PART I - FINANCIAL INFORMATION

Item 1. ~~Interim~~ Financial Statements

GTY TECHNOLOGY HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands)
~~CONDENSED BALANCE SHEETS~~

March 31,

December 31,



2021

2020
Assets




Current assets:




Cash and cash equivalents

$

17,936

$
22,800
Accounts receivable, net

10,752

9,994
Prepaid expenses and other current assets

3,855

2,583
Total current assets

32,543

35,377

Property and equipment, net

3,651

3,891
Finance lease right of use assets

1,330

1,355
Operating lease right of use assets

2,539

2,610
Intangible assets, net

97,508

101,107
Goodwill

284,635

284,635
Other assets

3,736

3,472
Total assets

$

425,942

$
432,447

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

5,556

$
6,366
Deferred revenue - current portion

23,345

22,304
Finance lease liability - current portion

580

581
Operating lease liability - current portion

1,133

1,316
Contingent consideration - current portion

729

743
Total current liabilities

31,343

31,310

Deferred revenue - less current portion

2,236

1,602
Warrant liability

7,078

3,040
Deferred tax liability

17,144

17,494
Contingent consideration - less current portion

43,630

42,530
Term loans, net

26,694

26,632
Finance lease liability - less current portion

5

147
Operating lease liability - less current portion

2,916

2,927
Total liabilities

131,046

125,682

Commitments and contingencies

Shareholders’ equity:

Common stock

6

6
Exchangeable shares

50,637

54,224
Additional paid in capital

393,082

380,881
Accumulated other comprehensive income

261

6
Treasury stock

(8,343)

(5,633)
Accumulated deficit

(140,747)

(122,719)
Total shareholders' equity

294,896

306,765
Total liabilities and shareholders’ equity

$

425,942

$
432,447
September 30, 2017 December 31, 2016
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 667,163 $ 1,219,822
Prepaid expenses 52,118 21,164
Total current assets 719,281 1,240,986

Cash and cash equivalents held in Trust Account 555,402,459 552,263,774
Total Assets $ 556,121,740 $ 553,504,760

Liabilities and Shareholders' Equity
Accounts payable and accrued expenses $ 25,913 $ 68,739
Accrued expenses - related party 110,000 20,000
Total current liabilities 135,913 88,739
Deferred underwriting fees 19,320,000 19,320,000
Total Liabilities 19,455,913 19,408,739

Commitments
Class A ordinary shares subject to possible redemption, $0.0001 par value; 53,166,582 and 52,909,602 shares at redemption value at September 30, 2017 and December 31, 2016, respectively 531,665,820 529,096,020

Shareholders' Equity:
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding - -
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 2,033,418 and 2,290,398 shares issued and outstanding (excluding 53,166,582 and 52,909,602 shares subject to possible redemption) at September 30, 2017 and December 31, 2016, respectively 203 229
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 13,800,000 and 13,800,000 shares issued and outstanding at September 30 and December 31, 2016, respectively 1,380 1,380
Additional paid-in capital 2,364,674 4,934,449
Retained earnings 2,633,750 63,943
Total Shareholders' Equity 5,000,007 5,000,001
Total Liabilities and Shareholders' Equity $ 556,121,740 $ 553,504,760

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

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GTY TECHNOLOGY HOLDINGS INC.

CONDENSED ~~INTERIM~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
~~(Unaudited)~~(Amounts in thousands, except per share amounts)

Three Months Ended

Three Months Ended

March 31,

March 31,


2021

2020


Revenues

$
13,259

$
11,276

Cost of revenues

4,742

4,527

Gross Profit

8,517

6,749

Operating expenses

Sales and marketing

3,762

4,854

General and administrative

5,193

7,449

Research and development

2,985

3,798

Amortization of intangible assets

3,599

3,673

Restructuring charges

—

3,466

Change in fair value of contingent consideration

1,114

29

Total operating expenses

16,653

23,269

Loss from operations

(8,136)

(16,520)

Other income (expense)

Interest expense, net

(859)

(236)

Loss from repurchase/issuance of shares

(5,333)

(2,056)

Change in fair value of warrant liability

(4,038)

(1,563)

Other income, net

168

499

Total other income (expense), net

(10,062)

(3,356)

Loss before income taxes

(18,198)

(19,876)

Benefit from income taxes

170

2,521

Net loss

(18,028)

(17,355)

Net loss per share, basic and diluted

$
(0.32)

$
(0.33)

Weighted average common shares outstanding, basic and diluted

55,828

52,575

Net loss

$
(18,028)

$
(17,355)

Other comprehensive gain:

Foreign currency translation gain

255

2,049

Total other comprehensive gain

255

2,049

Comprehensive loss

$
(17,773)

$
(15,306)

For the Three Months Ended For the Nine Months Ended, For the Period from August 11, 2016 (Inception) through
September 30, 2017 September 30, 2017 September 30, 2016
General and administrative expenses $ 143,531 $ 569,237 $ 16,684
Loss from operations (143,531 ) (569,237 ) (16,684 )
Interest income 1,426,226 3,139,044 -
Net income (loss) $ 1,282,695 $ 2,569,807 $ (16,684 )

Weighted average shares outstanding
Basic^{(1) (2)} 15,960,293 16,033,767 12,000,000
Diluted⁽²⁾ 69,000,000 69,000,000 12,000,000

Net earnings (loss) per share
Basic $ 0.08 $ 0.16 $ (0.00 )
Diluted $ 0.02 $ 0.04 $ (0.00 )
~~(1) This number excludes an aggregate of up to 53,166,582 Class A ordinary shares subject to possible redemption at September 30, 2017.~~
(2) This number has been retroactively restated to reflect the share capitalization of 2,875,000 shares on October 14, 2016 and the share capitalization of 2,300,000 shares on October 26, 2016 (see Note 4) and excludes an aggregate of up to 1,800,000 Class B ordinary shares subject to surrender for no consideration if the over-allotment option was not exercised in full by the underwriters.  On November 1, 2016, the underwriters exercised their over-allotment option, thus, these Class B ordinary shares were not forfeited.

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

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GTY TECHNOLOGY HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(Amounts in thousands, except share amounts)
~~CONDENSED INTERIM STATEMENT OF CASH FLOWS~~
~~(Unaudited)~~Three Months Ended March 31, 2021

Accumulated

Additional

Other

Total

Common Stock

Exchangeable Shares

Paid in

Treasury

Accumulated

Comprehensive

Shareholders’


Shares

Amount

Shares

Amount

Capital

Stock

Deficit

Income

Equity
Balance - December 31, 2020

55,570,282

$
6

5,972,779

$
54,224

$
390,232

$
(5,633)

$
(129,030)

$
6

$
309,805
Adjustment for correction of an error - warrant liability

—

—

—

—

(9,351)

—

6,311

—

(3,040)
Balance - December 31, 2020, as adjusted

55,570,282

6

5,972,779

54,224

380,881

(5,633)

(122,719)

6

306,765
Net loss

—

—

—

—

—

—

(18,028)

—

(18,028)
Foreign currency translation gain

—

—

—

—

—

—

—

255

255
Share-based compensation

—

—

—

—

1,823

—

—

—

1,823
Issuance of common stock

935,633

—

—

—

6,790

—

—

—

6,790
Common stock repurchases

(525,060)

—

—

—

—

(2,710)

—

—

(2,710)
Common stock issued for exchangeable shares

358,658

—

(358,658)

(3,587)

3,587

—

—

—

—
Vested and issued restricted stock units

1,095,689

—

—

—

—

—

—

—

—
Stock option exercises

792

—

—

—

1

—

—

—

1
Balance - March 31, 2021

57,435,994

$
6

5,614,121

$
50,637

$
393,082

$
(8,343)

$
(140,747)

$
261

$
294,896

Three Months Ended March 31, 2020

For the Nine Months Ended September 30, 2017 For the Period from August 11, 2016 (Inception) through September 30, 2016
Cash Flows from Operating Activities
Net income (loss) $ 2,569,807 $ (16,684 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Formation and operating costs paid by Sponsor - 5,726
Interest earned on cash and cash equivalents held in Trust Account (3,138,686 ) -
Changes in operating assets and liabilities:
Prepaid expenses (30,954 ) -
Accounts payable (42,826 ) 10,958
Accrued expenses - related party 90,000 -
Net cash used in operating activities (552,659 ) -

Net change in cash and cash equivalents (552,659 ) -

Cash and cash equivalents- beginning of the period 1,219,822 -
Cash and cash equivalents - ending of the period $ 667,163 $ -

Supplemental disclosure of noncash investing and financing activities:
Change in value of Class A ordinary shares subject to possible redemption $ 2,569,800 $ -
Formation and offering costs paid by Sponsor in exchange for founder shares $ - $ 25,000
Deferred offering costs included in accounts payable and accrued expenses $ - $ 67,845
Deferred offering costs paid by Sponsor $ - $ 91,992

Accumulated

Additional

Other

Total

Common Stock

Exchangeable Shares

Paid in

Treasury

Accumulated

Comprehensive

Shareholders’


Shares

Amount

Shares

Amount

Capital

Stock

Deficit

Income

Equity
Balance - December 31, 2019

52,303,862

$
5

5,568,096

$
45,681

$
340,625

$
(5,174)

(71,460)

$
370

$
310,047
Adjustment for correction of an error - warrant liability

—

—

—

—

(9,351)

—

4,180

—

(5,171)
Balance - December 31, 2019, as adjusted

52,303,862

5

5,568,096

45,681

331,274

(5,174)

(67,280)

370

304,876
Net loss

—

—

—

—

—

—

(17,355)

—

(17,355)
Foreign currency translation gain

—

—

—

—

—

—

—

2,049

2,049
Share-based compensation

—

—

—

—

3,295

—

—

—

3,295
Share redemption (incremental shares issued)

334,254

—

—

—

2,056

—

—

—

2,056
Shares issued for contingent consideration

—

—

550,388

10,000

—

—

—

—

10,000
Vested and issued restricted stock units

31,250

—

—

—

—

—

—

—

—
Stock option exercises

3,699

—

—

—

4

—

—

—

4
Exchangeable shares converted to common stock

246,097

—

(246,097)

(2,461)

2,461

—

—

—

—
Balance - March 31, 2020

52,919,162

$
5

5,872,387

$
53,220

$
339,090

$
(5,174)

$
(84,635)

$
2,419

$
304,925

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

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GTY TECHNOLOGY HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)

Three Months Ended

Three Months Ended

March 31,

March 31,


2021

2020

Cash flows from operating activities:





Net loss

$
(18,028)

$
(17,355)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property and equipment

253

54

Amortization of intangible assets

3,599

3,673

Amortization of right of use assets

279

431

Share-based compensation

1,823

3,295

Deferred income tax benefit

(170)

(2,521)

Loss on issuance/repurchase of shares

5,333

2,056

Change in fair value of warrant liability

4,038

1,563

Amortization of deferred debt issuance costs

172

66

Accrual of paid in kind interest

130

—

Gain on extinguishment of debt

(239)

—

Bad debt expense

5

69

Loss on disposal of fixed assets

24

—

Change in fair value of contingent consideration

1,114

29

Changes in operating assets and liabilities:

Accounts receivable

(789)

522

Prepaid expenses and other assets

(1,536)

(1,122)

Accounts payable and accrued liabilities

(813)

(546)

Deferred revenue and other liabilities

1,747

(42)

Operating lease liabilities

(348)

(441)

Net cash used in operating activities

(3,406)

(10,269)





Cash flows from investing activities:





Capital expenditures

(31)

(1,111)

Net cash used in investing activities

(31)

(1,111)



Cash flows from financing activities:





Proceeds from borrowings, net of issuance costs

—

11,476

Contingent consideration payments

(28)

(27)

Stock options exercises

1

4

Common stock repurchases

(8,043)

—

Proceeds from issuance of common stock, net of costs

6,790

—

Proceeds from disposal of fixed assets

6

—

Repayments of finance lease liabilities

(144)

(136)

Net cash provided by (used in) financing activities

(1,418)

11,317





Effect of foreign currency on cash

(9)

(195)

Net change in cash and cash equivalents

(4,864)

(258)

Cash and cash equivalents, beginning of period

22,800

8,374

Cash and cash equivalents, end of period

$
17,936

$
8,116





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

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GTY TECHNOLOGY HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

SUPPLEMENTAL CASH FLOWS DISCLOSURE

(Amounts in thousands)

Three Months Ended

Three Months Ended

March 31,

March 31,

2021

2020

Supplemental disclosure of cash flow information:

Cash paid for interest

$
510

$
—

Cash paid for income taxes

$
—

$
—

Noncash Investing and Financing Activities:

Exchangeable shares issued for contingent consideration

$
—

$
10,000

Share redemption (incremental shares issued)

$
—

$
2,056

Purchases of property and equipment included in accounts payable

$
—

$
382

Exchangeable shares converted to common stock

$
3,587

$
2,461

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

Table of Contents

NOTES TO CONDENSED ~~INTERIM (UNAUDITED) FINANCIAL~~CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Note 1. Organization and Business Operations
GTY Technology Holdings Inc. ~~(the~~and its subsidiaries (“GTY” or the “Company”) offers a cloud-based suite of solutions primarily for North American state and local governments. GTY’s cloud-based suite of solutions for state and local governments addresses functions in procurement, payments, grant management, budgeting and permitting.
The Company is ~~blank check company~~headquartered in Las Vegas, Nevada and has other offices in the United States and Canada. The following is a brief description of the Company’s primary subsidiaries and their businesses.
Bonfire, a Procurement Business
Bonfire Interactive Ltd. was incorporated on March 5, 2012 under the laws of the Province of Ontario and its wholly owned subsidiary, Bonfire Interactive US Ltd., was incorporated in the ~~Cayman Islands~~United States on ~~August 11, 2016.~~January 8, 2018 (collectively, “Bonfire” or “Procurement”). Bonfire is a provider of strategic sourcing and procurement software, serving customers in government, the broader public sector, and various highly regulated commercial vertical markets. Bonfire offers customers and their sourcing professionals a modern software-as-a-service (“SaaS”) application that helps find, engage, evaluate, negotiate and award vendor and supplier contracts. Bonfire delivers workflow automation, data collection and analysis, and collaboration to drive cost savings, compliance, and strategic outcomes. All of Bonfire’s applications are delivered as a SaaS offering, and Bonfire offers implementation and premium support services.
CityBase, a Payments Business
CityBase, Inc. (“CityBase” or “Payments”), a Delaware corporation headquartered in Chicago, provides dynamic content, digital services, and integrated payments via a SaaS platform that includes technological functionality accessible via web and mobile, kiosk, point-of-sale, and other channels. CityBase software integrates its platform to underlying systems of record, billing, and other source systems, and configures payments and digital services to meet the requirements of its customers, which include government agencies and utility companies.
eCivis, a Grants Management Business
eCivis, Inc. (“eCivis” or “Grants Management”), a Delaware corporation headquartered in Los Angeles, California, is a leading SaaS provider of grants management and indirect cost reimbursement solutions that enable its customers to standardize and streamline complex grant processes in a fully integrated platform. The ~~Company was formed~~eCivis platform consists of four core cloud-based products, including grants research, grants management, sub-recipient management, and cost allocation and recovery. To assist its customers in the implementation of its cloud-based products, eCivis offers one-time implementation services, including data integration, grants migration and change management. Additionally, eCivis provides ongoing grants management training, cost allocation plan consulting and cost recovery services.

