	Nine Months Ended November 30,
($ in thousands)	2022		2021			$ Change		% Change
Gain (loss) from change in fair value of contingent consideration	$	17,760	$	(91,180	)	$	108,940	nm

We recorded a gain of $17.8 million during the nine months ended November 30, 2022, a $108.9 million increase compared to a loss of $91.2 million in the prior year for the change in fair value on the revaluation of our contingent consideration associated with our restricted B-2 common stock and Series 2 RCUs. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred.

Provision for Income Taxes


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
Loss before income taxes	$	(546,713	)	$	(261,024	)	$	(285,689	)	nm
Income tax benefit		130,010			3,392			126,618		nm

Loss before income taxes was $546.7 million for the nine months ended November 30, 2022, a $285.7 million increase compared to $261.0 million for the nine months ended November 30, 2021. This increase in the loss was primarily related to the $514.8 million impairment on goodwill taken in the second quarter of fiscal 2023. The remaining increase was related to $58.3 million of higher operating expenses, $32.7 million of higher interest expense and a $35.7 million increase in the amortization of the intangible assets when compared to the prior year. These expenses were partially offset by a $112.4 million higher gross profit due to the BluJay and Logistyx acquisitions along with a decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $47.1 million. Additionally, there was a $85.2 million gain on the change in the fair value adjustments for the warrant liability and a $108.9 million gain associated with the fair value adjustments for the contingent consideration liability related to the restricted Series B-2 common stock and Series 2 RCUs when compared to the prior year.

Income tax benefit was $130.0 million, or 23.8%, for the nine months ended November 30, 2022 compared to $3.4 million, or 1.3%, for the nine months ended November 30, 2021. The change in our effective tax rate between periods was primarily due to the reduction in our deferred tax liability as a result of the goodwill impairment, year-over-year changes in book losses in certain jurisdictions for which no benefit can be recognized, changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment, and changes in the mark-to-market gains and losses on certain contingent liabilities.

Non-GAAP Financial Measures

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

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

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

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


	Three Months Ended November 30,				Nine Months Ended November 30,
($ in thousands)	2022		2021		2022		2021
Subscriptions revenue	$	134,884	$	106,969	$	396,052	$	219,728
Business Combination adjustment (1)		—		10,394		—		47,099
Non-GAAP subscriptions revenue		134,884		117,363		396,052		266,827
Professional services and other revenue		30,009		30,033		89,898		61,680
Non-GAAP revenue	$	164,893	$	147,396	$	485,950	$	328,507

(1)

Includes the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. As of February 28, 2022, the remaining balance of the deferred revenue purchase price adjustment was $0.5 million which results in an immaterial quarterly amortized amount reported in the Unaudited Condensed Consolidated Statements of Operations; therefore, an amount will not be presented for fiscal 2023.

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


	Three Months Ended November 30,						Nine Months Ended November 30,
($ in thousands)	2022			2021			2022			2021
Gross profit
Reported gross profit	$	84,143		$	64,216		$	243,268		$	130,912
Business Combination adjustment (1)		—			10,394			—			47,099
Depreciation and amortization		28,388			27,771			85,447			56,823
Non-recurring/non-operating costs (2)		513			506			2,115			1,090
Share-based compensation (3)		542			482			862			1,012
Non-GAAP gross profit	$	113,586		$	103,369		$	331,692		$	236,936
Gross margin		51.0	%		46.9	%		50.1	%		46.5	%
Non-GAAP gross margin		68.9	%		70.1	%		68.3	%		72.1	%

(1)

Includes the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. As of February 28, 2022, the remaining balance of the deferred revenue purchase price adjustment was $0.5 million which results in an immaterial quarterly amortized amount reported in the Unaudited Condensed Consolidated Statements of Operations; therefore, an amount will not be presented for fiscal 2023.

(2)

Primarily includes other non-recurring expenses such as systems integrations and consulting and advisory ~~services from two~~fees.

(3)

Reflects non-cash, long-term share-based compensation expense, primarily related to senior management.

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


	Three Months Ended November 30,						Nine Months Ended November 30,
($ in thousands)	2022			2021			2022			2021
Net income (loss)	$	5,503		$	(64,289	)	$	(416,703	)	$	(257,632	)
Adjustments:
Interest expense, net		19,509			9,981			52,411			22,161
Income tax benefit		(7,877	)		(10,764	)		(130,010	)		(3,392	)
Depreciation and amortization		52,451			50,496			159,831			91,496
EBITDA		69,586			(14,576	)		(334,471	)		(147,367	)
EBITDA Margin		42.2	%		-10.6	%		-68.8	%		-52.4	%
Business Combination adjustment (1)		—			10,394			—			47,099
Goodwill impairment charge (2)		—			—			514,816			—
Right-of-use assets impairment charge (3)		1,761			—			4,137			—
Acquisition-related adjustments (4)		1,969			33,216			14,313			50,168
Gain (loss) from change in tax receivable agreement liability (5)		(2,697	)		1,470			(9,089	)		4,606
(Gain) loss from change in fair value of warrant liability (6)		(16,150	)		7,232			(36,764	)		48,448
(Gain) loss from change in fair value of contingent consideration (7)		(6,300	)		1,140			(17,760	)		91,180
Non-recurring/non-operating costs (8)		3,189			2,987			7,563			5,486
Share-based compensation (9)		4,797			4,027			13,157			8,961
Adjusted EBITDA	$	56,155		$	45,890		$	155,902		$	108,581
Adjusted EBITDA Margin		34.1	%		31.1	%		32.1	%		33.1	%

(1)

(2)

Represents the goodwill impairment taken in the second quarter of fiscal 2023.

(3)

Represents the impairment on our operating lease ROU assets and leasehold improvements due to vacating certain facilities.

