AVEPOINT, INC.

FORM 10-Q

For the Fiscal Quarter Ended ~~June~~September 30, 2023

TABLE OF CONTENTS

	Page
FORWARD-LOOKING STATEMENTS	3
PART I. FINANCIAL INFORMATION	5
Item 1. Financial Statements	5
~~Condensed Consolidated Balance Sheets~~ ~~as of June 30, 2023 and December 31, 2022~~	6
~~Condensed Consolidated Statements of Operations~~ ~~for the Three and Six Months Ended June 30, 2023 and 2022~~	7
~~Condensed Consolidated Statements of Comprehensive Loss~~ ~~for the Three and Six Months Ended June 30, 2023 and 2022~~	8
~~Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity~~ ~~for the Three and Six Months Ended June 30, 2023 and 2022~~	9
~~Condensed Consolidated Statements of Cash Flows~~ ~~for the Six Months Ended June 30, 2023 and 2022~~	11
~~Notes to Condensed Consolidated Financial Statements~~	12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3127
Item 3. Quantitative and Qualitative Disclosures About Market Risk	5044
Item 4. Controls and Procedures	5145
PART II. OTHER INFORMATION	5347
Item 1. Legal Proceedings	5347
Item 1A. Risk Factors	5347
Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	5448
Item 3. Defaults Upon Senior Securities	5448
Item 4. Mine Safety Disclosures	5448
Item 5. Other Information	5448
Item 6. Exhibits	5549
Signatures	5650

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, 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"). Forward-looking statements, as well as descriptions of the risks and uncertainties that could cause actual results and events to differ materially, may appear throughout this Quarterly Report, including in the following sections: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Quarterly Report), “Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Quarterly Report), and “Risk Factors” (Part II, Item 1A of this Quarterly Report).

These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events, or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, sales, earnings, and statements expressing general views about future operating results — are forward-looking statements. These forward-looking statements are, by their nature, subject to significant risks and uncertainties, and are based on the beliefs of, as well as assumptions made by and information currently available to, our management. Our management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Readers should evaluate all forward-looking statements made in the context of these risks and uncertainties. The important factors referenced above may not contain all of the factors that are important to investors.

These forward-looking statements speak only as of the date of this Quarterly Report and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about:

	•	our future operating or financial results;
	•	future acquisitions, business strategy and expected capital spending;
	•	changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
	•	the implementation, market acceptance and success of our business model and growth strategy;
	•	expectations and forecasts with respect to the size and growth of the cloud industry and digital transformation in general and Microsoft’s products and services in particular;
	•	the ability of our products and services to meet customers’ compliance and regulatory needs;
	•	our ability to compete with others in the digital transformation industry;
	•	our ability to grow our market share;
	•	our ability to attract and retain qualified employees and management;
	•	our ability to adapt to changes in consumer preferences, perception and spending habits and develop and expand our product offerings and gain market acceptance of our products, including in new geographies;
	•	developments and projections relating to our competitors and industry;
	•	our ability to develop and maintain our brand and reputation;
	•	unforeseen business disruptions or other impacts due to political instability, civil disobedience, terrorism, armed hostilities (including the ongoing hostilities between Russia and Ukraine), extreme weather conditions, natural disasters, other pandemics or other calamities;
	•	our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others;
	•	expectations regarding the time during which we will be an emerging growth company under the JOBS Act;
	•	our future capital requirements and sources and uses of cash;
	•	our ability to obtain funding for our operations and future growth;
	•	the effects of inflation; and
	•	the effects of foreign currency exchange.

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The foregoing list of risks is not exhaustive. Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise, except as required by law.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, the events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. You should refer to the ‘‘Risk Factors’’ section of our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2022, and the "Risk Factors" section of this Quarterly Report for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to the Quarterly Report, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Unless the context otherwise indicates, references in this report to the terms “AvePoint”, the “Company”, “we”, “our” and “us” refer to AvePoint, Inc. and its subsidiaries.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

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Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity (continued)

AvePoint, Inc. ~~(hereinafter~~(collectively with its subsidiaries, hereinafter referred to as “AvePoint,” the “Company,” “we,” “us,” or “our”) was incorporated as a New Jersey corporation on July 24, 2001 and redomiciled as a Delaware corporation in 2006.