Open Counter, a Permitting Business
Open Counter Enterprises Inc. (“Open Counter” or “Permitting”), a Delaware corporation headquartered in Boston, Massachusetts, is a developer and provider of software tools for cities to streamline permitting and licensing services for municipal governments. Open Counter provides customers with software through a hosted platform and provides professional services related to software implementation.
Questica, a Budget Business
Questica Software Inc., Questica USCDN Inc. and its wholly-owned subsidiary Questica Ltd. (collectively, “Questica”) design and develop budgeting software that supports 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 on the technology industry, including software and services.
~~All activities through September 30, 2017 relates to the Company’s formation and the initial public offering (the “initial public offering”) and, since the closing~~unique requirements of the ~~initial~~ public ~~offering,~~sector. The Questica suite of products are part of a ~~search for a business combination candidate described below. The Company is~~comprehensive web-based budgeting preparation, performance, management and data visualization solution that enables public sector and non-profit organizations to improve and shorten their budgeting cycles.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Questica Software Inc. was organized in 1998 as an ~~emerging growth company~~Ontario corporation, maintains two offices located in Burlington, Ontario, Canada and serves the healthcare, K-12, higher education and local government verticals primarily in North America. Questica USCDN was organized in 2017 as ~~such,~~an Ontario corporation and Questica Ltd. was incorporated in 2017 in the ~~Company is subject to all of the risks associated with emerging growth companies.~~

The registration statement for the Company’s initial public offering was declared effective on October 26, 2016. The Company consummated the initial public offering of 55,200,000 units, including the issuance of 7,200,000 unitsUnited States as a ~~result~~Delaware corporation. Questica Ltd. is located in Huntington Beach, California, primarily serving the non-profit market and services a limited number of ~~the underwriters’ exercise of their over-allotment option in full (“units” and, with respect to the Class A ordinary shares included~~customers in the ~~units being offered,~~public and private sector. The majority of Questica Ltd.’s customers are located in the ~~“public shares”~~United States and Canada, with some customers located in the United Kingdom and Africa, among other countries.

Sherpa, a Budget Business

Sherpa Government Solutions LLC (“Sherpa” and, collectively with Questica, “Budget”) at $10.00 per unit on November 1, 2016, generating gross proceeds of $552 million. The Company incurred offering costs of approximately $31 million, inclusive of approximately $30.4 million of underwriting fees. The Company paid $11.04 million of underwriting fees upon the closing of the initial public offering and deferred $19.32 million of underwriting fees until the consummation of the initial business combination (Note 3).

~~Simultaneously with the closing of the initial public offering, the Company consummated the private placement (“private placement”) of 8,693,334 warrants (“private placement warrants”) at~~is a ~~price of $1.50 per private placement warrant with the Company’s sponsor, GTY Investors, LLC, a Delaware~~Colorado limited liability company ~~(the “Sponsor”), generating gross proceeds~~headquartered in Denver, Colorado, established in 2004. Sherpa is a leading provider of ~~approximately $13.04 million (Note 4).~~public sector budgeting software and consulting services that help state and local governments create and manage budgets and performance. Customers purchase Sherpa’s software and then engage its consulting services to configure the software and receive training on how to manage the software going forward. Following implementation, customers continue to use the software in exchange for maintenance or subscription fees.

Note 2. Restatement of Previously Issued Financial Statements
~~Upon~~On April 12, 2021, the ~~closing~~Acting Director of the ~~initial public offering~~Division of Corporation Finance and private placement on November 1, 2016, $552 million from the net proceeds of the sale of the units in the initial public offering and the private placement was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (“Trust Account”). The funds in the Trust Account were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with maturities of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the funds in 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 private placement warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination. There is no assurance that the Company will be able to complete a business combination successfully. The Company must complete one or more initial business combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into 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 holders of the outstanding Class A ordinary shares sold in the initial public offering (“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 approximately $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). 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 5). 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 its second amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rulesActing Chief Accountant of the Securities and Exchange Commission together issued a “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“~~SEC”~~SPACs”)” (the “SEC Statement”), concluding that SPAC warrants may require classification as a liability rather than equity. The SEC Statement discussed “certain features of warrants issued in SPAC transactions” that “may be common across all entities”. It focused in part on provisions in warrant agreements for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and ~~file tender offer documents with~~specifically whether the warrant holder is an input into the pricing of a fixed-for-fixed option on equity shares. According to the SEC ~~prior to completing~~Staff Statement, if the warrant holder is not an input into such pricing, these provisions would preclude the warrant from being classified in equity and thus require classification as a ~~business combination. If, however,~~liability. As a ~~shareholder approval~~result of the ~~transactions is required by law, or~~SEC Statement, the Company ~~decides~~reevaluated the accounting treatment of the public warrants and private warrants issued in connection with its initial public offering and previously recorded as equity on the Company’s consolidated balance sheet. The Company’s public warrants were correctly classified as equity. Because the Company’s private warrants do not contain a provision whereby the Company can call the warrants, however, the private warrants should have been recorded at fair value as a liability in the Company’s consolidated balance sheet. The Company assessed this error and determined it was not material to ~~obtain shareholder approval for business or legal reasons,~~previously issued financial statements. Accordingly, the Company will ~~offer to redeem shares~~revise, rather than restate, its previously issued 2020 quarterly and annual financial statements in ~~conjunction with a proxy solicitation pursuant~~the Company’s filings for 2021 on Forms 10-Q and 10-K filings. Additionally, the historical quarterly and annual financial statements prior to the ~~proxy rules and~~business combination were not ~~pursuant~~restated due to the ~~tender offer rules. Additionally, each public shareholder may elect~~change in accounting as we believe the information is no longer relevant to ~~redeem their public shares irrespective~~investors.
The following tables present the effect of ~~whether they vote~~the revision for ~~or against~~ the ~~proposed transaction. If~~financial statement line items adjusted in the ~~Company seeks shareholder approval in connection with a business combination, the initial shareholders (as defined below) have agreed to vote their founder shares (as defined in Note 4)~~affected periods:
Condensed Consolidated Statements of Operations 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.Comprehensive Loss

6

Quarter Ended March 31, 2020

As Previously Reported

Adjustments

As Revised
Change in fair value of warrant liability

$
—

$
1,563

$
1,563
Net loss

$
15,792

$
1,563

$
17,355
Comprehensive loss

$
13,743

$
1,563

$
15,306
Net loss per share, basic and diluted

$
(0.30)

$
(0.03)

$
(0.33)

9

~~GTY TECHNOLOGY HOLDINGS INC.~~Table of Contents

NOTES TO CONDENSED ~~INTERIM (UNAUDITED) FINANCIAL~~CONSOLIDATED STATEMENTS

(UNAUDITED)

~~Notwithstanding the foregoing, the Company’s second amended~~(Amounts in tables in thousands, except share and restated memorandum and articles of association provides 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 20% 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, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Company’s second amended and restated memorandum and articles of association that would affect the substance or timing of the Company’s obligation 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 (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law 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, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

In connection with the redemption of 100% of the Company’s outstanding public shares for a portion of the funds held in the Trust Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable).

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 5) held in the Trust Account in the event the Company does not complete a business combination within in the Combination Period and, in such event, such amounts will be included with the other 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, our sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (other than the Company's independent public accountants) 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 public share due to reductions in the value of the trust assets, less taxes payable. This liability will not apply with respect 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) or 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”). The Company will seek to reduce the possibility that our sponsor must indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s registered independent public accounting firms), 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.amounts)

Condensed Consolidated Statements of Cash Flows

Quarter Ended March 31, 2020

As Previously Reported

Adjustments

As Revised
Net loss

$
15,792

$
1,563

$
17,355
Change in fair value of warrant liability

$
—

$
1,563

$
1,563

Condensed Consolidated Balance Sheet

As of December 31, 2020

As Previously Reported

Adjustments

As Revised
Warrant liability

$
—

$
3,040

$
3,040
Additional paid in capital

$
390,232

$
(9,351)

$
380,881
Accumulated deficit

$
(129,030)

$
6,311

$
(122,719)

On November 9, 2016, the Company announced that, commencing November 14, 2016, holders of the units sold in the Company’s initial public offering may elect to separately trade the Class A ordinary shares and warrants included in the units. The Class A ordinary shares and warrants that are separated trade on The Nasdaq Capital Market (“Nasdaq”) under the symbols “GTYH” and “GTYHW,” respectively. Units that are not separated continue to trade on Nasdaq under the symbol “GTYHU.”
7
~~GTY TECHNOLOGY HOLDINGS INC.~~
~~NOTES TO CONDENSED INTERIM (UNAUDITED) FINANCIAL STATEMENTS~~
~~Liquidity~~
As of September 30, 2017, the Company had a balance of cash and cash equivalents of approximately $667,000, which excludes interest income of approximately $3.4 million from the Company's investments in the Trust Account which is available to the Company for tax obligations, if any. 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 intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions) to complete its initial business combination. To the extent that the Company’s equity or debt is used, in whole or in part, as consideration to complete the initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue its growth strategies.
Based on the foregoing, management believes that the Company will have sufficient working capital to meet the Company's needs for the next twelve months. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
Note 2.3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying ~~unaudited~~ condensed ~~interim~~consolidated financial statements ~~are presented~~were prepared in ~~U.S. dollars in conformity~~accordance with accounting principles generally accepted in the United States of America (“~~U.S.~~ GAAP”) ~~and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the~~for interim financial information. Certain information and ~~footnotes required by U.S. GAAP. In the opinion of management, the unaudited~~disclosures normally included in condensed ~~interim~~consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017,prepared in accordance with GAAP have been condensed or ~~any future period. These unaudited~~omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements ~~contained~~and notes thereto included in the ~~Company’s~~Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the ~~SEC~~Securities and Exchange Commission (“SEC”) on ~~March 24, 2017.~~February 19, 2021. Certain reclassifications have been made to conform to current period presentation.
~~Emerging Growth Company~~
Principles of Consolidation
The ~~Company is an “emerging growth company,” as defined in Section 2(a)~~three months ended March 31, 2021 and 2020 condensed consolidated financial statements include all accounts of the ~~Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”),~~Company and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its ~~periodic reports~~subsidiaries. All material intercompany transactions and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those thatbalances have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
~~Cash and Cash Equivalents~~
~~The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.~~
8
~~GTY TECHNOLOGY HOLDINGS INC.~~
~~NOTES TO CONDENSED INTERIM (UNAUDITED) FINANCIAL STATEMENTS~~
~~Cash and Cash Equivalents Held in Trust Account~~
~~The amounts held~~been eliminated in the Trust Account represent substantially all of the proceeds of the initial public offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a business combination. As of September 30, 2017, cash and marketable securities, which classified as trading securities, held in the Trust Account consisted of approximately $555 million in U.S. Treasury Bills and approximately $217 in cash. At September 30, 2017, there was approximately $3.4 million of interest income held in the Trust Account available to be released to the Company to pay income taxes and up to $100,000 to pay dissolution expenses, if any.accompanying condensed consolidated financial statements.
~~Concentration of Credit Risk~~
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. At September 30, 2017, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Use of Estimates
The preparation of the condensed consolidated financial statements and related disclosures in conformity with ~~U.S.~~ GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ~~financial statements~~balance sheets and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include revenue recognition, the carrying value of goodwill, the fair value of acquired intangibles, the capitalization of software development costs, the useful lives of intangible assets, share-based compensation, right of use assets, warrant liability, financing and operating lease liabilities, contingent consideration and the valuation allowance of deferred tax assets resulting from net operating losses.
Covid-19 Update
In December 2019, the emergence of a novel coronavirus, or COVID-19, was reported and in March 2020, the World Health Organization, or WHO, characterized COVID-19 as a pandemic. The broader implications of the global emergence of COVID-19 on the Company’s business, operating results, and overall financial performance remain uncertain and they depend on certain developments, including the duration and spread of the outbreak, impact on the Company’s

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

customers and its sales cycles, impact on its partners or employees, and impact on the economic environment and financial markets, all of which are uncertain and cannot be predicted.  Since March 2020, the Company has seen certain new and existing customers halt or decrease investment in infrastructure, and the Company expects that certain of its current and potential customers will take actions to reduce operating expenses and moderate cash flows, including by delaying sales and requesting extended billing and payment terms. The Company will continue to actively monitor the situation and may take further actions that alter its business operations, as may be required by federal, state, or local authorities, or that the Company determines are in the best interests of its employees, customers, partners, suppliers, and stockholders.
Significant Accounting Policies

~~Making estimates requires management~~There have been no material changes to ~~exercise~~the Company’s significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating its estimate, could changeaccounting policies previously disclosed in the ~~near term due to one or more future confirming events. Accordingly,~~Company’s Annual Report on Form 10-K for the ~~actual results could differ significantly~~fiscal year ended December 31, 2020 as filed with the SEC on February 19, 2021 aside from those ~~estimates.~~described in Note 2.

~~Offering Costs~~
Offering costs consisting of legal, accounting, underwriting fees and other costs that were directly related to the initial public offering totaled approximately $31 million, inclusive of $19.32 million of deferred underwriting fees. Offering costs were charged to shareholders’ equity upon the completion of the initial public offering on November 1, 2016.
~~Ordinary Shares Subject to Possible Redemption~~
Fair Value
The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company ~~accounts~~utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value.

● Level 1 — uses quoted prices in active markets for identical assets or liabilities.
● Level 2 — uses observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
● Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment.
The Company’s only material financial instruments carried at fair value as of March 31, 2021 and December 31, 2020, with changes in fair value flowing through current earnings, consist of contingent consideration liabilities recorded in conjunction with business combinations and the fair value of its ~~Class A ordinary shares subject to possible redemption~~warrant liabilities are as follows:

Fair Value Measurement at

Reporting Date Using




Quoted Prices in

Significant


Active Markets

Other

Significant

Balance as of

for Identical

Observable

Unobservable

March 31,

Assets

Inputs

Inputs

2021

(Level 1)

(Level 2)

(Level 3)
Contingent consideration – current

$
729

$
—

$
—

$
729
Contingent consideration – long term

43,630

—

—

43,630
Warrant liability

7,078

—

—

7,078
Total liabilities measured at fair value

$
51,437

$
—

$
—

$
51,437

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in ~~accordance with~~tables in thousands, except share and per share amounts)

Fair Value Measurement at

Reporting Date Using




Quoted Prices in

Significant


Active Markets

Other

Significant

Balance as of

for Identical

Observable

Unobservable

December 31,

Assets

Inputs

Inputs

2020

(Level 1)

(Level 2)

(Level 3)
Contingent consideration – current

$
743

$
—

$
—

$
743
Contingent consideration – long term

42,530

—

—

42,530
Warrant liability

3,040

—

—

3,040
Total liabilities measured at fair value

$
46,313

$
—

$
—

$
46,313

There were no transfers made among the ~~guidance~~three levels in ~~ASC Topic 480 “~~~~Distinguishing Liabilities from Equity~~~~”. Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are~~the fair value hierarchy during the three months ended March 31, 2021.
The following tables present additional information about Level 3 liabilities measured at fair value. ~~Conditionally redeemable ordinary shares (including ordinary shares~~Both observable and unobservable inputs may be used to determine the fair value of positions that ~~feature redemption rights that are either~~the Company has classified within the ~~control of~~Level 3 category. As a result, the ~~holder or subject to redemption upon the occurrence of uncertain events not solely~~unrealized gains and losses for liabilities within the ~~Company’s control) are classified~~Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.
Changes in contingent consideration liabilities measured at fair value from December 31, 2020 to March 31, 2021 were as ~~temporary equity. At all other times, ordinary shares are classified as shareholders’ equity.~~ follows:

Contingent consideration – December 31, 2020

$
43,273
Change in fair value of contingent consideration

1,114
Payments of contingent consideration

(28)
Contingent consideration – March 31, 2021

$
44,359

On February 19, 2019, the Company consummated several acquisitions (collectively, the “Acquisition”), pursuant to which it acquired each of Bonfire, CityBase, eCivis , Open Counter, Questica and Sherpa (together with Bonfire, CityBase, eCivis, Open Counter and Questica, the “Acquired Companies”).
The ~~Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside~~fair value of the Company’s ~~control~~contingent consideration liabilities recorded as part of the Acquisition has been classified within Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments due to the sellers based on each company’s achievement of annual earnings targets in certain years and ~~subject~~other events considered in certain transaction documents. The initial fair values of the contingent consideration were calculated through the use of either Monte Carlo simulation or modified Black-Scholes analyses based on earnings projections for the respective earn-out periods, corresponding earnings thresholds, and approximate timing of payments as outlined in the purchase agreements for each of the Acquired Companies. The analyses utilized the following assumptions: (i) expected term; (ii) risk-adjusted net sales or earnings; (iii) risk-free interest rate; and (iv) expected volatility of earnings. Estimated payments, as determined through the respective models, were further discounted by a credit spread assumption to ~~occurrence~~account for credit risk. The contingent consideration is revalued to fair value each period, and any increase or decrease is recorded in operating income (loss). The fair value of ~~uncertain future events. Accordingly, an aggregate of 53,166,582~~the contingent consideration may be impacted by certain unobservable inputs, most significantly with regard to discount rates, expected volatility and ~~52,909,602 Class A ordinary shares subject~~historical and projected performance. Significant changes to ~~possible redemption~~these inputs in isolation could result in a significantly different fair value measurement.
Changes in the warrant liability measured at ~~redemption~~fair value ~~at September 30, 2017 and~~from December 31, ~~2016, respectively, are presented~~2020 to March 31, 2021 were as ~~temporary equity, outside~~follows:

Table of ~~the shareholders’ equity section~~Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Warrant liability – December 31, 2020

$
3,040
Change in fair value of warrant liability

4,038
Warrant liability – March 31, 2021

$
7,078

The warrant liability was estimated using a Black-Scholes model derived from a Monte Carlo simulation of the Company’s ~~accompanying balance sheets.~~outstanding public warrants. These inputs were primarily derived from the implied volatility of the traded public warrant price.
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and term loans approximates fair value because of the short-term nature of these instruments.
The Company measures certain assets at fair value on a non-recurring basis, generally annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include goodwill and other intangible assets.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Disaggregation of Revenues

Three Months Ended

Three Months Ended

March 31,

March 31,


2021

2020

Subscriptions, support and maintenance

$
10,165

$
7,724

Professional services

2,941


3,169

License

63


383

Asset sales

90


—

Total revenues

$
13,259

$
11,276

Revenues
Subscription, support and maintenance. The Company provides SaaS that provide customers with access to SaaS related support and updates during the term of the arrangement. Revenues are recognized ratably over the contract term as the customer simultaneously receives and consumes the benefits of the subscription service, as the service is made available by the Company. The first year of subscription fees are typically payable within 30 days after the execution of a contract, and thereafter upon renewal. The Company initially records subscription fees as contract liabilities and recognizes revenues on a straight-line basis over the term of the agreement.
The Company’s contracts may include variable consideration in the form of usage fees, which are constrained and recognized once the uncertainties associated with the constraint are resolved, which is when usage occurs and the fee is known.
Subscription, support and maintenance revenues also includes on-premise support or maintenance pertaining to license sales. Revenues from on-premise support are recognized on a straight-line basis over the support period.
Revenues from subscription, support and maintenance comprised approximately 77% and 68% of total revenues for the three months ended March 31, 2021 and 2020, respectively.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Professional services. The Company’s professional services contracts generate revenues on a time and materials or fixed fee basis. Revenues are recognized as the services are rendered for time and materials contracts. Revenues are recognized when the milestones are achieved and accepted by the customer or on a proportional performance basis for fixed fee contracts. Training revenues are recognized as the services are performed. Revenues from professional services comprised approximately 22% and 28% of total revenues for the three months ended March 31, 2021 and 2020, respectively.
License.Revenues from distinct licensed software are recognized upfront when the software is made available to the customer, which normally coincides with contract execution, as this is when the customer has the risks and rewards of the right to use the software. Revenues from licenses comprised approximately less than 1% and 3% of total revenues for the three months ended March 31, 2021 and 2020, respectively.
Asset sales. Revenues from asset sales are recognized when the asset, typically a kiosk, has been received by the customer and is fully operational and ready to accept transactions, which is when the customer obtains control and has the risks and rewards of the asset. Asset sales were approximately 1% and less than 1% of total revenues for the three months ended March 31, 2021 and 2020, respectively.
Restructuring Charges
On March 30, 2020, the Company implemented a global restructuring plan which resulted in an approximate 10% reduction of the Company’s workforce. This action was intended to streamline the Company’s operational reporting and reduce operating cash outflows. The Company recorded pre-tax restructuring charges of approximately $3.5 million which is comprised of one-time employee termination benefits paid over a weighted-average period of approximately 10 months. All termination benefits associated with the restructuring plan have been paid as of March 31, 2021.
Net ~~Income~~Loss per Share
Net ~~income~~loss per share of common stock is computed by dividing net loss by the weighted-average number of ~~ordinary~~ shares of common stock outstanding during the ~~periods. An aggregate~~period. Diluted net income per share of ~~53,166,582 Class A ordinary shares subject~~common stock is computed similarly to ~~possible redemption~~basic net income per share of common stock except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Due to the net loss for the three months ended March 31, 2021 and 2020, diluted and basic loss per share are the same.
Securities that could potentially dilute net loss per share in the future that were not included in the computation of diluted loss per share at ~~September 30, 2017 have been excluded~~March 31, 2021 and 2020 are as follows:

2021

2020
Warrants to purchase common stock

27,093,334

27,093,334
Unvested restricted stock units

3,173,584

4,022,110
Options to purchase common stock

245,112

261,027
Total

30,512,030

31,376,471

Income Taxes
In determining the quarterly benefit from income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the ~~calculation~~U.S. federal statutory rate of ~~basic~~21% as a result of state taxes, foreign taxes and changes in the

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Company’s valuation allowance for domestic income taxes. For the three months ended March 31, 2021 and 2020, the Company recorded a $0.2 million and $2.5 million benefit from income taxes, respectively.

Recently Adopted Accounting Pronouncements

On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2018-13, Changes to Disclosure Requirements for Fair Value Measurements (Topic 820), which improved the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements.

On January 1, 2020, the Company adopted ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under Accounting Standards Codification (“ASC”) 350-40 – Internal Use Software, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements.

On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies various aspects related to accounting for income taxes, removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per ~~ordinary~~ share ~~since such shares, if redeemed, only participate in their pro rata share~~for convertible instruments and requires the use of the ~~trust earnings.~~if-converted method. This guidance will be effective for the Company in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. The Company ~~has~~does not ~~considered~~expect the ~~effect~~adoption of this guidance to have a material impact on its consolidated financial statements.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Note 4. Intangible Assets
The Company recognized goodwill and certain identifiable intangible assets in connection with business combinations. Identifiable intangible assets consist of the ~~warrants sold in~~following as of March 31, 2021 and March 31, 2020:

March 31, 2021

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount
Patents / Developed Technology

$
60,084

$
(15,878)

$
44,206
Trade Names / Trademarks

16,348

(3,623)

12,725
Customer Relationships

51,003

(10,770)

40,233
Non-Compete Agreements

1,162

(818)

344
Total Intangibles

$
128,597

$
(31,089)

$
97,508

December 31, 2020

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount
Patents / Developed Technology

$
60,084

$
(14,026)

$
46,058
Trade Names / Trademarks

16,348

(3,227)

13,121
Customer Relationships

51,003

(9,514)

41,489
Non-Compete Agreements

1,162

(723)

439
Total Intangibles

$
128,597

$
(27,490)

$
101,107

Amortization expense recognized by the ~~initial public offering (including~~Company related to intangible assets for the ~~consummation of the over-allotment)~~three months ended March 31, 2021 and ~~Private Placement to purchase an~~March 31, 2020 was $3.6 million and $3.7 million, respectively.
The estimated aggregate ~~of 27,093,334 shares~~future amortization expense for intangible assets is as follows:

Nine months ended December 31, 2021

11,012
Year ended December 31, 2022

14,276
Year ended December 31, 2023

14,224
Year ended December 31, 2024

14,263
Year ended December 31, 2025

14,224
Thereafter

29,509

$
97,508

Note 5. Leases
The Company leases office space under agreements classified as operating leases that expire on various dates through 2030. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s ~~class A ordinary shares~~leases include renewal options and escalation clauses; renewal options have not been included in the calculation of ~~diluted income per share, since their inclusion would be anti-dilutive. For~~ the ~~period from August 11, 2016 (Inception) through September 30, 2016,~~lease liabilities and right of use assets as the ~~weighted average shares were reduced for the effect of an aggregate of 1,800,000 Class B ordinary shares that were subject to surrender for no consideration if the over-allotment~~Company is not ~~exercised~~reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses.
At March 31, 2021, the Company had operating right of use assets of approximately $2.5 million and operating lease liabilities of approximately $4.0 million, which are included in the condensed consolidated balance sheet.
The Company purchases kiosks that are funded by finance leases that expire on various dates through 2023 and are included in fixed assets. At March 31, 2021, the ~~underwriters. On November 1, 2016, the underwriter exercised their over-allotment option, thus, these Class B ordinary shares were not forfeited (see Note 5).~~
~~Fair Value Measurements~~
~~Fair value is defined as the price that would be received for sale~~Company had finance lease right of ~~an asset or paid for transfer~~use assets of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or$1.3 million and finance lease liabilities ~~(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:~~of approximately $0.6 million.
9
16

~~GTY TECHNOLOGY HOLDINGS INC.~~Table of Contents

NOTES TO CONDENSED ~~INTERIM (UNAUDITED) FINANCIAL~~CONSOLIDATED STATEMENTS

·	~~Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;~~
·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

(UNAUDITED)

~~ASC 820,~~~~Fair Value Measurement~~(Amounts in tables in thousands, except share and ~~Disclosures~~~~, requires all entities to disclose~~per share amounts)

The following summarizes quantitative information about the fair value of financial instruments, both assets and liabilities for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. Company’s leases:

Three Months Ended March 31, 2021:



Grants

Procurement

Payments

Management

Budget

Total
Finance lease cost

Amortization of right-of-use assets

$
—

$
15

$
—

$
—

$
15
Interest

—

26

—

—

26
Operating lease cost

114

115

20

109

358
Total lease cost

$
114

$
156

$
20

$
109

$
399



Grants

Procurement

Payments

Management

Budget

Total

Weighted-average remaining lease term – finance leases

N/A

1.0

N/A

N/A

1.0

Weighted-average remaining lease term – operating leases

1.2

0.7

1.8

9.5

7.2

Weighted-average discount rate – finance leases

N/A

13.0
%

N/A

N/A

13.0
%
Weighted-average discount rate – operating leases

9.9
%

10.0
%

8.0
%

4.8
%

6.2
%

As of ~~September~~March 31, 2021, future minimum lease payments under non-cancellable leases are as follows:



Grants

Operating

Finance

Procurement

Payments

Management

Budget

Leases

Leases
Nine months ended December 31, 2021

$
365

$
343

$
90

$
318

$
1,026

$
439
Year Ended December 31, 2022

247

—

123

430

677

197
Year Ended December 31, 2023

—

—

10

383

383

—
Year Ended December 31, 2024

—

—

—

368

368

—
Year Ended December 31, 2025

—

—

—

417

417

—
Thereafter

—

—

—

2,109

2,109

—
Total

$
612

$
343

$
223

$
4,025

$
4,980

$
636
Less present value discount

(27)

(21)

(16)

(883)

(931)

(51)
Present value of lease liabilities

$
585

$
322

$
207

$
3,142

$
4,049

$
585

Note 6. Term Loans

Credit Facility

On February 14, 2020, the Company entered into an unsecured term loan credit facility (“February 2020 Credit Facility”) that provided for borrowing of term loans in an aggregate principal amount of $12.0 million.  The credit facility had a maturity date of twelve months from the borrowing date of the term loans.  On the closing date, the Company fully drew on the credit facility net of deferred issuance costs of $0.7 million.  The $0.7 million of deferred issuance costs included $0.4 million of fees to be applied against interest and $0.3 million of other issuance costs. Amounts outstanding under the credit facility bore interest from the date the term loans were first made until the last day of the fiscal month immediately following the six-month anniversary of such initial borrowing date at a rate per annum equal to 12 percent.  Commencing on the first day of each fiscal month thereafter, the interest rate increased by 1 percent per annum until the termination date. The February 2020 Credit Facility was terminated on November 13, 2020 and $0.2 million of unamortized deferred issuance costs were expensed and included in other income, net.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

On November 13, 2020, the Company entered into a senior secured term loan facility (“November 2020 Credit Facility”) that provides for borrowing of term loans in an aggregate principal amount of $25,000,000. The November 2020 Credit Facility has a maturity date of 30 ~~2017,~~months from the ~~recorded values~~borrowing of ~~cash~~the term loans. On the closing date, the Company fully drew on the November 2020 Credit Facility and ~~cash equivalents, prepaid~~replaced the February 2020 Credit Facility. Amounts outstanding under the November 2020 Credit Facility accrue interest at a rate of 8 percent plus LIBOR or 8.15% at March 31, 2021 and 2 percent payment-in-kind (“PIK”) interest. The November 2020 Credit Facility is supported by a security interest in the assets of the Company and includes certain financial covenants pertaining to annual recurring revenue, revenue, and cash. As of March 31, 2021, the Company was compliant with all financial covenants.

For the three months ended March 31, 2021 and 2020, the Company recognized $0.7 million and $0.2 million of interest expense, respectively, under the February 2020 and November 2020 Credit Facilities and approximately $0.2 million and $0.1 million of debt issuance costs, respectively. At March 31, 2021, the Company had accrued approximately $0.2 million of accrued interest.

Paycheck Protection Plan Loans (PPP Loans)

In April and May 2020, the Company’s subsidiaries CityBase, eCivis, and Sherpa received $2.0 million, $0.9 million and $0.2 million, respectively, in loan proceeds from the Paycheck Protection Program (the “PPP”) administered by the Small Business Administration of the United States government. This program was established under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was created to provide fast and direct economic assistance for American workers, families, small businesses, and preserves jobs for American industries. The Company used the funds to support the compensation expenses ~~accounts payable,~~related to its U.S. employees. These loans mature two years from the date of issuance and ~~accrued expenses approximate~~accrue interest at a rate of one percent per annum. As of March 31, 2021 and December 31, 2020, the ~~fair values due~~Company accounted for these loans in accordance with ASC 470. The Company obtained forgiveness for the $0.2 million in loan proceeds pertaining to the ~~short-term nature~~loan received by Sherpa and expects to seek forgiveness for the remaining loans during the year ended December 31, 2021.

The Company’s term loans are summarized as follows:

November 2020
Credit Facility

PPP Loans

Total
Principal
$ 25,000

$ 2,971

$ 27,971
Payment-in-kind ("PIK") accrued interest
199

—

199
Unamortized deferred issuance costs
(1,476)

—

(1,476)
Term loans, net
$ 23,723

$ 2,971

$ 26,694

Maturity Date
May 2023

April and May 2022

Interest Rate
8% + LIBOR

1%

PIK Interest Rate
2%

0%

Note 7. Commitments and Contingencies
Legal Proceedings
From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not currently a party to any legal proceedings that, if determined adversely to the ~~instruments.~~
~~Recent Accounting Pronouncements~~
~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted,~~Company, would have a material adverse effect on the ~~Company’s financial statements.~~Company.