(4)

Primarily includes advisory, consulting, accounting and legal ~~counsel firms~~expenses and severance incurred in connection with mergers and acquisitions activities including costs related to the Business Combination, BluJay Acquisition and Logistyx Acquisition.

(5)

Represents the fair value adjustment at each balance sheet date for the Tax Receivable Agreement along with the associated interest.

(6)

Represents the fair value adjustment at each balance sheet date of the warrant liability related to the public, private placement and forward purchase warrants.

(7)

Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted Series B-1 and B-2 common stock, Sponsor Side Letter and Series 1 and 2 RCUs. The Series B-1 common stock, Sponsor Side Letter and Series 1 RCUs were automatically converted into our Class A Common Stock on a one-to-one basis as of June 8, 2021.

(8)

Primarily includes non-recurring expenses such as systems integrations, legal entity rationalization and consulting and advisory fees. In addition, the fiscal 2023 includes $0.8 million for executive severance.

(9)

Reflects non-cash, long-term share-based compensation expense, primarily related to senior management. For the three months ended November 30, 2022 and 2021, share-based compensation included less than $0.1 million expense attributable to certain unit-based awards in connection with the ~~Initial Public Offering~~Amber Road, Inc. acquisition in 2019. For the nine months ended November 30, 2022 and ~~agreed~~2021, share-based compensation included less than $0.1 million and $0.4 million expense, respectively, attributable to ~~pay their fees upon the consummation of the initial Business Combination. As of March 31, 2020, we recorded approximately $758,000 in deferred legal fees~~certain unit-based awards in connection with ~~such agreements~~the Amber Road, Inc. acquisition

Three Months Ended November 30, 2022 compared to Three Months Ended November 30, 2021

Non-GAAP Subscriptions Revenue


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Non-GAAP subscriptions revenue	$	134,884		$	117,363		$	17,521		15	%
Percentage of Non-GAAP revenue		82	%		80	%

Non-GAAP subscriptions revenue was $134.9 million for the three months ended November 30, 2022, a $17.5 million, or 15%, increase compared to $117.4 million for the three months ended November 30, 2021. The increase in Non-GAAP subscriptions revenue relates to the Logistyx Acquisition and new organic subscription sales predominately driven by increases in products utilized across our client portfolio.

Non-GAAP Revenue


	Three Months Ended November 30,
($ in thousands)	2022		2021		$ Change		% Change
Non-GAAP revenue	$	164,893	$	147,396	$	17,497		12	%

Non-GAAP revenue was $164.9 million for the three months ended November 30, 2022, a $17.5 million, or 12%, increase compared to $147.4 million for the three months ended November 30, 2021. The increase in Non-GAAP revenue was mainly due to an increase in our subscriptions revenue related to the Logistyx Acquisition and new organic sales driven by increases in products utilized across our current client portfolio.

Gross Profit


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Gross profit	$	84,143		$	64,216		$	19,927		31	%
Gross margin		51.0	%		46.9	%

Gross profit was $84.1 million for the three months ended November 30, 2022, a $19.9 million, or 31%, increase compared to $64.2 million for three months ended November 30, 2021. The increase in gross profit was primarily due to the Logistyx Acquisition as well as the decrease in the ~~accompanying~~amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $10.4 million. Gross margin was 51% for the third quarter of fiscal 2023 compared to 47% for the third quarter of fiscal 2022.

Non-GAAP Gross Profit


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Non-GAAP gross profit	$	113,586		$	103,369		$	10,217		10	%
Non-GAAP gross margin		68.9	%		70.1	%

Non-GAAP gross profit was $113.6 million for the three months ended November 30, 2022, a $10.2 million, or 10%, increase compared to $103.4 million for the three months ended November 30, 2021. The increase in adjusted gross profit was primarily due to the Logistyx Acquisition. The Non-GAAP gross margin decreased in the third quarter of fiscal 2023 to 69% compared to 70% in the third quarter of fiscal 2022 due to our investment in strategic system integrator partnership initiatives as well as increased hosting and labor costs.

EBITDA


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
EBITDA	$	69,586		$	(14,576	)	$	84,162	nm
EBITDA margin		42.2	%		-10.6	%

EBITDA was $69.6 million for the three months ended November 30, 2022, a $84.2 million increase compared to $14.6 million for three months ended November 30, 2021. EBITDA margin increased to 42% for the third quarter of fiscal 2023 compared to a negative 11% in the prior year. The increase in EBITDA and EBITDA margin was primarily related to higher revenues in fiscal year 2023, $7.4 million increase in gain associated with the fair value adjustment for the contingent consideration liability related to the restricted Series B-2 common stock and $23.4 million increase in gain on the change in fair value of the warrant liability in fiscal 2023 as compared to fiscal 2022. Additionally, there was a decrease of $10.4 million in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination and $31.2 million of acquisition-related expenses related to the BluJay Acquisition when compared to fiscal 2022.

Adjusted EBITDA


	Three Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Adjusted EBITDA	$	56,155		$	45,890		$	10,265		22	%
Adjusted EBITDA margin		34.1	%		31.1	%

Adjusted EBITDA was $56.2 million for the three months ended November 30, 2022, a $10.3 million increase compared to $45.9 million for the three months ended November 30, 2021. Adjusted EBITDA margin was 34% for the third quarter of fiscal 2023 compared to 31% for the third quarter of fiscal 2022 primarily due to higher revenues combined with reduced operating expenses as a percentage of revenue yielding increased operating leverage.

Nine Months Ended November 30, 2022 compared to Nine Months Ended November 30, 2021

Non-GAAP Subscriptions Revenue


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Non-GAAP subscriptions revenue	$	396,052		$	266,827		$	129,225		48	%
Percentage of Non-GAAP revenue		82	%		81	%

Non-GAAP subscriptions revenue was $396.1 million for the nine months ended November 30, 2022, a $129.2 million, or 48%, increase compared to $266.8 million for the nine months ended November 30, 2021. The increase in Non-GAAP subscriptions revenue relates to the BluJay and Logistyx acquisitions and new organic subscription sales predominately driven by increases in products utilized across our client portfolio.