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

The adoption of this portfolio of solutions – what has been generally described as the “digital transformation” – is a substantial and ongoing challenge for most organizations, which for decades had previously relied upon only a small number of multi-purpose on-premises applications to drive business outcomes. However, to build and deliver an efficient digital workplace today, companies must address this abundance of applications – and the associated explosive growth and sprawl of data – with a platform offering that is well governed, fit for purpose, easy to use and built on automation.

AvePoint’s Confidence Platform empowers organizations – of all sizes, in all regions, and across all industries – to optimize and secure the solutions that most commonly establish and underpin the digital workplace. As our customers seek to rapidly reduce costs, improve productivity and make more informed business decisions, they depend on our platform for data-driven insights, critical business intelligence and ongoing operational value through automation.

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

The accompanying unaudited condensed consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted.

In the opinion of management, these financial statements contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Operating results for the ~~six~~three and nine months ended ~~June~~September 30, 2023 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2023.

These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of December 31, 2022 and 2021, and for the years ended December 31, 2022 and 2021, and the related notes included in our most recent Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 31, 2023, and amended on June 13, 2023 (“Annual Report”).

The Company's significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Annual Report. There have been no significant changes to these policies during the three and nine months ended September 30, 2023.

In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-13, Financial Instruments — Credit Losses on Financial Instruments which replaces incurred loss methodology to estimate credit losses on financial instruments with a methodology that reflects expected credit losses. This amendment affects entities holding financial assets that are not accounted for at fair value through net income including trade receivables. Subsequently FASB issued ASU 2020-02 which deferred the adoption date. The amendments in this ASU are effective for Emerging Growth Company entities, which elected to take advantage of the extended transition period, for fiscal years beginning after December 15, 2022. Early application of the amendments is permitted. The Company adopted the standard on January 1, 2023. The adoption of the standard did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 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)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in ~~U.S.~~ GAAP. The Company adopted the standard on January 1, ~~2022.~~2023. The adoption of the standard did not have a material impact on its condensed consolidated financial statements.

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

When we consummate a business combination, the assets acquired and the liabilities assumed are recognized separately from goodwill at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of the fair value of consideration transferred over the acquisition date fair value of the net identifiable assets acquired. While best estimates and assumptions are used to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which ~~may~~ ~~be up to~~ ~~one~~ year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill as we obtain new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Upon the earlier of the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded in the condensed consolidated statements of operations. Acquisition-related costs were immaterial and were expensed as incurred. Pro forma historical results of operations related to the business combinations closed in ~~2022~~ ~~have~~ ~~not~~ ~~been presented because they are~~ ~~not~~ ~~material business combinations to our condensed consolidated financial statements, either individually or in aggregate.~~

~~Goodwill represents the excess of the fair value of consideration transferred over the fair value of net identifiable assets acquired.~~

We ~~maintain~~maintained a line of credit under a loan and security agreement, as amended, (the “Amended Loan Agreement”) with HSBC Venture, as the lender. See “Note 7- Line of Credit” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q.

The Amended Loan Agreement ~~provides~~provided for a revolving line of credit of up to $30.0 million and an additional $20.0 million accordion feature for additional capital we ~~may~~were permitted to draw upon at our request. Borrowings under the line ~~currently bear~~bore interest at a rate equal to SOFR plus 3.6%. The line ~~carries~~carried an unused fee of 0.5% per year. Any proceeds of borrowings under the Amended Loan Agreement ~~will be~~were used for general corporate purposes.

On a consolidated basis with our subsidiaries, we ~~are~~were required to maintain a specified adjusted quick ratio and minimum annual recurring revenue, tested by HSBC Venture each quarter. Pursuant to the Amended Loan Agreement, we pledged, assigned, and granted HSBC Venture a security interest in all shares of our subsidiaries, future proceeds, and certain assets as security for our obligations under the ~~Amended~~ Loan Agreement. Our line of credit under the Amended Loan Agreement ~~will mature~~matured on September 7, 2023.