~~Subsequent Events~~
~~The Company evaluates events that have occurred after the balance sheet date through the date, the financial statements were issued.~~
~~Note 3. Initial Public Offering~~
On November 1, 2016, the Company sold 55,200,000 units at a purchase price of $10.00 per unit in the initial public offering, including the issuance of 7,200,000 units as a result of the underwriters’ exercise of their over-allotment option in full. 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 6). No fractional public warrants will be issued upon separation of the units and only whole public warrants will trade.
The Company incurred offering costs of approximately $31 million, inclusive of approximately $30.36 million of underwriting fees. The Company paid $11.04 million of underwriting fees upon the closing of the initial public offering and deferred $19.32 million of underwriting fees until the consummation of the initial business combination.
~~Note 4. Related Party Transactions~~
~~Founder Shares~~
The Company initially issued 8,625,000 Class B ordinary shares as of August 17, 2016. On October 14 and October 26, 2016, the Company effected a share capitalization resulting in an aggregate of 11,500,000 and 13,800,000 founder shares outstanding, respectively. In October 2016, the Sponsor transferred 25,000 founder shares to each of the Company’s independent director nominees at the same per-share purchase price paid by the Sponsor. The foregoing transfers of founder shares were made in reliance upon an exemption from the registration requirements of the Securities Act pursuant to the so-called 4(a)(1)-½ exemption. The founder shares will automatically convert into Class A ordinary shares upon the consummation of a business combination on a one-for-one basis, subject to adjustments. As a result of the underwriters’ exercise of their over-allotment option, no founder shares were surrendered to the Company by the Sponsor.
The initial shareholders have agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees) until the earlier to occur of (i) one year after the completion of a business combination, or earlier if, subsequent to a business combination, the closing price of the Class A ordinary shares equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing 150 days after the completion of a business combination and (ii) the date following the completion of a business combination on which the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property the (“Lock-Up Period”).
10
18

~~GTY TECHNOLOGY HOLDINGS INC.~~Table of Contents

NOTES TO CONDENSED ~~INTERIM (UNAUDITED) FINANCIAL~~CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

~~Private Placement Warrants~~Indemnification

~~Concurrently~~Additionally, in the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by the ~~closing~~Company, or from intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the ~~initial public offering,~~underlying agreement and the ~~Sponsor purchased an aggregate~~maximum potential amount of ~~8,693,334 private placement warrants at $1.50 per warrant, generated gross proceeds of $13.04 million in the private placement.~~

Each private placement warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. A portion of the proceeds from sale of the private placement warrants was added to the proceeds from the initial public offering to be held in the Trust Account. Iffuture payments that the Company ~~does~~could be required to make under these indemnification provisions may not ~~complete a business combination within the Combination Period, the private placement warrants will expire worthless.~~

~~Due~~be subject to ~~Related Party~~

maximum loss clauses. The ~~Company’s Sponsor loaned~~maximum potential amount of future payments that the Company ~~in the form of a promissory note up~~could be required to ~~$200,000 to be used for the payment of costs related to the initial public offering. The loan was non-interest bearing, unsecured and due upon the closing of the initial public offering.~~make under these indemnification provisions is indeterminable. The Company has never paid ~~off all outstanding amount to the Sponsor in December 2016.~~

~~In addition, in order to finance transaction costs~~a material claim, nor has it been sued in connection with ~~a business combination, the Sponsor or an affiliate~~these indemnification arrangements.

As of ~~the Sponsor, or certain of the Company’s officers~~March 31, 2021 and ~~directors may, but are not obligated to, loan~~December 31, 2020, the Company ~~funds as may be required (“Working Capital Loans”). If~~has not accrued a liability for any legal proceedings, claims or indemnification arrangements because the ~~Company completes~~likelihood of incurring a business combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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,payment obligation, 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 $1.5 million of such Working Capital Loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant. The warrants would be identical to the private placement warrants.

~~Administrative Service Fee~~

The Company has agreed, commencing on the effective date of the initial public offering through the earlier of the Company’s consummation of a business combination and its liquidation, to reimburse the Sponsor in an amount not to exceed $10,000 per month for office space, and secretarial and administrative services. The Company recognized $30,000 and $90,000, respectively, for the three and nine months ended September 30, 2017 in connection with ~~this agreement in the accompanying statements of operations. As of September 30, 2017, the Company had a total of $110,000 in administrative fees payable to the Sponsor.~~them is not probable or reasonably estimable.

~~Note 5. Commitments~~

~~Registration Rights~~

The holders of the founder shares and private placement warrants and warrants that maybe 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 rights agreement to be signed prior to or on the effective date of the initial public offering. 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 consummation of a business combination. However, the registration 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.

~~Underwriting Agreement~~

The Company granted the underwriters a 45-day option from October 26, 2016 to purchase up to 7,200,000 additional units to cover over-allotments, if any, at the initial public offering price less the underwriting discounts and commissions, which was fully exercised on November 1, 2016.

The Company paid an underwriting discount of $0.20 per unit, or $11.04 million in the aggregate upon the consummation of the initial public offering. $0.35 per unit, or $19.32 million in the aggregate will be payable to the underwriters for deferred underwriting fees. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.

Note 6.8. Shareholders’ Equity
~~Class A Ordinary Shares~~ ~~- The Company~~Common Stock – GTY is authorized to issue 400,000,000 shares of ~~Class A ordinary shares~~common stock with a par value of $0.0001 per share. ~~Holders~~
On November 25, 2020, the Company entered into an At Market Sales Agreement with B. Riley Securities, Inc. (“B. Riley”) and Needham & Company (“Needham” and together with B. Riley, the “Sales Agents”) with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $10.0 million through B. Riley and Needham as its sales agents. The issuance and sale, if any, of shares of common stock by the Company under the At Market Sales Agreement will be made pursuant to the Company’s effective registration statement on Form S-3. During the three months ended March 31, 2021, the Company sold 935,633 of common shares for $6.8 million in proceeds.
During the three months ended March 31, 2021, the Company issued 358,658 of common shares for the same number of exchangeable shares to the former shareholders of Questica and Bonfire.
Share Redemptions
Under the agreements with eCivis, the Company acquired eCivis for aggregate consideration of approximately $14.0 million in cash and 2,883,433 shares of Company common stock, including 703,631 shares of the Company’s ~~Class A ordinary~~common stock which are redeemable for cash at any time in the sole discretion of the Company for a price of $10.00 per share (the “Redeemable Shares”). Upon redemption of the Redeemable Shares, the Company must simultaneously redeem additional shares ~~are entitled~~from the holder equal to ~~one vote for each~~40% of the number of Redeemable Shares being redeemed (the “Additional Shares”) at $10 per share. ~~At September 30, 2017~~If the Redeemable Shares were not redeemed by February 12, 2020 and ~~December 31, 2016, there are 55,200,000 Class A ordinary~~February 12, 2021, the Company was required to issue additional shares, as calculated based on the number of outstanding Redeemable Shares. In June 2019, 178,571 Redeemable Shares and 71,428 Additional Shares were redeemed and the Company recorded a $0.8 million loss. During February 2020, the Company issued 334,254 Additional Shares and ~~outstanding, including 53,166,582 and 52,909,602~~recorded a $2.1 million loss. The remaining 525,060 shares of ~~Class A ordinary shares subject to possible redemption, respectively.~~common stock were redeemed for a total of $8.0 million and the Company recorded a $5.3 million loss during the three months ended March 31, 2021.
11
Preferred Shares – GTY ~~TECHNOLOGY HOLDINGS INC.~~
~~NOTES TO CONDENSED INTERIM (UNAUDITED) FINANCIAL STATEMENTS~~
~~Class B Ordinary Shares~~ ~~- The Company~~ is authorized to issue 50,000,000 shares of Class B ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class B ordinary shares are entitled to one vote for each share. The Class B ordinary shares will automatically convert into Class A ordinary shares upon the consummation of a business combination on a one-for-one basis, subject to adjustments.
Prior to the initial business combination, only holders of Class B ordinary shares will have the right to vote on the election of directors. Holders of Class A ordinary shares will not be entitled to vote on the election of directors during such time. These provisions of the Company’s second amended and restated memorandum and articles of association may only be amended by a special resolution passed by a majority of at least 90% of the Company’s ordinary shares voting in a general meeting. Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders except as required by law.
~~As of September 30, 2017 and December 31, 2016, the Company has 13,800,000 Class B ordinary shares issued and outstanding.~~
~~Preferred Shares~~ ~~- The Company is authorized to issue 1,000,000~~25,000,000 preferred shares with a par value of $0.0001 per share. ~~At September 30, 2017~~As of March 31, 2021 and December 31, ~~2016,~~2020, there ~~are no~~were 0 preferred shares issued or outstanding.

Table of Contents

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Warrants ~~- The~~

At March 31, 2021 and December 31, 2020, there were a total of 27,093,334 warrants outstanding including 18,400,000 public warrants and 8,693,334 private warrants. The warrants were originally sold as part of the units offered in the Company’s initial public offering and expire five years from the date of the acquisition or February 2024. Each warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per share, subject to adjustments. The warrants may ~~only~~ be exercised only for a whole number of ~~shares. No~~shares of common stock. NaN fractional ~~public warrants~~shares 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 (or the Company permits holders to exercise their public warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a business combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the public warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the public warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60^th ) 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. 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 for redemption, ~~(except with respect~~in whole and not in part, at a price of $0.01 per warrant, upon not less than 30 days’ prior written notice of redemption to each warrant holder, if, and only if, the reported last sale price of common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the ~~private placement warrants):~~

·	~~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 closing price of the ordinary shares equals or exceeds $18.00 per share 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~~sends the ~~public~~notice of redemption to the warrant holders. The private warrants are not callable for redemption ~~management will have~~and are marked to market and included in warrant liabilities with non-cash fair value adjustments recorded into earnings during each reporting period.

Note 9. Share-Based Compensation
Stock Options
In connection with the Acquisition, the Company adopted a stock option plan and issued 408,667 stock options to ~~require all holders that wish~~employees. The total fair value of the stock options at the grant date was $3.6 million.
A summary of stock option activity is as follows:






Weighted


Average

Weighted

Remaining

Average

Contractual

Total

Number of

Exercise

Life (in

Intrinsic

Shares

Price

years)

Value
Outstanding as of December 31, 2020

245,904

$
2.26

7.0

$
1,130
Granted

—

—

—

—
Exercised

(792)

1.16

Forfeited/expired

—

—

Outstanding as of March 31, 2021

245,112

$
2.26

6.7

$
1,126
Options vested and exercisable

191,248

$
2.25

6.6

$
880

For the three months ended March 31, 2021 and 2020, the Company recorded approximately $0.1 million of share-based compensation expense related to ~~exercise~~ the ~~public warrants~~options. As of March 31, 2021, the Company has $0.4 million of unrecognized share-based compensation cost to ~~do so on~~be recognized over 0.5 years.

Restricted Stock Units
Subsequent to the Acquisition, the Company adopted a ~~“cashless basis,”~~plan to issue restricted stock units (“RSUs”) to employees as ~~described~~annual performance awards. RSUs may vest in ratable annual installments over either two or four years, as applicable, from the ~~warrant agreement.~~date, or RSUs may vest subject to the achievement of certain performance conditions over a three-year performance period, in each case, assuming continuous service by the employees through the applicable vesting dates.

A summary of the Company's RSU’s and related information is as follows:
12

20

~~GTY TECHNOLOGY HOLDINGS INC.~~Table of Contents

NOTES TO CONDENSED ~~INTERIM (UNAUDITED) FINANCIAL~~CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Weighted Average

Number of Units

Grant Price
Unvested as of December 31, 2020

3,280,290

$
4.94
Granted

816,162

6.92
Vested

(882,990)

4.70
Forfeited/expired

(39,878)

4.45
Unvested as of March 31, 2021

3,173,584

$
5.52

For the three months ended March 31, 2021 and 2020, the Company recorded approximately $1.7 million and $3.2 million, respectively, of share-based compensation expense related to the RSUs. As of March 31, 2021, the Company had unrecognized share-based compensation expense related to all unvested RSUs of $14.5 million. The weighted average remaining contractual term of unvested RSUs is approximately 1.3 years at March 31, 2021. 825,590 of the unvested RSUs contain performance conditions subject to achieving segment specific revenue and profitability metrics.

Note 10. Segment Reporting
The ~~exercise price~~Company conducts its business through the following 5 operating segments: Procurement, Payments, Grants Management, Permitting, and ~~number of Class A ordinary shares issuable upon exercise~~Budget.
The accounting policies of the ~~warrants may be adjusted~~operating segments are the same as those described in certain circumstances including in the event of a share dividend, 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. Additionally, in no event will the Company be required to net cash settle the warrants shares. 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 ~~7. Fair Value Measurements~~
3. The following ~~table presents~~provides operating information about the Company’s ~~assets that are measured on a recurring basis as of September 30, 2017 and December 31, 2016 and indicates~~reportable segments for the ~~fair value hierarchy~~periods presented:


Corporate

Procurement

Payments

Grants Management

Permitting

Budget

Total
Three Months Ended March 31, 2021














Total revenue

$
—

2,437

2,229

1,750

695

6,148

$
13,259
Cost of revenues

—

470

1,566

650

154

1,902

4,742
Income (loss) from operations

(1,756)

(805)

(4,846)

(969)

(387)

627

(8,136)
Amortization of intangible assets

—

651

1,355

323

297

973

3,599
Depreciation expense

—

47

94

9

2

101

253
Interest income (expense), net

(844)

—

(12)

(3)

—

—

(859)
Benefit from (provision for) income taxes

—

—

—

—

—

170

170

Three Months Ended March 31, 2020


Total revenue

$
—

1,656

1,899

1,465

613

5,643

$
11,276
Cost of revenues

—

392

1,470

722

139

1,804

4,527
Income (loss) from operations

(5,520)

(2,114)

(6,352)

(1,449)

(886)

(199)

(16,520)
Amortization of intangible assets

—

667

1,365

323

300

1,018

3,673
Depreciation expense

—

16

18

8

1

11

54
Interest income (expense), net

(205)

(1)

(30)

—

—

—

(236)
Benefit from (provision for) income taxes

113

—

1,785

428

247

(52)

2,521

As of March 31, 2021


Goodwill

$
—

68,744

88,327

45,140

21,956

60,468

$
284,635
Assets

26,630

92,306

109,142

54,976

27,526

115,362

425,942

As of December 31, 2020


Goodwill

$
—

68,744

88,327

45,140

21,956

60,468

$
284,635
Assets

31,407

92,841

110,339

55,676

28,474

113,710

432,447

Revenues from North America customers accounted for greater than 90% of the ~~valuation techniques~~Company’s revenues for the periods presented.

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NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

(Amounts in tables in thousands, except share and per share amounts)

Note 11. Subsequent Events

The Company has evaluated events from March 31, 2021 through the date the financial statements were issued. There were no subsequent events that ~~the Company utilized to determine such fair value.~~need disclosure.