Non-GAAP Revenue


	Nine Months Ended November 30,
($ in thousands)	2022		2021		$ Change		% Change
Non-GAAP revenue	$	485,950	$	328,507	$	157,443		48	%

Non-GAAP revenue was $486.0 million for the nine months ended November 30, 2022, a $157.4 million, or 48%, increase compared to $328.5 million for the nine months ended November 30, 2021. The increase in Non-GAAP revenue was mainly due to the $129.2 million increase in our subscriptions revenue related to the BluJay and Logistyx acquisitions and new organic sales driven by increases in products utilized across our current client portfolio. Additionally, $28.2 million of the increase was due to an increase in our professional services revenue primarily related to the BluJay and Logistyx acquisitions.

Gross Profit


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Gross profit	$	243,268		$	130,912		$	112,356		86	%
Gross margin		50.1	%		46.5	%

Gross profit was $243.3 million for the nine months ended November 30, 2022, a $112.4 million, or 86%, increase compared to $130.9 million for nine months ended November 30, 2021. The increase in gross profit was primarily due to the BluJay and Logistyx acquisitions as well as the decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $47.1 million. Gross margin was 50% for the first nine months of fiscal 2023 compared to 47% for the first nine months of fiscal 2022.

Non-GAAP Gross Profit


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Non-GAAP gross profit	$	331,692		$	236,936		$	94,756		40	%
Non-GAAP gross margin		68.3	%		72.1	%

Non-GAAP gross profit was $331.7 million for the nine months ended November 30, 2022, a $94.8 million, or 40%, increase compared to $236.9 million for the nine months ended November 30, 2021. The increase in adjusted gross profit was primarily due to the BluJay and Logistyx acquisitions. The Non-GAAP gross margin percentage decreased in the first nine months of fiscal 2023 to 68% compared to 72% in the first nine months of fiscal 2022 due to our investment in strategic system integrator partnership initiatives as well as increased hosting and labor costs.

EBITDA


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change			% Change
EBITDA	$	(334,471	)	$	(147,367	)	$	(187,104	)	nm
EBITDA margin		-68.8	%		-52.4	%

EBITDA was a loss of $334.5 million for the nine months ended November 30, 2022, a $187.1 million increase compared to a loss of $147.4 million for nine months ended November 30, 2021. EBITDA margins were a negative 69% for the first nine months of fiscal 2023 compared to a negative 52% in the prior year. The decrease in EBITDA and EBITDA margin was primarily related to the $514.8 million goodwill impairment taken in the second quarter of fiscal 2023. This expense was partially offset by a decrease of $47.1 million in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. Additionally, there was a $35.8 million decrease in acquisition related expenses, higher revenues in fiscal 2023, a $85.2 million higher gain for the fair value adjustment for the warrant liability and a $108.9 million higher gain associated with the fair value adjustment for the contingent consideration liability related to the restricted Series B-2 common stock when compared to the first nine months of fiscal 2022.

Adjusted EBITDA


	Nine Months Ended November 30,
($ in thousands)	2022			2021			$ Change		% Change
Adjusted EBITDA	$	155,902		$	108,581		$	47,321		44	%
Adjusted EBITDA margin		32.1	%		33.1	%

Adjusted EBITDA was $155.9 million for the nine months ended November 30, 2022, a $47.3 million, or 44%, increase compared to $108.6 million for the nine months ended November 30, 2021. Adjusted EBITDA margin was 32% for the first nine months of fiscal 2023 compared to 33% for the first nine months of fiscal 2022 primarily due to a lower gross margin driven by our investment in strategic system integrator partnership initiatives as well as increased hosting and labor costs.

Liquidity and Capital Resources

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

We had $85.7 million in cash and cash equivalents and $145.0 million of unused borrowing capacity under our 2021 Revolving Credit Facility as of November 30, 2022. See Note 13, Notes Payable to the Notes to the Unaudited Condensed Consolidated Financial Statements. We believe our existing cash and cash equivalents, cash provided by operating activities and, if necessary, the borrowing capacity under our 2021 Revolving Credit Facility will be sufficient to meet our working capital, debt repayment, capital expenditure requirements and share repurchases for at least the next twelve months.

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

Share Repurchase Program

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

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

Debt

2021 Term Loan and Revolving Credit Facility

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

The 2021 Term Loan has a variable interest rate which was 6.64% and 4.00% as of November 30, 2022 and February 28, 2022, respectively. As of November 30, 2022 and February 28, 2022, the 2021 Term Loan had a principal balance ~~sheet.~~outstanding of $1,080.9 million and $899.2 million, respectively. There were $10.0 million outstanding borrowings at an interest rate of 6.77%, no letters of credit and $145.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of November 30, 2022. These borrowings were used for general operating activities. There were $80.0 million of borrowings outstanding at an interest rate of 5.25%, no outstanding letters of credit and $75.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of February 28, 2022.

On January 9, 2023, we repaid the outstanding $10.0 million balance on our 2021 Revolving Credit Facility. After this repayment, our available borrowing capacity under the 2021 Revolving Credit Facility is $155.0 million.

The average interest rate on our 2021 Term Loan was impacted by changes in market interest rates, which was attributed to the Federal Open Market Committee (FOMC) of the Federal Reserve repeatedly raising their target benchmark interest rate in the first nine months of fiscal 2023, resulting in subsequent prime rate increases of 375 basis points between March and November 2022. Based on our current outstanding 2021 Term Loan, this increase would result in an additional $40.5 million of interest expense per year.