~~To date,~~
Prior to this maturity, we ~~are~~were in compliance with all covenants under the Amended Loan Agreement. We ~~have~~did not at any time ~~including as of and for the six months ended June 30, 2023, borrowed~~borrow under the Amended Loan Agreement. The description of the Amended Loan Agreement is qualified in its entirety by the full text of the form of such agreement, a copy of which is attached as an exhibit to our Annual Report.
On November 3, 2023, we entered into the Loan Agreement with HSBC, as the lender. See “Note 7- Line of Credit” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q.
The Loan Agreement provides for a revolving line of credit of up to $30.0 million and an additional $20.0 million accordion feature for additional capital we may draw upon at our request. Borrowings under the line currently bear interest at a rate equal to term SOFR plus 3.00% to 3.25% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee ranging from .50% to .55% depending on the Consolidated Total Leverage Ratio. Any proceeds of borrowings under the Loan Agreement will be used for general corporate purposes.
On a consolidated basis with our subsidiaries, we are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. Pursuant to the Loan Agreement, we pledged, assigned, and granted HSBC a security interest in all shares of our subsidiaries, future proceeds, and certain assets as security for our obligations under the Loan Agreement. Our line of credit under the Loan Agreement will mature on November 3, 2026.
To date, we are in compliance with all covenants under the Loan Agreement. We have not at any time borrowed under the Loan Agreement. The description of the Loan Agreement is qualified in its entirety by the full text of the form of such agreement, a copy of which is attached as an exhibit to this Quarterly Report.

Leasing Activities

We are obligated under various non-cancelable operating leases for office space. The initial terms of the leases expire on various dates through 2030. As of ~~June~~September 30, 2023, the commitments related to these operating leases is ~~$18.3~~$17.1 million, of which ~~$6.3~~$6.1 million is due in the next twelve months.

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Part I
Item 2

Operating Segment Information

We operate in one segment. Our products and services are sold throughout the world, through direct and indirect sales channels. Our chief operating decision maker (the “CODM”) is our Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation, expense allocation, or profitability by product or geography. See the section titled “Notes to Condensed Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report) under the sub-heading “Note 15 – Segment Information” for more information.

Critical Accounting Policies and Estimates

Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on the reported revenue generated and reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that our management believes are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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~~Part I~~
~~Item 2~~

While our significant accounting policies are described in more detail in the section titled “Notes to Condensed Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report), we believe the following critical accounting policies and estimates are most important to understanding and evaluating our reported financial results.

Revenue Recognition

We derive revenue from four primary sources: SaaS, term license and support, services, and maintenance. Many of our contracts with customers include multiple performance obligations. Judgement is required in determining whether each performance obligation is distinct. Our products and services generally do not require a significant amount of integration or interdependency; therefore, our products and services are generally not combined. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (“SSP”) for each performance obligation within each contract.

We use judgment in determining the SSP for products and services. For substantially all performance obligations except term licenses, we are able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Term licenses are sold only as a bundled arrangement that includes the rights to a term license and support. In determining the SSP of license and support in a term license arrangement we applied observable inputs using the value relationship between support and term license, the value relationship between support and perpetual licenses, the average economic life of our products, software renewal rates and the price of the bundled arrangement in relation to the perpetual licensing approach. Using a combination of the relative fair value method or the residual value method the SSP of the performance obligations in an arrangement was allocated to each performance obligation within a sales arrangement.

Company Earn-Out Shares

In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718. Refer to "Note 13 — Stock-Based Compensation" for more information regarding the Company Earn-Out RSUs.

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares.

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Part I
Item 2

Economic Conditions, Challenges, and Risks

The markets for software and cloud-based services are dynamic and highly competitive. Our competitors are developing new software while also deploying competing cloud-based services for consumers and businesses. Customer preferences evolve rapidly, and choices in hardware, products, and devices can and do influence how users access services in the cloud, and in some cases, the user’s choice of which suite of cloud-based services to use. We must continue to evolve and adapt over an extended time in pace with this changing environment. The investments we are making in infrastructure, research and development, marketing, and geographic expansion will continue to increase our operating costs and may decrease our operating margins.

Our success is highly dependent on our ability to attract and retain qualified employees. We hire a mix of university and industry talent worldwide. We compete for talented individuals globally by offering an exceptional working environment, broad customer reach, scale in resources, the ability to grow one’s career across many different products and businesses, and competitive compensation and benefits.