~~September 30, 2017~~

Quoted Prices Significant Other Significant Other
in Active Markets Observable Inputs Unobservable Inputs
Description (Level 1) (Level 2) (Level 3)
Cash and cash equivalents held in Trust Account $ 555,402,459 $ - $ -
~~December 31, 2016~~
Quoted Prices Significant Other Significant Other
in Active Markets Observable Inputs Unobservable Inputs
Description (Level 1) (Level 2) (Level 3)
Cash and cash equivalents held in Trust Account $ 552,263,774 $ - $ -

~~Approximately $217 and $900 of the balance in the Trust Account was held in cash as of September 30, 2017 and December 31, 2016, respectively.~~
13
22

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

~~References to “we”, “us”, “our” or~~You should read the ~~“Company” are to GTY Technology Holdings Inc., except where the context requires otherwise. The~~ following discussion ~~should be read in conjunction~~and analysis of our financial condition and results of operations together with ~~our condensed~~the financial statements and related notes ~~thereto~~that are included elsewhere in this ~~report.~~
~~Cautionary Note Regarding Forward-Looking Statements~~
~~This~~ Quarterly Report on Form 10-Q ~~includes forward-looking~~and in our Annual Report on Form 10-K filed with the SEC on February 19, 2021. Certain statements in this Quarterly Report on Form 10-Q are “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~~These statements ~~on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown~~involve a number of risks, uncertainties and ~~assumptions about us~~other factors that ~~may~~could 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 these forward-looking statements. Factors that could materially affect such forward-looking statements can be found in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and elsewhere in this Form 10-Q. Investors are urged to consider these factors carefully in evaluating any forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. ~~In some cases, you can identify~~The forward-looking statements made herein are only made as of the date hereof, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Certain statements in the following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of comprehensive income, balance sheets or statements of cash flows of the issuer; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. The Company includes non-GAAP financial measures in this Management’s Discussion and Analysis, as the Company’s management believes that these measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses and to better evaluate the Company’s ongoing business performance. In order to better align the Company’s reported results with the internal metrics used by ~~terminology such~~the Company’s management to evaluate business performance as ~~“may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or~~well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the ~~negative~~impact of purchase accounting related to the Acquisition. See “Reconciliation of Non-GAAP Revenues” below for more information and reconciliations of such ~~terms or other similar expressions. Factors that might cause or contribute~~measures to ~~such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.~~the nearest comparable GAAP measures.
Overview
We are a ~~blank check~~public sector company ~~formed~~that offers a cloud-based suite of solutions primarily for North American state and local governments. Our six wholly-owned subsidiaries are Bonfire, CityBase, eCivis, Open Counter, Questica and Sherpa. Through our operating subsidiaries, we serve some of the fastest growing segments in the ~~Cayman Islands~~government technology sector, specifically procurement, payments, grants management, permitting, and budgeting.
We were formed on August 11, 2016 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~~(the “business combination”). ~~Although we are not limited to a particular industry or geographic region for purposes of consummating a~~Until the business combination, we ~~intend~~did not engage in any operations nor generate any revenues. We recognized an opportunity to ~~focus~~replace costly legacy on-premises software systems with scalable and efficient SaaS products. Our search led to the acquisition (the “Acquisition”) of Bonfire, CityBase, eCivis, Open Counter, Questica, and Sherpa on February 19, 2019.
Our customers are primarily located in the ~~technology industry,~~United States and Canada, including ~~software~~counties, municipalities, special districts, law enforcement agencies and public school districts. We plan to increase our customer base by leveraging our comprehensive product portfolio with our existing customer base, investing in direct sales to new customers, and using relationships with complementary products and services.
We have historically signed a high percentage of agreements with new customers, as well as renewal agreements with existing customers, in the second and third quarters of each year and usually during the last month of the quarter. This can be attributed to buying patterns typical in the public sector. As the terms of most of our customer agreements are measured in full year increments, agreements initially entered into in any given month of any quarter will generally come up for

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renewal at that same time in subsequent years. This seasonality is reflected in our invoicing and cash flows with our highest collections occurring in the second and third quarters and lower collections in the first and fourth quarters.

~~All activity through September 30, 2017 relates~~Our variable consideration or usage fee revenue is also dependent on the payment patterns of our customers’ constituents. Historically, a high percentage of these usage fees have been earned in the second and fourth quarters of each year. This seasonality is also reflected in our revenues and cash flows during the respective periods.

Expansion and Further Penetration of Our Customer Base. We employ a strategy that focuses on acquiring new customers and growing our relationships with existing customers over time. We believe that significant opportunity exists for us to acquire new customers as well as expand the use of our platforms by selling additional products and increasing the number of users within our current customers’ organizations.

Investment in Growth. We plan to continue to invest in our business so that we can capitalize on our market opportunity. We intend to continue to grow our sales and marketing team to acquire new customers and to increase sales to existing customers. We intend to continue to grow our research and development team to extend the functionality and range of our applications. We also intend to invest in new and improved information technology solutions to support our business. However, we expect our sales and marketing expenses and research and development expenses as a percentage of revenues to decrease over time as we grow our revenues and gain economies of scale by increasing our customer base and increase sales to our ~~formation~~existing customer base. We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term.

Leveraging Relationships. We plan to continue to strengthen and expand our relationships with technology vendors, professional services firms, and resellers. These relationships enable us to increase the speed of deployment and offer a wider range of integrated services to our customers. We intend to support these existing relationships, seek additional relationships and further expand our channel of resellers to help us increase our presence in existing markets and to expand into new markets. Our business and results of operations will be significantly affected by whether we succeed in leveraging and expanding these relationships.

Market Adoption of Our Platforms. A key focus of our sales and marketing efforts is creating market awareness about the benefits of our cloud-based SaaS platforms. The market for SaaS solutions is less mature than the market for on-premise software applications, and potential customers may be slow or unwilling to migrate from their legacy solutions. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our solutions.

Key Components of our Results of Operations

Revenues

Subscription, support and maintenance. We deliver SaaS and provide customers with access to SaaS-related support and updates during the term of the arrangement. Revenues are recognized ratably over the contract term as the customer simultaneously receives and consumes the benefits of the subscription service. Subscription fees are typically payable within 30 days after the execution of a contract, and thereafter upon renewal. We initially record subscription fees as contract liabilities and recognize revenues on a straight-line basis over the term of the agreement.

Our contracts may include variable consideration in the form of usage fees, which are included in the transaction price in the period in which the usage occurs and the ~~initial public offering~~fee is known.

Subscription, support and ~~since~~maintenance revenues also includes kiosk rentals and on-premise support or maintenance pertaining to license sales. Revenues from kiosk rentals and on-premise support are recognized on a straight-line basis over the ~~closing~~support period.

Revenues from subscription, support and maintenance comprised approximately 77% and 68% of total revenues for the three months ended March 31, 2021 and 2020, respectively.

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Professional services. Our professional services contracts generate revenues on a time and materials, fixed fee or subscription basis. Revenues are recognized as the services are rendered for time and materials contracts. Revenues are recognized when the milestones are achieved and accepted by the customer or on a proportional performance basis for fixed fee contracts. Revenues are recognized ratably over the contract term for subscription contracts. The milestone method for revenue recognition is used when there is substantive uncertainty at the date the contract is entered into regarding whether the milestone will be achieved. Training revenues are recognized as the services are performed. Revenues from professional services comprised approximately 22% and 28% of total revenues for the three months ended March 31, 2021 and 2020.

License. Revenues from distinct licensed software are recognized upfront when that software is made available to the customer, which normally coincides with contract execution, as this is when the customer has the risks and rewards of the ~~initial public offering,~~right to use the software. Revenues from licenses comprised approximately less than 1% and 3% of total revenues for the three months ended March 31, 2021 and 2020, respectively.

Asset sales. Revenues from asset sales are recognized when the asset, typically a ~~search~~kiosk, has been received by the customer and is fully operational and ready to accept transactions, which is when the customer obtains control and has the risks and rewards of the asset. Asset sales were approximately 1% and less than 1% of total revenues for the three months ended March 31, 2021 and 2020, respectively.

Cost of Revenues

Cost of revenues primarily consists of salaries and benefits of personnel relating to our hosting operations and support, implementation, and grants research. Cost of revenues includes data center costs including depreciation of the Company’s data center assets, third-party licensing costs, consulting fees, and the amortization of acquired technology from recent acquisitions.

Operating Expenses

Sales and marketing

Sales and marketing expenses consist primarily of personnel costs of our sales and marketing employees, including salaries, sales commissions and incentives and benefits, travel and related costs, outside consulting fees, marketing programs, including lead generation, and costs of advertising and trade shows. We defer sales commissions and amortize them ratably over the expected customer life. We expect that sales and marketing expenses will increase as we expand our direct sales teams and increase sales through our strategic relationships and resellers.

Research and development

Research and development expenses consist primarily of salaries and benefits associated with our engineering, product and quality assurance personnel. Research and development expenses also include the cost of third-party contractors. Other than internal-use software development costs that qualify for capitalization, research and development costs are expensed as incurred. We expect research and development costs to increase as we develop new solutions and make improvements to our existing platforms.

General and administrative

General and administrative expenses consist primarily of salaries and benefits with our executive, finance, legal, human resources, compliance and other administrative personnel, accounting, auditing and legal professional services fees, recruitment costs, and other corporate-related expenses. We expect that general and administrative expenses will increase as we scale our business, but at a ~~business combination candidate.~~lower rate over time.

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Results of Operations

~~We consummated~~Three Months Ended March 31, 2021 Compared to the ~~initial public offering~~Three Months Ended March 31, 2020

Total revenues

Our total revenues were $13.3 million for the three months ended March 31, 2021. Excluding the $0.1 million impact of ~~55,200,000 units, including~~purchase accounting, our total non-GAAP revenues for the three months ended March 31, 2021 was $13.4 million compared to $11.6 million for the three months ended March 31, 2020, representing a 15% increase. This increase was driven by an increase in the number of customers, an increase in the number of users added by existing customers and an increase in the number of products purchased by existing customers. The change in revenues for each operating segment is provided in the following table (in thousands, except percentages):

Generally Accepted Accounting Principles (“GAAP”)

Non-GAAP

Total

Total

Increase /

Increase /

Total

Total

Increase /

Increase /


Revenues

Revenues

(Decrease)

(Decrease)

Revenues

Revenues

(Decrease)

(Decrease)

2021

2020

in Dollars

in %

2021

2020

in Dollars

in %

Procurement

$
2,437

$
1,656

$
781

47
%
$
2,437

1,665

$
772

46
%
Payments

2,229

1,899

330

17
%

2,351

2,032

319

16
%
Grants Management

1,750

1,465

285

19
%

1,750

1,480

270

18
%
Permitting

695

613

82

13
%

695

613

82

13
%
Budget

6,148

5,643

505

9
%

6,148

5,801

347

6
%
Total

$
13,259

$
11,276

$
1,983

18
%
$
13,381

$
11,591

$
1,790

15
%

A reconciliation of non-GAAP revenues and other non-GAAP financial measures is included in the section titled “Reconciliation of Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q.
Total cost of revenues
Our total cost of revenues for the three months ended March 31, 2021 increased primarily as a result of headcount additions to support our revenue growth and share-based compensation resulting from the grant of restricted stock units. The change in cost of revenues for each operating segment is due to the following (in thousands, except percentages):

`








Total Cost

Total Cost

of

of

Increase /

Increase /

Revenues

Revenues

(Decrease)

(Decrease)

2021

2020

in Dollars

in %

Procurement

$
470

$
392

$
78

20
%
Payments

1,566

1,470

96

7
%
Grants Management

650

722

(72)

(10)
%
Permitting

154

139

15

11
%
Budget

1,902

1,804

98

5
%
Total

$
4,742

$
4,527

$
215

5
%

Procurement
Procurement’s total cost of revenues increased by $0.1 million or 20% primarily due to a $0.1 million or 15% increase in salaries and wages driven by an 8% increase in average headcount from March 31, 2020 to March 31, 2021.
Payments
Payments’ total cost of revenues increased by $0.1 million or 7% primarily due to a $0.1 million increase in hardware costs resulting from an increase in asset sales.

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Grants Management

Grants Management’s total cost of revenues decreased by $0.1 million or 10% primarily due to a $0.1 million decrease in third-party contractors.

Permitting

Permitting’s total cost of revenues was materially consistent year-over-year.

Budget

Budget’s total cost of revenues increased by $0.1 million or 5% primarily due to a $0.1 million increase in share-based compensation related to the issuance of ~~7,200,000~~restricted stock units.

Operating expenses (sales and marketing, general and administrative, and research and development)

Our operating expenses (including sales and marketing, general and administrative and research and development expenses) for the three months ended March 31, 2021 have decreased due primarily to the restructuring plan implemented in March 2020. The change in operating expenses for each operating segment is due to the following (in thousands, except percentages):

Operating

Operating

Increase /

Increase /

Expenses

Expenses

(Decrease)

(Decrease)


2021

2020

in Dollars

in %

Procurement

$
2,121

$
2,556

$
(435)

(17)
%
Payments

3,054

5,019

(1,965)

(39)
%
Grants Management

1,732

1,869

(137)

(7)
%
Permitting

631

937

(306)

(33)
%
Budget

2,646

2,991

(345)

(12)
%
Corporate

1,756

2,729

(973)

(36)
%
Total

$
11,940

$
16,101

$
(4,161)

(26)
%

Procurement
Procurement’s total operating expense decreased by $0.4 million or 17% primarily due to a $0.3 million or 23% decrease in sales and marketing expenses and a $0.1 million or 13% decrease in research and development. The decrease in sales and marketing expenses was due primarily to a $0.1 million or 15% decrease in salaries and wages, a $0.1 million decrease in share-based compensation and a $0.1 million decrease in travel and trade shows resulting from the COVID-19 pandemic. The decrease in salaries and wages was due primarily to a 26% decrease in average headcount from March 31, 2020 to March 31, 2021 driven mainly by our March 2020 restructuring. The decrease in research and development was primarily due to a $0.1 million or 12% decrease in salaries and wages due to a 29% decrease in average headcount from March 31, 2020 to March 31, 2021.
Payments
Payments’ total operating expense decreased by $2.0 million or 39% primarily due to a $0.7 million or 40% decrease in research and development, a $0.6 million or 48% decrease in sales and marketing expense, and a $0.6 million or 32% decrease in general and administrative expenses. The decrease in sales and marketing expenses was due primarily to a $0.3 million decrease in share-based compensation and a $0.2 million or 25% decrease in salaries and wages. The decrease in salaries and wages related to sales and marketing was due primarily to a 23% decrease in average headcount from March 31, 2020 to March 31, 2021 driven mainly by our March 2020 restructuring. The $0.6 million decrease in general and administrative expenses was due primarily to a $0.4 million decrease in share-based compensation and a $0.2 million or 26% decrease in salaries and wages resulting from a 28% decrease in average headcount from March 31, 2020 to March 31, 2021. The $0.7 million decrease in research and development was due primarily to a $0.6 million or 39% decrease in

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salaries and wages related to a 30% decrease in average headcount from March 31, 2020 to March 31, 2021 and a $0.1 million decrease in share-based compensation.

Grants Management

Grants Management’s total operating expense decreased by $0.1 million or 7% primarily due to a $0.2 million or 34% decrease in general and administrative costs offset by a $0.1 million or 16% increase in sales and marketing expenses. The decrease in general and administrative costs was primarily due to a $0.1 million decrease in human resources and recruiting spend and a $0.1 million decrease in consulting and professional services costs. The increase in sales and marketing costs was primarily driven by a $0.1 increase in third-party commissions.

Permitting

Permitting’s total operating expenses decreased by $0.3 million or 33% primarily due a $0.2 million or 37% decrease in sales and marketing expenses and a $0.1 million or 50% decrease in general and administrative expenses. The decrease in sales and marketing is primarily due to a $0.2 million or 42% decrease in salaries and wages related to a 24% decrease in headcount resulting from the March restructuring. The $0.1 million decrease in general and administrative costs was related to a $0.1 million decrease in travel spend due to the Covid-19 pandemic.