Cash Flows

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


	Nine Months Ended November 30,
($ in thousands)	2022			2021
Net cash provided by operating activities	$	43,151		$	28,182
Net cash used in investing activities		(222,716	)		(798,859	)
Net cash provided by financing activities		103,351			632,987
Effect of exchange rate changes on cash and cash equivalents		478			1,657
Net decrease in cash, cash equivalents and restricted cash		(75,736	)		(136,033	)
Cash, cash equivalents and restricted cash at beginning of period		174,554			207,542
Cash, cash equivalents and restricted cash at end of period	$	98,818		$	71,509

Nine Months Ended November 30, 2022 compared to Nine Months Ended November 30, 2021

As of November 30, 2022, our consolidated cash, cash equivalents and restricted cash was $98.8 million, a $75.7 million decrease from our balance of $174.6 million as of February 28, 2022.

Net cash provided by operating activities for the nine months ended November 30, 2022 was $43.2 million compared to $28.2 million for the nine months ended November 30, 2021. The $15.0 million increase in cash was primarily driven by the additional gross profits contributed by BluJay and Logistyx as well as organic growth partially offset by the use of $86.3 million of cash for working capital items such as the decrease in cash provided by accounts receivable, the increase in cash for accounts payable and accrued liabilities and the recognition of deferred revenue in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022.

Net cash used in investing activities was $222.7 million and $798.9 million for the nine months ended November 30, 2022 and 2021, respectively. During fiscal year 2023, net cash of $179.2 million was used for the Logistyx Acquisition while $774.2 million of cash was used for the BluJay Acquisition during fiscal 2022. Additionally, we made a $3.0 million minority investment in a private firm during the first quarter of fiscal 2023. During the nine months of fiscal 2023 and 2022, $40.5 million and $24.6 million were used for the acquisition of software and property related to our data centers, respectively.

Net cash provided by financing activities for the nine months ended November 30, 2022 was $103.4 million compared to $633.0 million for nine months ended November 30, 2021. The decrease in cash provided by financing activities was mainly due to the following:

•

We received $300.0 million in PIPE investment proceeds and obtained additional borrowings of $380.0 million for the BluJay Acquisition under the 2021 Revolving Credit Facility in fiscal 2022 compared to the $190.0 million incremental term loan for the Logistyx Acquisition in fiscal 2023;

•

During fiscal 2023 we borrowed an additional $10.0 million and repaid $80.0 million more on the 2021 Revolving Credit Facility when compared to fiscal 2022;

•

We paid an additional $4.5 million on the 2021 Term Loan during fiscal 2023 when compared to fiscal 2022;

•

During fiscal 2023, we paid $4.8 million in debt issuance costs related to the $190.0 million term loan compared to $10.4 million in debt issuance costs related to the additional borrowings in fiscal 2022;

•

We paid an additional $15.4 million more for the repurchase of Common Units upon conversion to cash during fiscal 2022 than we did in fiscal 2023;

•

During fiscal 2022, we paid $2.5 million for the repurchase of common stock to pay withholding taxes; and

•

We paid $7.1 million of offering costs associated with the PIPE investment financing during fiscal 2022.

Tax Receivable Agreement

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

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

The liability related to the Tax Receivable Agreement was $58.2 million and $66.6 million as of November 30, 2022 and February 28, 2022, respectively, assuming (1) a corporate tax rate of 24.2% as of November 30, 2022 and 24.1% as of February 28, 2022, (2) no dispositions of corporate subsidiaries, (3) no material changes in tax law and (4) we do not elect an early termination of the Tax Receivable Agreement. However, due to the uncertainty of various factors, including: (a) the timing and value of future exchanges, (b) the amount and timing of our future taxable income, (c) changes in our tax rate, (d) no future dispositions of any corporate stock, (e) changes in the tax law and (f) changes in the discount rate, the likely tax savings we will realize and the resulting amounts we are likely to pay to the selling equity holders of E2open Holdings pursuant to the Tax Receivable Agreement are uncertain. Additionally, interest will accrue on the portion of the Tax Receivable Agreement liability recorded under ASC 805 at a rate of LIBOR plus 100 basis points. The portion of the Tax Receivable Agreement liability under ASC 450 is recorded on a gross undiscounted basis.

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

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

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

Contingent Consideration

The contingent consideration liability was $27.8 million and $45.6 million as of November 30, 2022 and February 28, 2022, respectively. The fair value remeasurements resulted in a gain of $6.3 million and loss of $1.1 million for the three months ended November 30, 2022 and 2021, respectively. The fair value remeasurements resulted in a gain of $17.8 million and a loss of $91.2 million for the nine months ended November 30, 2022 and 2021, respectively. The contingent liability represents the Series B-1 common stock, Series B-2 common stock, Series 1 RCUs and Series 2 RCUs.

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

Logistyx Acquisition

On March 2, 2022, E2open, LLC acquired Logistyx for a purchase price of $185 million, and an estimated fair value of $183.4 million, including $90 million paid in cash at closing. An additional $95 million was paid in two installments on May 31, 2022 and September 1, 2022. We had the option to finance the remaining payments, at our discretion, through cash or a combination of cash and Class A Common Stock. The May 31, 2022 payment of $37.4 million was paid with cash. On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx as the final installment payment for the Logistyx Acquisition which reflected a working capital adjustment of $3.6 million. The Logistyx sellers disputed the working capital adjustment pursuant to the terms of the Membership Interest Purchase Agreement. During October 2022, the parties agreed to a working capital adjustment of $2.6 million. The additional payment for working capital was made to Logistyx on December 5, 2022.