Aggregate demand for our software, services, and devices is correlated to global macroeconomic and geopolitical factors, which remain dynamic. By way of example, Russia's ongoing military action against Ukraine has created general macroeconomic uncertainty. While we have only limited and largely immaterial economic, financial, and operational exposure to Russia or Belarus (or any individuals and entities connected to Russian or Belarusian political, business, and financial organizations), we are nevertheless monitoring the developments as they unfold in order to react accordingly. The impact of the conflict on our operational and financial performance may depend on future developments that cannot be predicted; we do not, however, believe the impacts to be material at this time.

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~~Part I~~
~~Item 2~~

Our international operations provide a significant portion of our total revenue and expenses. Many of these revenue and expenses are denominated in currencies other than the U.S. dollar. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. Due to the global nature of the Company, we do have a natural hedge against material changes in foreign exchange rates. Refer to the section titled “Risk Factors” (Part I, Item 1A of our Annual Report) for a discussion of these factors and other risks.

Seasonality

Our quarterly revenue fluctuates and does not necessarily grow sequentially when measuring any one fiscal quarter's revenue with another (e.g. comparing the fourth fiscal quarter of fiscal year 2022 with the first fiscal quarter of fiscal year 2023). Historically, our third and fourth quarters have been our highest revenue quarters, however those results are not necessarily indicative of future quarterly revenue or full year results. Higher third and fourth quarter revenue is driven primarily by increased sales resulting from our customers’ fiscal year ends. Additionally, new product and service introductions (including the timing of those introductions) can significantly impact revenue. Revenue can also be affected when customers anticipate a product introduction. Our operating expenses have generally increased sequentially due to increases in personnel in connection with the expansion of our business.

Emerging Growth Company Accounting Election

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 are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. The Company is currently an "emerging growth company" as defined in Section 2(a) of the Securities Act.

Because the market value of our common stock held by non-affiliates exceeded $700.0 million as of June 30, 2023, we will meet the conditions to be deemed a "large-accelerated filer" as of December 31, 2023, and will, consequently, no longer be an emerging growth company as of that date. We will be subject to the regulations applicable to all large-accelerated filers as of December 31, 2023.

Recently Issued and Adopted Accounting Pronouncements

For information about recent accounting pronouncements, see “Note 2 - Summary of Significant Accounting Policies” in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q.

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Part I

Item 3

Item 3. Quantitative and Qualitative Disclosures About Market Risks

We are exposed to potential economic risk from interest rates, foreign exchange rates, and concentration of credit. We have considered changes in our exposure to market risks during the ~~six~~nine months ended ~~June~~September 30, 2023, and have determined that there have been no material changes to our exposure to market risks from those described in our Annual Report. However, we have provided the following information to supplement or update our disclosures onin our ~~Form 10-K.~~Annual Report.

Interest Rate Risk

We had cash and cash equivalents, marketable securities, and short-term deposits of ~~$222.9~~$209.3 million as of ~~June~~September 30, 2023. We hold cash and cash equivalents, marketable securities, and short-term deposits for working capital purposes. Our cash and cash equivalents are held in cash deposits and money market funds. Due to the short-term nature of these instruments, we believe that it does not have any material exposure to changes in its fair value due to changes in interest rates. Declines in interest rates, however, would reduce our future interest income. The effect of a hypothetical 10% change in interest rates would not have a material negative impact on our condensed consolidated financial statements. ~~As of June 30, 2023, we had no outstanding obligations under our line of credit with HSBC under the Amended Loan Agreement.~~ To the extent we enter into other long-term debt arrangements in the future, we would be subject to fluctuations in interest rates which could have a material impact on our future financial condition and results of operation.

Foreign Currency Exchange Risk

Fluctuations in foreign currencies impact the amount of total assets and liabilities that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars. In particular, the amount of cash, cash equivalents and marketable securities that we report in U.S. Dollars for a significant portion of the cash held by these subsidiaries is subject to translation variance caused by changes in foreign currency exchange rates as of the end of each respective reporting period, the offset to which is substantially recorded to accumulated other comprehensive income on our condensed consolidated balance sheets and is also presented as a line item in its condensed consolidated statements of comprehensive income.

Concentration of Credit Risk

We deposit our cash with financial institutions, and, at times, such balances may exceed federally insured limits.