Budget

Budget’s total operating expenses decreased by $0.3 million or 12% primarily due to a $0.2 million or 14% decrease in sales and marketing expenses and a $0.1 million or 16% decrease in general and administrative expenses. The decrease in sales and marketing expenses is primarily related to a $0.2 million or 18% decrease in salaries and wages related to a 4% decrease in average headcount from March 31, 2020 to March 31, 2021. The $0.1 million decrease in general and administrative expenses is primarily related to a $0.1 decrease in share-based compensation related to issuance of restricted stock units.

Corporate

Corporate expenses are primarily comprised of outside services including legal, accounting and consulting fees, payroll and related expenses, corporate insurance, and share-based compensation. Corporate expenses decreased by $1.0 million or 36% due primarily to a $0.5 million decrease in share-based compensation from the cancellation of restricted stock units and a $0.5 million or 62% decrease in salaries and wages. The decrease in salaries and wages is due primarily to a 41% decrease in average headcount from March 31, 2020 to March 31, 2021 driven mainly by our March 2020 restructuring.

Other operating expenses

Amortization of intangible assets

Amortization of intangible assets consists of the amortization of finite lived intangibles resulting from the Acquisition as described in Note 4 of the notes to our condensed consolidated financial statements.

Acquisition costs

Acquisition costs consists primarily of Acquisition transaction costs, capital market advisory fees, and bonuses incurred as a result of the ~~underwriters’ exercise~~transaction or a change in control.

Restructuring costs

On March 30, 2020, the Company implemented a global restructuring plan which resulted in an approximate 10% reduction of ~~their over-allotment option~~the Company’s workforce. This action was intended to streamline the Company’s operational reporting and reduce operating cash outflows. The Company recorded pre-tax restructuring charges of approximately $3.5 million which

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was comprised of one-time employee termination benefits paid over a weighted average period of approximately 10 months.

Change in ~~full (“units”~~fair value of contingent consideration

The change in fair value of contingent consideration consists of any adjustments to the contingent consideration liability since the Acquisition.

Other income (expense)

Interest income (expense)

Interest income (expense) is primarily comprised of the investments held by GTY Corporate offset by interest under the November 2020 Credit Facility.

Loss on repurchase/issuance of shares

Loss on repurchase/issuance of shares is comprised of the difference in fair value between the price in which shares are issued and the ~~Class A ordinary shares~~market value on the date of grant.

Change in fair value of warrant liability

Change in fair value between the current price of the Company’s warrants and the previously reported price.

Other income (loss)

Other income (loss) is comprised primarily of unrealized gains and losses associated with transactions in currencies that are not denominated in U.S. Dollars.

Reconciliation of Non-GAAP Revenues

To supplement our condensed consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, we have provided certain financial measures that have not been prepared in accordance with GAAP (“non-GAAP financial measures”), which include (i) non-GAAP revenues, (ii) non-GAAP gross profit and non-GAAP gross margin and (iii) non-GAAP loss from operations.

We use these non-GAAP financial measures internally in analyzing our financial results and believe that these metrics are useful to investors, as a supplement to the corresponding GAAP measure, in evaluating our ongoing operational performance and trends. However, it is important to note that particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the ~~units,~~same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the ~~“public shares”) at $10.00 per unit on November 1, 2016, generating gross proceeds~~reconciliation of ~~$552 million. We incurred offering costs~~these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Non-GAAP Revenues. Non-GAAP revenues are defined as GAAP revenues adjusted for the impact of ~~approximately $31 million, inclusive of approximately $30.4 million of underwriting fees. We paid $11.04 million of underwriting fees upon~~purchase accounting resulting from a company’s business combination which reduced its acquired contract liabilities to fair value. The Company believes that presenting non-GAAP revenues is useful to investors as it eliminates the ~~closing~~impact of the ~~initial public offering~~purchase accounting adjustments to revenues to allow for a direct comparison between current and ~~deferred $19.32 million~~future periods.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP gross profit adjusted for the impact of ~~underwriting fees until the consummation of the initial business combination.~~

~~Simultaneously with the closing of the initial public offering, we consummated the private placement (“private placement”) of 8,693,334 warrants (the “private placement warrants”) at~~purchase accounting resulting from a ~~price of $1.50 per private placement warrant with our sponsor, GTY Investors, LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of approximately $13.04 million.~~

Upon the closing of the initial public offering and private placement on November 1, 2016, $552 million from the net proceeds of the sale of the units in the initial public offering and the private placement was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”). The funds in the Trust Account were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with maturities of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of an initialcompany’s business combination and ~~(ii)~~share-based compensation included in cost of revenues. Non-GAAP gross margin is defined as non-GAAP gross profit divided by non-GAAP revenues. The Company believes that presenting non-GAAP gross profit and margin is useful to investors as it eliminates the ~~distribution~~impact of the ~~funds in~~purchase accounting adjustments to allow for a direct comparison between periods.

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Non-GAAP Loss from Operations. Non-GAAP loss from operations is defined as GAAP loss from operations adjusted for the ~~Trust Account.~~

~~Our management has broad discretion with respect~~impact of purchase accounting to revenues resulting from a company’s business combination, the ~~specific application~~amortization of ~~the net proceeds of the initial public offering~~acquired intangible assets, share-based compensation, acquisition related costs, goodwill impairment expense, restructuring charges and the ~~private placement, although substantially~~change in fair value of contingent consideration. The Company believes that presenting non-GAAP loss from operations is useful to investors as it eliminates the impact of certain non-cash and acquisition related expenses to allow a direct comparison of loss from operations between all periods presented.

Below is a reconciliation of ~~the net proceeds are intended~~non-GAAP revenues, non-GAAP gross profit and non-GAAP gross margin and non-GAAP loss from operations to ~~be applied toward consummating an initial business combination.~~their most directly comparable GAAP financial measures (in thousands, except percentages):

Three Months Ended

March 31,

December 31,

March 31,


2021

2020

2020

Revenues

$
13,259

$
13,101

$
11,276

Purchase accounting adjustment to revenue

122

126

315

Non-GAAP Revenues

$
13,381

$
13,227

$
11,591

Gross Profit

$
8,517

$
8,174

$
6,749

Purchase accounting adjustment to revenue

122

126

315

Share-based compensation

292

236

218

Non-GAAP Gross Profit

$
8,931

$
8,536

$
7,282

Gross Margin

64
%

62
%

60
%
Non-GAAP Gross Margin

67
%

65
%

63
%

Loss from operations

$
(8,136)

$
(11,125)

$
(16,520)

Purchase accounting adjustment to revenue

122

126

315

Amortization of intangibles

3,599

3,683

3,673

Share-based compensation

1,823

2,283

3,295

Goodwill impairment expense

—

2,000

—

Restructuring charges

—

—

3,466

Change in fair value of contingent consideration

1,114

1,951

29

Non-GAAP Loss from operations

$
(1,478)

$
(1,082)

$
(5,742)

If we are unable to complete an initial business combination within 24 months from the closing of the initial public offering (the “Combination Period”), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding public shares which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of our company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

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Three Months Ended March 31,


2021

2020

Revenues

13,259

11,276

Purchase accounting adjustment to revenue

122

315

Non-GAAP Revenues

$
13,381

$
11,591

Gross Profit

8,517

6,749

Purchase accounting adjustment to revenue

122

315

Share-based compensation

292

218

Non-GAAP Pro forma as Adjusted Gross Profit

$
8,931

$
7,282

Gross Margin

64
%

60
%
Non-GAAP Gross Margin

67
%

63
%

Loss from operations

$
(8,136)

$
(16,520)

Purchase accounting adjustment to revenue

122

315

Amortization of intangibles

3,599

3,673

Share-based compensation

1,823

3,295

Restructuring charges

—

3,466

Change in fair value of contingent consideration

1,114

29

Non-GAAP Loss from operations

$
(1,478)

$
(5,742)

~~Critical Accounting Policy~~Below is a reconciliation of non-GAAP revenues to revenues by operating segment:

Three Months Ended March 31,

Grants

Total


Procurement

Payments

Management

Permitting

Budget

Revenues

Revenues 2021

$
2,437

$
2,229

$
1,750

$
695

$
6,148

$
13,259

Purchase accounting adjustment to revenues

—

122

—

—

—

122

Non-GAAP Revenues 2021

$
2,437

$
2,351

$
1,750

$
695

$
6,148

$
13,381

Revenues 2020

$
1,656

$
1,899

$
1,465

$
613

$
5,643

$
11,276

Purchase accounting adjustment to revenues

9

133

15

—

158

315

Non-GAAP Revenues 2020

$
1,665

$
2,032

$
1,480

$
613

$
5,801

$
11,591

% change

46
%

16
%

18
%

13
%

6
%

15
%
~~Ordinary Shares Subject to Possible Redemption~~
~~We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “~~~~Distinguishing Liabilities from Equity~~”. Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption at redemption value are presented as temporary equity, outside of the shareholders’ equity section of our accompanying balance sheets.

Liquidity and Capital Resources
As ~~indicated in the accompanying financial statements, at September 30, 2017,~~of March 31, 2021, we had a cash balance of ~~cash and cash equivalents~~approximately $17.9 million. From the date of ~~approximately $667,000, which excludes interest income available to us for tax obligations of approximately $3.4 million from our investments in~~ the ~~Trust account. We expect to continue to incur significant costs in pursuit of our initial business combination plans.~~
~~Through September 30, 2017,~~Acquisition through March 31, 2021, our liquidity needs ~~were~~have been satisfied ~~prior to~~through proceeds from the ~~completion of the~~January–February 2020 PIPE transactions, proceeds from our initial public offering ~~through receipt of a $25,000 capital contribution~~that were released in February 2019 from ~~our Sponsor in exchange for the issuance of the founder shares to the Sponsor and the gross proceeds of the private placement of $13.04 million.~~
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account holding the net proceeds of the initial public offering (less taxes payable and deferred underwriting commissions) to complete our initial business combination. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account ~~will be used as working capital to finance~~established in connection such offering for the ~~operations~~benefit of our shareholders, proceeds from our June 2019 registered direct offering, proceeds from our February 2020 and November 2020 credit facilities, proceeds from issuance of stock under our ATM agreement, and loan proceeds in April–May 2020 from the ~~target business or businesses, make other acquisitions and pursue our growth strategies.~~Paycheck Protection Program.
~~We do not believe~~Our unaudited condensed consolidated financial statements have been prepared assuming that we will ~~need~~continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

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We are attempting to further expand our customer base, scale up production of various products; and increase revenues; however, our cash position may not be sufficient to support our daily operations through the next twelve months from the date of filing this 10-Q. Our ability to continue as a going concern is dependent upon our ability to raise additional funds by way of a public or private offering and our ability to further generate sufficient revenues. While we believe in ~~order~~the viability of our platforms, and in our ability to ~~meet~~raise additional funds by way of a public or private offering, there can be no assurances to that effect.

COVID-19 Update

In December 2019, the ~~expenditures required~~emergence of a novel coronavirus, or COVID-19, was reported and in March 2020, the World Health Organization, or WHO, characterized COVID-19 as a pandemic. We responded by immediately restricting non-essential travel and enabled work-from-home protocols. Shortly thereafter, and in line with guidance provided by government agencies and international organizations, we restricted all travel, mandated a work-from-home policy across our global workforce, and moved all in-person customer-facing events to virtual ones. We expect these restrictions to stay in effect during the second quarter of 2021. We also responded by launching the GTY COVID Emergency Response Program, where a number of GTY products were offered free for ~~operating~~a few months to allow our customers to move quickly to solve their infrastructure problems and prevent interruption to government services.

As a result of the pandemic, we have seen purchasing decisions being deferred or delayed, delays in services revenue due to the delayed implementation of projects, and an impact on new business pipeline and large deals. We have also seen a decrease in travel-related expenses and advertising and trade show expenses. We expect to see similar impacts in 2021.

The broader implications of the global emergence of COVID-19 on our business, ~~prior to our initial business combination. However, if our estimates~~operating results, and overall financial performance remain uncertain and they depend on certain developments, including the duration and spread of the ~~costs~~outbreak, impact on our customers and our sales cycles, impact on our partners or employees, and impact on the economic environment and financial markets, all of ~~identifying a target~~which are uncertain and cannot be predicted. We are conducting business ~~undertaking in-depth due diligence~~as usual with certain limitations to employee travel, employee work locations, and ~~negotiating an initial~~marketing events, among other modifications. We have observed other companies taking precautionary and preemptive actions to address COVID-19, and the effects it has had and is expected to have on business ~~combination are less than~~and the ~~actual amount necessary to do so,~~economy. Since March 2020, we ~~may~~ have ~~insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies~~seen certain new and existing customers halt or ~~finance transaction costs~~decrease investment in ~~connection with an intended initial business combination, our Sponsor or an affiliate of our Sponsor or~~infrastructure, and we expect that certain of our ~~officers~~current and ~~directors~~potential customers will take actions to reduce operating expenses and moderate cash flows, including by delaying sales and requesting extended billing and payment terms. We will continue to actively monitor the situation and may ~~but are not obligated to, loan us funds~~take further actions that alter our business operations, as may be ~~required. If~~required by federal, state, or local authorities, or that we ~~complete our initial business combination, we would repay such loaned amounts. In~~determine are in the event that our initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completionbest interests of our ~~initial business combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate~~employees, customers, partners, suppliers, and stockholders.

Historical Cash Flows

The following table sets forth a summary of our ~~Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.~~cash flows for the periods indicated:

Three Months Ended

Three Months Ended

March 31,

March 31,


2021

2020

Net cash used in operating activities

$
(3,406)

$
(10,269)

Net cash used in investing activities

$
(31)

$
(1,111)

Net cash provided by (used in) financing activities

$
(1,418)

$
11,317

~~Results of Operations~~
Net Cash Used In Operating Activities
Our ~~entire~~net loss and cash flows from operating activities ~~since August 11, 2016 (inception) up~~are significantly influenced by the Acquisition and our investments in headcount and infrastructure to September 30, 2017 was in preparation for our initial public offering and, since the closing of the initial public offering, a search for a prospective initial business combination candidate. We will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
support anticipated growth.
For the three months ended ~~September 30, 2017, we had~~March 31, 2021, net ~~income~~cash used in operations was $(3.4) million resulting from our net loss of ~~approximately $1.3~~$18.0 million ~~which consisted solely~~and changes in operating assets and liabilities of ~~operating~~$1.7 million, offset by net non-cash expenses of ~~approximately $144,000 and offset by interest income from our Trust Account~~$16.4 million. The $16.4 million of ~~approximately $1.4 million.~~
~~For~~non-cash expenses was comprised of a $5.3 million loss associated with the ~~nine months ended September 30, 2017, we had net income~~redemption of ~~approximately $2.6 million, which consisted solely of operating expenses of approximately $570,000 and offset by interest income from our Trust Account of approximately $3.1 million.~~
For the period from August 11, 2016 (inception) up to September 30, 2016, we had net losses of approximately $17,000, which consist of formation and operating costs. We incurred offering costs of $180,000 with regard to the Initial Public Offering, which are classified as deferred offering costs on the balance sheet as of September 30, 2016.
15
32

~~Related Party Transactions~~

~~Founder Shares~~

~~In August 2016, we issued 8,625,000 shares~~Table of ~~Class B ordinary shares to the Sponsor~~Contents

common stock, $4.0 million change in ~~exchange for a capital contribution~~fair value of ~~$25,000. On each~~warrant liability, $3.6 million of ~~October 14 and October 26, 2016, we effected a share capitalization resulting in an aggregate~~amortization of 11,500,000 and 13,800,000 founder shares outstanding, respectively. The 13,800,000 founder shares include an aggregate of up to 1,800,000 shares that would be surrendered to us for no consideration by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full, so that the initial shareholders will collectively own 20% of our issued and outstanding ordinary shares after the initial public offering. Asintangible assets acquired as a result of the ~~underwriters’ exercise~~Acquisition, $1.8 million from share-based compensation resulting from our issuance of ~~their over-allotment option on November 1, 2016, no founder shares were surrendered to us~~stock options and restricted stock units and a $1.1 million change in contingent consideration, offset by ~~the Sponsor.~~

~~In October 2016, the Sponsor transferred 25,000 founder shares to each~~$0.2 million of our independent director nominees at the same per-share purchase price paid by the Sponsor. The foregoing transfers of founder shares were made in reliance upon an exemption from the registration requirements of the Securities Act pursuant to the so-called 4(a)(1)-½ exemption. The founder shares will automatically convert into Class A ordinary shares upon the consummation of an initial business combination on a one-for-one basis, subject to adjustments. In the case that additional Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts offered in our final prospectus anddeferred tax benefits related to the ~~closing~~tax and book basis difference on the amortization of intangible assets and $0.2 million gain on extinguishment of debt. The changes in operating assets and liabilities of $(1.7) million was comprised primarily of a $1.5 million increase in prepaid expenses and other assets, a $0.8 million decrease in accounts payable and accrued liabilities, and a $0.8 million increase in accounts receivable, offset by a $1.7 million increase in deferred revenue and other long-term liabilities.