Leases

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

Our non-cancelable operating leases for our office spaces and vehicles have various expiration dates through June 2030. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of November 30, 2022 were: $2.6million for December 1, 2022 through February 28, 2023, $8.9 million for fiscal 2024, $7.0 million for fiscal 2025, $4.4 million for fiscal 2026, $3.0 million for fiscal 2027 and $2.5 million thereafter. These numbers include interest of $2.7 million.

Our non-cancelable financing lease arrangements relate to software and computer equipment and have various expiration dates through October 2023. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of November 30, 2022 were: $0.1 million for December 1, 2022 through February 28, 2023 and $2.0 million for fiscal 2024. These numbers include interest of $0.1 million.

Critical Accounting Policies and Estimates

~~This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited~~Our condensed consolidated financial statements ~~which~~ have been prepared in accordance with U.S. GAAP. ~~The preparation~~Preparation of ~~these~~the financial statements requires usmanagement to make judgments, estimates and ~~judgments~~assumptions that ~~affect~~impact the reported ~~amounts~~amount of ~~assets, liabilities, revenues~~revenue and expenses, assets and liabilities and the disclosure of contingent assets and ~~liabilities~~liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our condensed consolidated financial statements. Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there2022 Form 10-K.

There have been no ~~significant~~ changes into our critical accounting policies ~~as discussed~~and estimates during the three and nine months ended November 30, 2022 from those previously disclosed in~~the Form 8-K~~ Part II, Item 7, Management's Discussion and ~~the final prospectus filed by us with the SEC on May 4, 2020~~Analysis of Financial Condition and ~~April 27, 2020, respectively.~~Results of Operations in our 2022 Annual Report.

~~Off-Balance Sheet Arrangements~~Recent Accounting Pronouncements

~~As of March 31, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K~~Recently issued and ~~did not have any commitments or contractual obligations.~~

~~JOBS Act~~

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revisedadopted accounting pronouncements ~~based on~~are described in Note 2, Accounting Standards to the ~~effective date for private (not publicly traded) companies. We are electing~~Notes to ~~delay~~ the ~~adoption of new or revised accounting standards,~~Unaudited Condensed Consolidated Financial Statements.

Item 3. Quantitative and ~~as a result, we may not comply with new or revised accounting standards on~~Qualitative Disclosures About Market Risk.

There have been no material changes in the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on~~market risks during the ~~Company’s financial statements.~~

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

~~As of March 31, 2020, we were not subject to any market or interest rate risk. Following the consummation~~ three and nine months ended November 30, 2022 from those previously disclosed in Part II, Item 7A., Quantitative and Qualitative Disclosures About Market Risk of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, were invested in U.S. government treasury bills, notes or bonds or in certain money market funds that invest solely in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.2022 Form 10-K.

Item 4. Controls and Procedures.

~~We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.~~

~~Item 4.~~

~~Controls and Procedures~~

~~Evaluation of~~ Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of ourWe have disclosure controls and procedures ~~as of the end of the fiscal quarter ended March 31, 2020, as such term is defined~~ in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer has concluded that during the period covered by this report, our disclosure controls and procedures were effective.

~~Disclosure controls and procedures are designed~~place to ensure that information required to be disclosed ~~by us~~ in our reports filed or submitted under the Securities and Exchange Act ~~reports~~of 1934, as amended (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~SEC's rules and ~~forms,~~forms. These controls and ~~that such information is~~procedures are accumulated and communicated to ~~our~~ management, including our ~~principal executive officer~~Chief Executive Officer and ~~principal financial officer or persons performing similar functions, as appropriate~~Chief Financial Officer, to allow timely decisions regarding required disclosure.

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

Changes in Internal Control over Financial Reporting

There ~~was no change~~have not been any changes in our internal ~~control~~controls over financial reporting ~~that occurred~~ during the ~~fiscal~~ quarter ended ~~March 31, 2020 covered by this Quarterly Report on Form 10-Q~~November 30, 2022 that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting. We review our disclosure controls and procedures, which may include internal controls over financial reporting, on an ongoing basis. From time to time, management makes changes to enhance the effectiveness of these controls and ensure that they continue to meet the needs of our business over time.

PART II—~~OTHER INFORMATION~~Other Information

~~Item 1.~~

~~Legal Proceedings~~

Item 1. Legal Proceedings.

~~None.~~

~~Item 1A.~~

~~Risk Factors~~

AsFrom time to time, we are subject to contingencies that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the ~~date~~loss can be reasonably estimated. We do not currently believe the resolution of ~~this Quarterly Report on Form 10-Q, there~~any such contingencies will have a material adverse effect upon our Unaudited Condensed Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.

Item 1A. Risk Factors.

There have been no material changes toin our risk factors during the three and nine months ended November 30, 2022 from those previously disclosed in Part I, Item 1A., Risk Factors of our 2022 Form 10-K. You should carefully consider the risk factors ~~disclosed~~discussed in our ~~final prospectus filed with the SEC on April 27, 2020.~~2022 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.

~~Item 2.~~

Item 2. Unregistered Sales of Equity Securities and ~~Use of Proceeds from Registered Securities~~

~~Unregistered Sales~~

On January 16, 2020, we issued to our sponsor an aggregate of 2,875,000 founder shares in exchange for a payment of $25,000 for offering costs made by the sponsor on behalf of the company or approximately $0.009 per share. On March 6, 2020, we effected a share capitalization resulting in our sponsor holding an aggregate of 13,625,000 founder shares. On March 6, 2020, our sponsor transferred 50,000 founder shares to each of Keith W. Abell and Eva F. Huston, our independent director nominees. On April 23, 2020, we effected a share capitalization resulting in an aggregate of 15,350,000 founder shares issued and outstanding. Such securities were issued in connection with the Company’s organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

On April 23, 2020, the Sponsor purchased 10,280,000 Private Placement Warrants, each exercisable to purchase one ordinary share at $11.50 per share, at a price of $1.00 per warrant ($10,280,000 in the aggregate), in a private placement that closed simultaneously with the closing of the Initial Public Offering. This issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