For the three months ended March 31, 2020, net cash used in operations was $10.3 million resulting from our ~~initial business combination, the ratio at which founder shares will convert into Class A ordinary shares will be adjusted so that the number~~net loss of ~~Class A ordinary shares issuable upon conversion~~$17.4 million and changes in operating assets and liabilities of ~~all founder shares will equal, in the aggregate 20%~~$1.6 million and offset by net non-cash expenses of $8.7 million. The $8.7 million of non-cash expenses was comprised of $3.7 million of amortization of intangible assets acquired as a result of the ~~sum~~Acquisition, a $3.3 million from share-based compensation, a $2.1 million loss on issuance of ~~the ordinary shares outstanding upon the completion of the initial public offering plus the number of Class A ordinary~~ shares, and ~~equity-linked shares issued or deemed issued~~$1.6 million change in ~~connection~~fair value of warrant liability, and offset by $2.5 million of deferred tax benefits related to the tax and book basis difference on the amortization of intangible assets. The changes in operating assets and liabilities of $1.6 million was comprised primarily of a $1.1 million increase in prepaid expenses and other assets associated with the ~~initial business combination (net~~payments for insurance premiums, letters of ~~redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or~~credit required by certain customers and software subscription payments.

Net Cash Used In Investing Activities

Our primary investing activities have consisted of capital expenditures.

For the three months ended March 31, 2021, cash used in investing activities was less than $0.1 million resulting from capital expenditures.

For the three months ended March 31, 2020, cash used in investing activities was $1.1 million resulting from $1.1 million of capital expenditures associated with lease improvements and furniture purchases at Questica’s new facility.

Net Cash Provided By (Used in) Financing Activities

For the three months ended March 31, 2021, cash used in financing activities was $(1.4) million primarily due to ~~be issued, to any seller in the initial business combination and any private placement warrants issued to the Sponsor.~~

The Sponsor, officers and directors have agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees) until the earlier to occur of (i) one year after the completion of an initial business combination, or earlier if, subsequent to an initial business combination, the closing price of the Class A ordinary shares equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing 150 days after the completion of an initial business combination and (ii) the date following the completion of an initial business combination on which we complete a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

~~Private Placement Warrants~~

Concurrently with the closing of the initial public offering, the Sponsor purchased an aggregate of 8,693,334 private placement warrants at $1.50 per private placement warrants, generated gross proceeds of $13.04$8.0 million in ~~the private placement.~~

~~Each private placement warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. A portion~~redemptions of ~~the proceeds from sale of the private placement warrants was added to the~~common shares offset by $6.8 million in proceeds from the ~~initial public offering~~issuance of common stock.

For the three months ended March 31, 2020, cash provided by financing activities was $11.3 million primarily due to ~~be held~~$11.5 million of proceeds from the issuance of our term loan, net of issuance costs and offset by $0.2 million in ~~the Trust Account. If we do not complete an initial business combination within the Combination Period, the private placement warrants will expire worthless.~~repayments of finance lease obligations and contingent consideration payments.

~~Due to Related Party~~Critical Accounting Policies and Use of Estimates

Our Sponsor loaned us in the form of a promissory note up to $200,000 to be used for the payment of costs related to the initial public offering. The loan was non-interest bearing, unsecured and due upon the closingSee Note 3 of the ~~initial public offering. We paid off all outstanding amount~~notes to ~~the Sponsor~~our unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

The impact of recently issued accounting standards is set forth in ~~December 2016.~~

~~In addition, in order to finance transaction costs in connection with an initial business combination, our Sponsor or an affiliate~~Note 3, Summary of Significant Accounting Policies, of the 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 an initial business combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that an initial 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 an initial business combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant. The warrants would be identical to the private placement warrants.

~~Administrative Service Reimbursement~~

We have agreed to reimburse the Sponsor in an amount not to exceed $10,000 per month for office space, and secretarial and administrative services, commencing on the effective date of the initial public offering through the earlier of our consummation of an initial business combination or our liquidation. We recognized $30,000 and $90,000, respectively, for the three and nine months ended September 30, 2017 in connection with this agreement in the accompanying statements of operations. As of September 30, 2017, we had a total of $110,000 in administrative fees payablenotes to our ~~Sponsor.~~

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect~~condensed consolidated financial statements included elsewhere in this Quarterly Report on ~~the Company's financial statements.~~

~~Contractual Obligations~~

~~Registration Rights~~

The holders of the founder shares and private placement warrants and warrants that maybe 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 rights agreement to be signed prior to or on the effective date of the initial public offering. 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 consummation of a business combination. However, the registration 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.

~~Underwriting Agreement~~

We granted the underwriters a 45-day option from October 26, 2016 to purchase up to 7,200,000 additional units to cover over-allotments, if any, at the initial public offering price less the underwriting discounts and commissions, which was fully exercised on November 1, 2016.

We paid an underwriting discount of $0.20 per unit, or $11.04 million in the aggregate, upon the consummation of the initial public offering. $0.35 per unit, or $19.32 million in the aggregate will be payable to the underwriters for deferred underwriting fees. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement.

Form 10-Q.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

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Contractual Obligations and Commitments

As of ~~September 30, 2017, we did not have any off-balance sheet arrangements~~March 31, 2021, there were no significant changes to our contractual obligations from those presented as ~~defined~~of December 31, 2020 in ~~Item 303(a)(4)(ii) of Regulation S- K and did not have any commitments or contractual obligations.~~

~~JOBS Act~~

~~On April 5, 2012,~~our Current Report on Form 10-K filed with 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 revised accounting pronouncements basedSEC on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on 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.February 19, 2021.

Item 3.   Quantitative and Qualitative Disclosures About Market ~~Risk~~Risks
~~As of September 30, 2017, we~~During the three months ended March 31, 2021, there were ~~not subject~~no material changes to ~~any market or~~our interest rate ~~risk. Following~~risk disclosures, market risk disclosures and foreign currency exchange rate risk disclosures reported in our Current Report Form 10-K filed with the ~~consummation of our initial public offering,~~SEC on February 19, 2021 for 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 with a maturity of 180 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we do not believe that there will be an associated material exposure to interest rate risk.year ended December 31, 2020.
17
Item 4.   Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our co-principal executive officers and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosureWe maintain “disclosure controls and procedures, ~~as of the end of the fiscal quarter ended September 30, 2017,~~” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act. Based on this evaluation, our Co-Chief Executive Officers and Chief Financial Officer have concluded~~Act of 1934, as amended (the “Exchange Act”), that ~~during the period covered by this report, our disclosure controls and procedures were effective.~~
~~Disclosure controls and procedures~~ are designed to ensure that information required to be disclosed by us in ~~our~~reports that we file or submit under the Exchange Act ~~reports~~ is recorded, processed, summarized, and reported within the time periods specified in ~~the SEC’s~~Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our ~~principal executive officer~~Principal Executive Officer and ~~principal financial officer or persons performing similar functions, as appropriate~~our Principal Financial Officer, to allow timely decisions regarding required disclosure.
The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With respect to the quarter ended March 31, 2021, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective.
Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

During the quarter ended March 31, 2021 and in response to the SEC Statement on April 12, 2021, the Company has identified a material weakness associated with its accounting for warrants. The Company inappropriately relied upon the broad consensus among special purpose acquisition companies that these warrants were subject to equity treatment under a fixed accounting model. However, consistent with the SEC Statement, the Company revised its historical financial statements to account for the private warrants as liabilities. The Company is in the process of implementing new policies to remediate the material weakness mainly the adoption of new policies and procedures associated with the accounting of non-routine and complex transactions.

Changes in Internal Control over Financial Reporting
~~There~~We are taking actions to remediate the material weakness relating to our internal control over financial reporting, as described above.  Except as otherwise described herein, there was no change in our internal control over financial reporting that occurred during the ~~fiscal quarter ending September 30, 2017~~period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Notwithstanding the identified material weaknesses, management has concluded that the consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material respects, the Company's financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. generally accepted accounting principles (U.S. GAAP).

PART IIII. OTHER INFORMATION

Item 1.Legal Proceedings
On March 19, 2021, the Company received a request from the Securities and Exchange Commission (the “SEC”) for documents relating to the Company’s business combination consummated on February 19, 2019 and related transactions, including those described in a Form 8-K filed by the Company on February 14, 2019. The Company is cooperating in the SEC’s investigation and intends to continue to do so.
~~None.~~

Item 1A.Risk Factors

~~As of the date of this Report, there have been no material changes to the risk factors disclosed~~The reader should carefully consider, in ~~our prospectus dated October 26, 2016, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings~~connection with the ~~SEC.~~other information in this Quarterly Report on Form 10-Q, the factors discussed in the section entitled “Risk Factors” of our 2020 Annual Report on Form 10-K. These factors could cause our actual results to differ materially from those stated in forward-looking statements contained in this document and elsewhere.

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

None

In August, 2016, the Sponsor purchased 8,625,000 Class B ordinary shares (“founder shares”) for an aggregate purchase price of $25,000. On each of October 14 and October 26, 2016, the Company effected a share capitalization resulting in an aggregate of 11,500,000 and 13,800,000 founder shares outstanding, respectively. In October 2016, the Sponsor transferred 25,000 founder shares to each of the Company’s independent director nominees at the same per-share purchase price paid by the Sponsor. Simultaneously with the closing of the initial public offering, the Company consummated the private placement of 8,693,334 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per private placement warrant with the Sponsor, generating gross proceeds of approximately $13.04 million. The sales of the above securities by the Company were deemed to be exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On November 1, 2016, we consummated our initial public offering of 55,200,000 units, including the issuance of 7,200,000 units as a result of the underwriters’ exercise of their over-allotment option in full. Each unit consists of one Class A ordinary share of the Company, par value $0.0001 per share, and one-third of one warrant to purchase one Class A Ordinary Share. Citigroup Global Markets Inc. and I-Bankers Securities, Inc. acted as underwriters for the offering, with Citigroup Global Markets Inc. acting as sole book-running manager. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $552 million. Following the closing of the initial public offering and the private placement, an aggregate of $552 million was placed in the Trust Account.

The Company incurred approximately $31,060,000 of offering costs in connection with the initial public offering, inclusive of $19.32 million in deferred underwriting commissions payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes a business combination. There has been no material change in the planned use of proceeds from the initial public offering as described in our final prospectus dated October 26, 2016 which was filed with the SEC.

~~Item 3. Defaults Upon Senior Securities~~

~~None.~~

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~~Item 4. Mine Safety Disclosures~~

~~None.~~

~~Item 5. Other Information~~

~~None.~~

Item 6.Exhibits.

~~Exhibit~~ ~~Number~~		~~Description~~
~~31.1~~ ExhibitNumber		Description
10.1		Amended and Restated Employment Agreement dated April 15, 2021 between the Company and David Farrell.

10.2		Amended and Restated Employment Agreement dated April 29, 2021 between the Company and John Curran.

31.1		Certification of ~~Co-Chief~~Chief Executive Officer ~~(Co-Principal~~(Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of ~~Co-Chief Executive~~Chief Financial Officer ~~(Co-Principal Executive~~(Principal Financial Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.3~~ 32.1		Certification of Chief ~~Financial~~Executive Officer (Principal ~~Financial and Accounting 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~~		~~Certification of Co-Chief Executive Officer (Co-Principal~~ Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of ~~Co-Chief Executive~~Chief Financial Officer ~~(Co-Principal Executive~~(Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~32.3~~ 101.INS		~~Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101)

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this ~~13th~~13^th day of ~~November, 2017.~~May, 2021.

GTY TECHNOLOGY HOLDINGS INC.

	/s/ ~~William D. Green~~TJ Parass
	Name:	~~William D. Green~~ TJ Parass
	Title:	~~Co-Chief~~ Chief Executive Officer
		(~~Co-Principal~~Principal Executive Officer)

	/s/ ~~Harry L. You~~John Curran
	Name:	~~Harry L. You~~ John Curran
	Title:	Chief Financial Officer
		(Principal Financial ~~and Accounting~~ Officer)

~~Cayman Islands~~		~~001-37931~~	~~N/A~~
Massachusetts	001-37931	83-2860149
(State or other jurisdiction of incorporation)	(Commission File Number)	~~(Commission~~	(IRS Employer
~~of incorporation)~~		~~File Number)~~	Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, par value $0.0001 per share	GTYH	Nasdaq Stock Market LLC

Large accelerated filer	¨ ◻	Accelerated filer	¨ ◻
Non-accelerated filer ~~(Do not check if smaller reporting company)~~	x ☒	Smaller reporting company	¨ ☒
Emerging growth company	x ☒

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	~~Interim~~ Financial Statements ~~(Unaudited)~~	3

	Unaudited Condensed Consolidated Balance Sheets ~~as of September 30, 2017 (Unaudited) and December 31, 2016~~	3

	Unaudited Condensed ~~Interim~~Consolidated Statements of Operations ~~for the three~~ and ~~nine months ended September 30, 2017 and for the period from August 11, 2016 (Inception) through September 30, 2016~~Comprehensive Loss	4

	UnauditedCondensed ~~Interim Statement~~Consolidated Statements of Changes in Shareholders’ Equity	5

	Unaudited Condensed Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2017 and for the period from August 11, 2016 (Inception) through September 30, 2016~~	5 6

	Notes to Unaudited Condensed ~~Interim (Unaudited)~~Consolidated Financial Statements	6 8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17 34

Item 4.	Controls and Procedures	18 34

PART II. OTHER INFORMATION		35

Item 1.	Legal Proceedings	18 35

Item 1A.	Risk Factors	18 35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18 35

~~Item 3.~~	~~Defaults Upon Senior Securities~~	18

~~Item 4.~~	~~Mine Safety Disclosures~~	19

~~Item 5.~~	~~Other Information~~	19

Item 6.	Exhibits	19 36


	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


	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	17,936	$	22,800
Accounts receivable, net		10,752		9,994
Prepaid expenses and other current assets		3,855		2,583
Total current assets		32,543		35,377