~~No underwriting discounts or commissions were paid with respect to such sales.~~

Use of Proceeds

~~In connection with~~On January 20, 2022, the ~~Initial Public Offering, we incurred offering costs~~board of ~~approximately $24.53~~directors approved a $100.0 million ~~($14.49 million~~share repurchase program (2022 Share Repurchase Program). Stock repurchases may be made from time to time in ~~deferred underwriting commissions~~the open market, in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. The 2022 Share Repurchase Program is subject to market conditions and ~~approximately $0.9 million in deferred legal fees). Other incurred offering costs consisted principally preparation fees related~~other factors and does not obligate us to ~~the Initial Public Offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which~~repurchase any dollar amount ~~will be payable upon consummation~~or number of ~~the Initial Business Combination, if consummated)~~our Class A Common Stock and the ~~Initial Public Offering expenses, $414.0 million~~program may be extended, modified, suspended or discontinued at any time, without prior notice.

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

Item 6. Exhibits.

Furnish the ~~net proceeds from our Initial Public Offering and certain~~exhibits required by Item 601 of ~~the proceeds from the private placement~~Regulation S-K (§ 229.601 of the Private Placement Warrants (or $10.00 per Unit sold in the Initial Public Offering) was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the sale of the Private Placement Warrants are held in the Trust Account and invested as described elsewhere in this ~~Quarterly Report on Form 10-Q.~~

There has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus related to the Initial Public Offering.

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

chapter).

~~Item 4.~~

~~Mine Safety Disclosures~~

~~None.~~

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Item 6.~~

~~Exhibits.~~

~~Exhibit~~ ~~Number~~		~~Description~~
Exhibit Number		Description
31.1* 3.1		Certificate of Incorporation of the E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.2 of E2open Parent Holdings, Inc.'s Form 8-K (File No. 001-39272) filed with the SEC on February 10, 2021).
3.2		Amendment to the Certificate of Incorporation of E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.3 of E2open Parent Holdings, Inc.'s Form S-1 (File No. 333-259562) filed with the SEC on September 15, 2021).
3.3		Bylaws of the E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.3 of E2open Parent Holdings, Inc.'s Form 8-K (File 001-39272) filed with the SEC of February 10, 2021).
31.1*		Certification of Chief 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.
31.2*
31.2*		Certification of Chief 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.
32.1*
32.1*		Certification of ~~Principal~~Chief Executive Officer ~~Pursuant to 18 U.S.C. Section 1350, as adopted~~ Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.2*
32.2*		Certification of Chief Financial Officer ~~Pursuant to 18 U.S.C. Section 1350, as adopted~~ Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
101.INS
~~101.INS~~		Inline XBRL Instance Document
101.SCH
~~101.SCH~~		Inline XBRL Taxonomy Extension Schema Document
101.CAL
~~101.CAL~~		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
~~101.DEF~~		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
~~101.LAB~~		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
~~101.PRE~~		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File

These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

* Filed herewith.

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

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 ~~hereunto~~thereunto duly authorized.

~~Date: June 5, 2020~~	~~By:~~	~~/s/ Chinh E. Chu~~
	~~Name:~~	~~Chinh E. Chu~~ E2open Parent Holdings, Inc.
	~~Title:~~
Date: January 9, 2023		By:	/s/ Michael A. Farlekas
			Michael A. Farlekas
			Chief Executive Officer

Date: January 9, 2023		By:	/s/ Marje Armstrong
			Marje Armstrong
			Chief Financial Officer

~~200 Park Avenue, 58th Floor~~ ~~New York, New York~~
9600 Great Hills Trail, Suite 300E Austin, TX	78759
(Address of principal executive offices)	(Zip Code)


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

~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange~~ ~~on which registered~~
~~Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-third of one redeemable warrant~~	~~PCPL.U~~	~~The New York Stock Exchange~~
~~Class A Ordinary Shares included as part of the units~~	~~PCPL~~	~~The New York Stock Exchange~~
~~Warrants included as part of the units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50~~	~~PCPL WS~~	~~The New York Stock Exchange~~

	21
Abbreviation		Term
~~Item 4.~~ ASC	~~Mine Safety Disclosures~~	21 Accounting Standards Codification

~~Item 5.~~ BluJay	~~Other Information~~	21 BluJay TopCo Limited, a private limited liability company registered in England and Wales which owns BluJay Solutions, a cloud-based logistics execution platform company

~~Item 6.~~ BluJay Sellers	~~Exhibits~~	21 BluJay and its subsidiaries

~~SIGNATURES~~ CC Capital	24	CC NB Sponsor 1 Holdings LLC

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

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

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

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

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

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

Investor Rights Agreement		agreement amended and restated on September 1, 2021 providing Insight Partners, CC Capital, Francisco Partners and Temasek the right to nominate members to the board of directors and requires parties to vote in favor of director nominees recommended by the board of directors.

LIBOR		London Interbank Offered Rate

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

nm		not meaningful

NYSE		New York Stock Exchange

PIPE		private investment in public equity; financing from institutional investors

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

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

SCM		omni-channel and supply chain management

SEC		U.S. Securities and Exchange Commission

Temasek		Temasek Holdings (Private) Limited

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

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

Assets
Deferred offering costs associated with initial public offering	$	1,326,975
Total Assets	$	1,326,975

Liabilities and Shareholders' Equity
Current liabilities:
Accrued expenses	$	464,150
Accounts payable		49,284
Note payable-related party		53,649
Total current liabilities		567,083
Deferred legal fees		757,669
Total Liabilities		1,324,752

Commitments and Contingencies

Shareholders' Equity:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		-
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding		-
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 15,350,000 shares issued and outstanding (1)(2)		1,535
Additional paid-in capital		23,465
Accumulated deficit		(22,777	)
Total Shareholders' Equity		2,223
Total Liabilities and Shareholders' Equity	$	1,326,975

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

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


Large accelerated filer	¨	☒	Accelerated filer	¨	☐

Non-accelerated filer	x	☐	Smaller reporting company	x	☐

Emerging growth company	x	☐

		~~Page No.~~
~~PART I. FINANCIAL INFORMATION~~		Page
Glossary		3
~~Item 1.~~Forward-Looking Statements		~~Financial Statements~~	1 4
PART I.		5
Item 1.	~~Unaudited Condensed Balance Sheet as of March 31, 2020~~Financial Statements (Unaudited)	1 5
	Condensed Consolidated Balance Sheets	5
	~~Unaudited~~ Condensed ~~Statement~~Consolidated Statements of Operations ~~for the period from January 14, 2020 (inception) through March 31, 2020~~	2 6
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	~~Unaudited~~ Condensed ~~Statement~~Consolidated Statements of ~~Changes in Shareholders’~~Stockholders' Equity ~~for the period from January 14, 2020 (inception) through March 31, 2020~~	3 8

	~~Unaudited~~ Condensed ~~Statement~~Consolidated Statements of Cash Flows ~~for the period from January 14, 2020 (inception) through March 31, 2020~~	4 10

	Notes to Unaudited Condensed Consolidated Financial Statements	5 11

Item 2.	~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations	15 36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19 55

Item 4.	Controls and Procedures	19 55
PART II.	Other Information	56
~~PART II. OTHER INFORMATION~~ Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
~~Item 1.~~	~~Legal Proceedings~~	20

~~Item 1A.~~	~~Risk Factors~~	20

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20 56
Item 6.	Exhibits	56
~~Item 3.~~Signatures		~~Defaults Upon Senior Securities~~ 57


(In thousands, except share amounts)	November 30, 2022			February 28, 2022
	(Unaudited)
Assets
Cash and cash equivalents	$	85,688		$	155,481
Restricted cash		13,130			19,073
Accounts receivable - net of allowance of $5,003 and $3,055 as of November 30, 2022 and February 28, 2022, respectively		149,457			155,341
Prepaid expenses and other current assets		26,461			26,243
Total current assets		274,736			356,138
Goodwill		3,306,233			3,756,871
Intangible assets, net		1,095,762			1,181,390
Property and equipment, net		73,104			65,937
Operating lease right-of-use assets		21,022			28,102
Other noncurrent assets		21,525			17,017
Total assets	$	4,792,382		$	5,405,455
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	111,202		$	128,544
Channel client deposits payable		13,130			19,073
Deferred revenue		173,580			190,992
Payable to Logistyx sellers		1,068			—
Current portion of notes payable		20,962			89,097
Current portion of operating lease obligations		8,093			7,652
Current portion of financing lease obligations		2,002			2,307
Income taxes payable		9,768			2,702
Total current liabilities		339,805			440,367
Long-term deferred revenue		2,400			1,141
Operating lease obligations		17,462			21,202
Financing lease obligations		—			1,950
Notes payable		1,042,459			863,577
Tax receivable agreement liability		58,176			66,590
Warrant liability		30,375			67,139
Contingent consideration		27,808			45,568
Deferred taxes		255,207			413,038
Other noncurrent liabilities		973			712
Total liabilities		1,774,665			1,921,284
Commitments and Contingencies (Note 27)
Stockholders' Equity
Class A common stock; $0.0001 par value, 2,500,000,000 shares authorized; 302,452,552 and 301,536,621 issued and 302,275,898 and 301,359,967 outstanding as of November 30, 2022 and February 28, 2022, respectively		30			31
Class V common stock; $0.0001 par value; 42,747,890 shares authorized; 33,092,007 and 33,560,839 issued and outstanding as of November 30, 2022 and February 28, 2022, respectively		—			—
Series B-1 common stock; $0.0001 par value; 9,000,000 shares authorized; 94 shares issued and outstanding		—			—
Series B-2 common stock; $0.0001 par value; 4,000,000 shares authorized; 3,372,184 issued and outstanding		—			—
Additional paid-in capital		3,374,388			3,362,219
Accumulated other comprehensive loss		(77,732	)		(19,019	)
Accumulated deficit		(530,215	)		(154,976	)
Treasury stock, at cost: 176,654 shares		(2,473	)		(2,473	)
Total E2open Parent Holdings, Inc. equity		2,763,998			3,185,782
Noncontrolling interest		253,719			298,389
Total stockholders' equity		3,017,717			3,484,171
Total liabilities and stockholders' equity	$	4,792,382		$	5,405,455


	Three Months Ended November 30,						Nine Months Ended November 30,
(In thousands, except per share amounts)	2022			2021			2022			2021
Revenue
Subscriptions	$	134,884		$	106,969		$	396,052		$	219,728
Professional services and other		30,009			30,033			89,898			61,680
Total revenue		164,893			137,002			485,950			281,408
Cost of Revenue
Subscriptions		35,931			30,163			105,367			62,917
Professional services and other		20,417			17,587			63,446			38,694
Amortization of acquired intangible assets		24,402			25,036			73,869			48,885
Total cost of revenue		80,750			72,786			242,682			150,496
Gross Profit		84,143			64,216			243,268			130,912
Operating Expenses
Research and development		24,939			25,000			73,088			56,909
Sales and marketing		20,448			18,101			67,348			41,789
General and administrative		23,073			22,871			66,774			49,989
Acquisition-related expenses		1,969			33,216			14,313			50,168
Amortization of acquired intangible assets		19,965			19,470			62,523			26,843
Goodwill impairment		—			—			514,816			—
Total operating expenses		90,394			118,658			798,862			225,698
Loss from operations		(6,251	)		(54,442	)		(555,594	)		(94,786	)
Other income (expense)
Interest and other expense, net		(21,270	)		(10,769	)		(54,732	)		(22,004	)
Gain (loss) from change in tax receivable agreement liability		2,697			(1,470	)		9,089			(4,606	)
Gain (loss) from change in fair value of warrant liability		16,150			(7,232	)		36,764			(48,448	)
Gain (loss) from change in fair value of contingent consideration		6,300			(1,140	)		17,760			(91,180	)
Total other income (expense)		3,877			(20,611	)		8,881			(166,238	)
Loss before income tax provision		(2,374	)		(75,053	)		(546,713	)		(261,024	)
Income tax benefit		7,877			10,764			130,010			3,392
Net income (loss)		5,503			(64,289	)		(416,703	)		(257,632	)
Less: Net income (loss) attributable to noncontrolling interest		698			(5,072	)		(41,464	)		(35,640	)
Net income (loss) attributable to E2open Parent Holdings, Inc.	$	4,805		$	(59,217	)	$	(375,239	)	$	(221,992	)