Property and equipment, net		3,651		3,891
Finance lease right of use assets		1,330		1,355
Operating lease right of use assets		2,539		2,610
Intangible assets, net		97,508		101,107
Goodwill		284,635		284,635
Other assets		3,736		3,472
Total assets	$	425,942	$	432,447

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	5,556	$	6,366
Deferred revenue - current portion		23,345		22,304
Finance lease liability - current portion		580		581
Operating lease liability - current portion		1,133		1,316
Contingent consideration - current portion		729		743
Total current liabilities		31,343		31,310

Deferred revenue - less current portion		2,236		1,602
Warrant liability		7,078		3,040
Deferred tax liability		17,144		17,494
Contingent consideration - less current portion		43,630		42,530
Term loans, net		26,694		26,632
Finance lease liability - less current portion		5		147
Operating lease liability - less current portion		2,916		2,927
Total liabilities		131,046		125,682

Commitments and contingencies

Shareholders’ equity:
Common stock		6		6
Exchangeable shares		50,637		54,224
Additional paid in capital		393,082		380,881
Accumulated other comprehensive income		261		6
Treasury stock		(8,343)		(5,633)
Accumulated deficit		(140,747)		(122,719)
Total shareholders' equity		294,896		306,765
Total liabilities and shareholders’ equity	$	425,942	$	432,447

	September 30, 2017		December 31, 2016
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	667,163	$	1,219,822
Prepaid expenses		52,118		21,164
Total current assets		719,281		1,240,986

Cash and cash equivalents held in Trust Account		555,402,459		552,263,774
Total Assets	$	556,121,740	$	553,504,760

Liabilities and Shareholders' Equity
Accounts payable and accrued expenses	$	25,913	$	68,739
Accrued expenses - related party		110,000		20,000
Total current liabilities		135,913		88,739
Deferred underwriting fees		19,320,000		19,320,000
Total Liabilities		19,455,913		19,408,739

Commitments
Class A ordinary shares subject to possible redemption, $0.0001 par value; 53,166,582 and 52,909,602 shares at redemption value at September 30, 2017 and December 31, 2016, respectively		531,665,820		529,096,020

Shareholders' Equity:
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding		-		-
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 2,033,418 and 2,290,398 shares issued and outstanding (excluding 53,166,582 and 52,909,602 shares subject to possible redemption) at September 30, 2017 and December 31, 2016, respectively		203		229
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 13,800,000 and 13,800,000 shares issued and outstanding at September 30 and December 31, 2016, respectively		1,380		1,380
Additional paid-in capital		2,364,674		4,934,449
Retained earnings		2,633,750		63,943
Total Shareholders' Equity		5,000,007		5,000,001
Total Liabilities and Shareholders' Equity	$	556,121,740	$	553,504,760



	Three Months Ended		Three Months Ended
	March 31,		March 31,
	2021		2020
Revenues	$	13,259	$	11,276
Cost of revenues		4,742		4,527
Gross Profit		8,517		6,749

Operating expenses
Sales and marketing		3,762		4,854
General and administrative		5,193		7,449
Research and development		2,985		3,798
Amortization of intangible assets		3,599		3,673
Restructuring charges		—		3,466
Change in fair value of contingent consideration		1,114		29
Total operating expenses		16,653		23,269
Loss from operations		(8,136)		(16,520)

Other income (expense)
Interest expense, net		(859)		(236)
Loss from repurchase/issuance of shares		(5,333)		(2,056)
Change in fair value of warrant liability		(4,038)		(1,563)
Other income, net		168		499
Total other income (expense), net		(10,062)		(3,356)

Loss before income taxes		(18,198)		(19,876)
Benefit from income taxes		170		2,521
Net loss		(18,028)		(17,355)

Net loss per share, basic and diluted	$	(0.32)	$	(0.33)
Weighted average common shares outstanding, basic and diluted		55,828		52,575

Net loss	$	(18,028)	$	(17,355)
Other comprehensive gain:
Foreign currency translation gain		255		2,049
Total other comprehensive gain		255		2,049
Comprehensive loss	$	(17,773)	$	(15,306)

	For the Three Months Ended			For the Nine Months Ended,			For the Period from August 11, 2016 (Inception) through
	September 30, 2017			September 30, 2017			September 30, 2016
General and administrative expenses	$	143,531		$	569,237		$	16,684
Loss from operations		(143,531	)		(569,237	)		(16,684	)
Interest income		1,426,226			3,139,044			-
Net income (loss)	$	1,282,695		$	2,569,807		$	(16,684	)

Weighted average shares outstanding
Basic^{(1) (2)}		15,960,293			16,033,767			12,000,000
Diluted⁽²⁾		69,000,000			69,000,000			12,000,000

Net earnings (loss) per share
Basic	$	0.08		$	0.16		$	(0.00	)
Diluted	$	0.02		$	0.04		$	(0.00	)


													Accumulated
							Additional						Other		Total
	Common Stock			Exchangeable Shares			Paid in		Treasury		Accumulated		Comprehensive		Shareholders’
	Shares	Amount		Shares	Amount		Capital		Stock		Deficit		Income		Equity
Balance - December 31, 2020	55,570,282	$	6	5,972,779	$	54,224	$	390,232	$	(5,633)	$	(129,030)	$	6	$	309,805
Adjustment for correction of an error - warrant liability	—		—	—		—		(9,351)		—		6,311		—		(3,040)
Balance - December 31, 2020, as adjusted	55,570,282		6	5,972,779		54,224		380,881		(5,633)		(122,719)		6		306,765
Net loss	—		—	—		—		—		—		(18,028)		—		(18,028)
Foreign currency translation gain	—		—	—		—		—		—		—		255		255
Share-based compensation	—		—	—		—		1,823		—		—		—		1,823
Issuance of common stock	935,633		—	—		—		6,790		—		—		—		6,790
Common stock repurchases	(525,060)		—	—		—		—		(2,710)		—		—		(2,710)
Common stock issued for exchangeable shares	358,658		—	(358,658)		(3,587)		3,587		—		—		—		—
Vested and issued restricted stock units	1,095,689		—	—		—		—		—		—		—		—
Stock option exercises	792		—	—		—		1		—		—		—		1
Balance - March 31, 2021	57,435,994	$	6	5,614,121	$	50,637	$	393,082	$	(8,343)	$	(140,747)	$	261	$	294,896

	For the Nine Months Ended September 30, 2017			For the Period from August 11, 2016 (Inception) through September 30, 2016
Cash Flows from Operating Activities
Net income (loss)	$	2,569,807		$	(16,684	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Formation and operating costs paid by Sponsor		-			5,726
Interest earned on cash and cash equivalents held in Trust Account		(3,138,686	)		-
Changes in operating assets and liabilities:
Prepaid expenses		(30,954	)		-
Accounts payable		(42,826	)		10,958
Accrued expenses - related party		90,000			-
Net cash used in operating activities		(552,659	)		-

Net change in cash and cash equivalents		(552,659	)		-

Cash and cash equivalents- beginning of the period		1,219,822			-
Cash and cash equivalents - ending of the period	$	667,163		$	-

Supplemental disclosure of noncash investing and financing activities:
Change in value of Class A ordinary shares subject to possible redemption	$	2,569,800		$	-
Formation and offering costs paid by Sponsor in exchange for founder shares	$	-		$	25,000
Deferred offering costs included in accounts payable and accrued expenses	$	-		$	67,845
Deferred offering costs paid by Sponsor	$	-		$	91,992


	Quarter Ended March 31, 2020
	As Previously Reported		Adjustments		As Revised
Change in fair value of warrant liability	$	—	$	1,563	$	1,563
Net loss	$	15,792	$	1,563	$	17,355
Comprehensive loss	$	13,743	$	1,563	$	15,306
Net loss per share, basic and diluted	$	(0.30)	$	(0.03)	$	(0.33)


			Fair Value Measurement at
			Reporting Date Using
			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Balance as of		for Identical		Observable		Unobservable
	March 31,		Assets		Inputs		Inputs
	2021		(Level 1)		(Level 2)		(Level 3)
Contingent consideration – current	$	729	$	—	$	—	$	729
Contingent consideration – long term		43,630		—		—		43,630
Warrant liability		7,078		—		—		7,078
Total liabilities measured at fair value	$	51,437	$	—	$	—	$	51,437


Contingent consideration – December 31, 2020	$	43,273
Change in fair value of contingent consideration		1,114
Payments of contingent consideration		(28)
Contingent consideration – March 31, 2021	$	44,359


Warrant liability – December 31, 2020	$	3,040
Change in fair value of warrant liability		4,038
Warrant liability – March 31, 2021	$	7,078


	2021	2020
Warrants to purchase common stock	27,093,334	27,093,334
Unvested restricted stock units	3,173,584	4,022,110
Options to purchase common stock	245,112	261,027
Total	30,512,030	31,376,471


	March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents / Developed Technology	$	60,084	$	(15,878)	$	44,206
Trade Names / Trademarks		16,348		(3,623)		12,725
Customer Relationships		51,003		(10,770)		40,233
Non-Compete Agreements		1,162		(818)		344
Total Intangibles	$	128,597	$	(31,089)	$	97,508


	December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Patents / Developed Technology	$	60,084	$	(14,026)	$	46,058
Trade Names / Trademarks		16,348		(3,227)		13,121
Customer Relationships		51,003		(9,514)		41,489
Non-Compete Agreements		1,162		(723)		439
Total Intangibles	$	128,597	$	(27,490)	$	101,107


Nine months ended December 31, 2021		11,012
Year ended December 31, 2022		14,276
Year ended December 31, 2023		14,224
Year ended December 31, 2024		14,263
Year ended December 31, 2025		14,224
Thereafter		29,509
	$	97,508


					Grants
	Procurement		Payments		Management		Budget		Total
Finance lease cost
Amortization of right-of-use assets	$	—	$	15	$	—	$	—	$	15
Interest		—		26		—		—		26
Operating lease cost		114		115		20		109		358
Total lease cost	$	114	$	156	$	20	$	109	$	399


					Grants				Operating		Finance
	Procurement		Payments		Management		Budget		Leases		Leases
Nine months ended December 31, 2021	$	365	$	343	$	90	$	318	$	1,026	$	439
Year Ended December 31, 2022		247		—		123		430		677		197
Year Ended December 31, 2023		—		—		10		383		383		—
Year Ended December 31, 2024		—		—		—		368		368		—
Year Ended December 31, 2025		—		—		—		417		417		—
Thereafter		—		—		—		2,109		2,109		—
Total	$	612	$	343	$	223	$	4,025	$	4,980	$	636
Less present value discount		(27)		(21)		(16)		(883)		(931)		(51)
Present value of lease liabilities	$	585	$	322	$	207	$	3,142	$	4,049	$	585


	November 2020 Credit Facility	PPP Loans	Total
Principal	$ 25,000	$ 2,971	$ 27,971
Payment-in-kind ("PIK") accrued interest	199	—	199
Unamortized deferred issuance costs	(1,476)	—	(1,476)
Term loans, net	$ 23,723	$ 2,971	$ 26,694

Maturity Date	May 2023	April and May 2022
Interest Rate	8% + LIBOR	1%
PIK Interest Rate	2%	0%


				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Total
	Number of	Exercise		Life (in	Intrinsic
	Shares	Price		years)	Value
Outstanding as of December 31, 2020	245,904	$	2.26	7.0	$	1,130
Granted	—		—	—		—
Exercised	(792)		1.16
Forfeited/expired	—		—
Outstanding as of March 31, 2021	245,112	$	2.26	6.7	$	1,126
Options vested and exercisable	191,248	$	2.25	6.6	$	880


		Weighted Average
	Number of Units	Grant Price
Unvested as of December 31, 2020	3,280,290	$	4.94
Granted	816,162		6.92
Vested	(882,990)		4.70
Forfeited/expired	(39,878)		4.45
Unvested as of March 31, 2021	3,173,584	$	5.52


	Corporate		Procurement		Payments		Grants Management		Permitting		Budget		Total
Three Months Ended March 31, 2021
Total revenue	$	—		2,437		2,229		1,750		695		6,148	$	13,259
Cost of revenues		—		470		1,566		650		154		1,902		4,742
Income (loss) from operations		(1,756)		(805)		(4,846)		(969)		(387)		627		(8,136)
Amortization of intangible assets		—		651		1,355		323		297		973		3,599
Depreciation expense		—		47		94		9		2		101		253
Interest income (expense), net		(844)		—		(12)		(3)		—		—		(859)
Benefit from (provision for) income taxes		—		—		—		—		—		170		170

Three Months Ended March 31, 2020
Total revenue	$	—		1,656		1,899		1,465		613		5,643	$	11,276
Cost of revenues		—		392		1,470		722		139		1,804		4,527
Income (loss) from operations		(5,520)		(2,114)		(6,352)		(1,449)		(886)		(199)		(16,520)
Amortization of intangible assets		—		667		1,365		323		300		1,018		3,673
Depreciation expense		—		16		18		8		1		11		54
Interest income (expense), net		(205)		(1)		(30)		—		—		—		(236)
Benefit from (provision for) income taxes		113		—		1,785		428		247		(52)		2,521

As of March 31, 2021
Goodwill	$	—		68,744		88,327		45,140		21,956		60,468	$	284,635
Assets		26,630		92,306		109,142		54,976		27,526		115,362		425,942

As of December 31, 2020
Goodwill	$	—		68,744		88,327		45,140		21,956		60,468	$	284,635
Assets		31,407		92,841		110,339		55,676		28,474		113,710		432,447


	Generally Accepted Accounting Principles (“GAAP”)								Non-GAAP


	Total		Total		Increase /		Increase /		Total		Total		Increase /		Increase /
	Revenues		Revenues		(Decrease)		(Decrease)		Revenues		Revenues		(Decrease)		(Decrease)
	2021		2020		in Dollars		in %		2021		2020		in Dollars		in %
Procurement	$	2,437	$	1,656	$	781	47	%	$	2,437		1,665	$	772	46	%
Payments		2,229		1,899		330	17	%		2,351		2,032		319	16	%
Grants Management		1,750		1,465		285	19	%		1,750		1,480		270	18	%
Permitting		695		613		82	13	%		695		613		82	13	%
Budget		6,148		5,643		505	9	%		6,148		5,801		347	6	%
Total	$	13,259	$	11,276	$	1,983	18	%	$	13,381	$	11,591	$	1,790	15	%


`
	Total Cost		Total Cost
	of		of		Increase /		Increase /
	Revenues		Revenues		(Decrease)		(Decrease)
	2021		2020		in Dollars		in %
Procurement	$	470	$	392	$	78	20	%
Payments		1,566		1,470		96	7	%
Grants Management		650		722		(72)	(10)	%
Permitting		154		139		15	11	%
Budget		1,902		1,804		98	5	%
Total	$	4,742	$	4,527	$	215	5	%


	Three Months Ended March 31,
	2021			2020
Revenues		13,259			11,276
Purchase accounting adjustment to revenue		122			315
Non-GAAP Revenues	$	13,381		$	11,591

Gross Profit		8,517			6,749
Purchase accounting adjustment to revenue		122			315
Share-based compensation		292			218
Non-GAAP Pro forma as Adjusted Gross Profit	$	8,931		$	7,282

Gross Margin		64	%		60	%
Non-GAAP Gross Margin		67	%		63	%

Loss from operations	$	(8,136)		$	(16,520)
Purchase accounting adjustment to revenue		122			315
Amortization of intangibles		3,599			3,673
Share-based compensation		1,823			3,295
Restructuring charges		—			3,466
Change in fair value of contingent consideration		1,114			29
Non-GAAP Loss from operations	$	(1,478)		$	(5,742)