Weighted average common shares outstanding:
Basic		302,201			308,132			301,822			227,186
Diluted		302,359			308,132			301,822			227,186
Net income (loss) attributable to E2open Parent Holdings, Inc. common shareholders per share:
Basic	$	0.02		$	(0.19	)	$	(1.24	)	$	(0.98	)
Diluted	$	0.02		$	(0.19	)	$	(1.24	)	$	(0.98	)

General and administrative expenses	$	22,777
Net loss	$	(22,777	)

Weighted average shares outstanding, basic and diluted⁽¹⁾⁽²⁾		15,350,000

Basic and diluted net loss per share	$	(0.00	)

	Ordinary Shares								Additional					Total
	Class A				Class B				Paid-in		Accumulated			Shareholders'
		Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance - January 14, 2020 (Inception)		-	$	-		-	$	-	$	-	$	-		$	-
Issuance of Class B ordinary shares to Sponsor⁽¹⁾⁽²⁾		-		-		15,350,000		1,535		23,465		-			25,000
Net loss		-		-		-		-		-		(22,777	)		(22,777	)
Balance - March 31, 2020 (unaudited)		-	$	-		15,350,000	$	1,535	$	23,465	$	(22,777	)	$	2,223

Cash Flows from Operating Activities:
Net loss	$	(22,777	)
Adjustments to reconcile net income to net cash used in operating activities:
General and administrative expenses paid by Sponsor pursuant to note payable		8,868
Changes in operating assets and liabilities:
Accounts payable		13,909
Net cash used in operating activities		-

Net increase in cash		-

Cash - beginning of the period		-
Cash - ending of the period	$	-

Supplemental disclosure of noncash investing and financing activities:
Deferred offering costs issued in exchange of Class B ordinary shares to Sponsor	$	25,000
Deferred offering costs included in accrued expenses	$	464,150
Deferred offering costs included in accounts payable	$	35,375
Deferred offering costs included in note payable	$	44,781
Deferred legal fees associated with initial public offering	$	757,669


(In thousands)	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings (Accumulated Deficit)			Treasury Stock			Total E2open Equity			Noncontrolling Interest			Total Equity
Balance, February 28, 2021	$	19	$	2,071,206		$	2,388		$	10,800		$	—		$	2,084,413		$	392,945		$	2,477,358
Share-based compensation		—		2,043			—			—			—			2,043			—			2,043
Other comprehensive income		—		—			1,475			—			—			1,475			—			1,475
Net loss		—		—			—			(142,258	)		—			(142,258	)		(27,097	)		(169,355	)
Balance, May 31, 2021		19		2,073,249			3,863			(131,458	)		—			1,945,673			365,848			2,311,521
Share-based compensation		—		2,509			—			—			—			2,509			—			2,509
Business Combination purchase price adjustment		—		1,666			—			—			—			1,666			1,299			2,965
Conversion of Common Units to common stock		—		27,228			—			—			—			27,228			(43,995	)		(16,767	)
Conversion of Series B-1 shares to common stock		1		174,999			—			—			(2,473	)		172,527			—			172,527
Impact of Common Unit conversions on Tax Receivable Agreement, net of tax		—		(7,512	)		—			—			—			(7,512	)		—			(7,512	)
Other comprehensive loss		—		—			(6,523	)		—			—			(6,523	)		—			(6,523	)
Net loss		—		—			—			(20,517	)		—			(20,517	)		(3,471	)		(23,988	)
Balance, August 31, 2021		20		2,272,139			(2,660	)		(151,975	)		(2,473	)		2,115,051			319,681			2,434,732
Share-based compensation		—		3,982			—			—			—			3,982			—			3,982
Issuance of common stock for BluJay Acquisition		7		730,847			—			—			—			730,854			—			730,854
Issuance of common stock for BluJay Acquisition PIPE financing, net of offering costs		3		292,897			—			—			—			292,900			—			292,900
Conversion of Common Units to common stock		—		14,498			—			—			—			14,498			(14,498	)		—
Exercise of warrants		—		1			—			—			—			1			—			1
Deferred taxes related to issuance of common stock for BluJay Acquisition		—		36,805			—			—			—			36,805			—			36,805
Impact of Common Unit conversions on Tax Receivable Agreement, net of tax		—		(2,563	)		—			—			—			(2,563	)		—			(2,563	)
Other comprehensive loss		—		—			(25,617	)		—			—			(25,617	)		—			(25,617	)
Net loss		—		—			—			(59,217	)		—			(59,217	)		(5,072	)		(64,289	)
Balance, November 30, 2021	$	30	$	3,348,606		$	(28,277	)	$	(211,192	)	$	(2,473	)	$	3,106,694		$	300,111		$	3,406,805