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Part I

Item 4

Item 4. Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (in his capacity as principal executive officer) and our Chief Financial Officer (in his capacity as principal financial and accounting officer), as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act, as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022 or during the ~~six~~nine months ended ~~June~~September 30, 2023 due to the material weaknesses described below. Notwithstanding such material weaknesses in internal control over financial reporting, our principal executive officer and principal financial and accounting officer have concluded that our audited Consolidated Financial Statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Because the control deficiencies described below could have resulted in a material misstatement of our annual or interim financial statements, we determined that these deficiencies constitute material weaknesses. Based upon the evaluation described above, our management identified the following material weaknesses in internal control over financial reporting in fiscal year 2020 which continued to exist during the ~~six~~nine months ended ~~June~~September 30, 2023:

	▪	the completeness and accuracy of financial accounting, reporting and disclosures;
	▪	the identification, review and accounting for nonroutine transactions and/or complex accounting transactions; and
	▪	segregation of duties with respect to the processing of financial transactions.

Remediation of Material Weaknesses

Our management has been and continues to be committed to remediating these material weaknesses and has identified and implemented several steps to enhance our internal controls over financial reporting. We have implemented a remediation plan (the “Remediation Plan”), the actions under which coincide with and are incorporated into our overarching Sarbanes-Oxley Act of 2002 compliance implementation plan. The Remediation Plan actions include, but are not limited to:

	▪	the hiring of personnel with technical accounting and financial reporting experience to further enhance our ability to accurately and expediently respond to increased accounting and financial complexities and increased resource demand with respect thereto, and to aid in further identification and oversight with respect to disclosure control activities in response;
	▪	the engagement of external consultants in the assistance of the evaluation of complex accounting matters;
	▪	the establishment of formalized internal controls to review and maintain segregation of duties between appropriate control operators; and
	▪	the implementation of improved accounting and financial reporting procedures to enhance the completeness and accuracy of our financial accounting, reporting, and disclosures.

We have implemented documented policies and procedures for, and are in the process of testing the implementation and operating effectiveness of, the newly designed controls. The material weakness in our internal control over financial reporting will not be considered remediated until the newly designed controls operate for a sufficient period of time. In addition, we may discover additional material weaknesses that require additional time and resources to remediate and we may decide to take additional measures to address the material weaknesses or modify the remediation steps described above.

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Part I

Item 4

Changes in Internal Control Over Financial Reporting

Other than the Remediation Plan discussed above and the ongoing implementation of measures under the Remediation Plan designed to accurately maintain our financial records, enhance the flow of financial information, improve data management, and provide timely information to our management team, there have been no changes in internal control over financial reporting during the quarter ended ~~June~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial and accounting officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is also 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. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

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Part II

Items 1 and 1A

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of our business, we may be involved in various claims, negotiations, and legal actions. Except for such claims that arise in the normal course of business, as of and for the fiscal quarter ended ~~June~~September 30, 2023, we are not a party to any material asserted, ongoing, threatened, or pending claims, suits, assessments, proceedings, or other litigation for which a material claim is reasonably possible, probable, or estimable.

Refer to the information under the section titled “Risk Factors” of our Annual Report ~~under the sub-heading “~~~~Legal and Regulatory Risks~~” (Part I, Item 1A of our Annual Report) for information regarding the potential legal and regulatory risks (including potential legal proceedings and litigation) in which we may become involved.

Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report, which risks and uncertainties could affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes to the risk factors previously disclosed in our Annual Report. We urge you to read the risk factors in our Annual Report.

5347

Table of Contents

Part II

Items 2, 3, 4, and 5

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

During the quarter ended ~~June~~September 30, 2023, we did not issue any shares of our common stock or any other equity securities without registration under the Securities Act of 1933, as amended.

Issuer Purchases of Equity Securities.

On March 17, 2022, we announced that our Board of Directors authorized ~~a new share repurchase program (the "~~the Share Repurchase Program") for us to buy back shares of our common stock. Under the Share Repurchase Program, we have the authority to buy up to a maximum of $150 million of our common stock shares via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period of three years from the date of authorization. Purchases made pursuant to the Share Repurchase Program may be conducted in compliance with Exchange Act Rule 10b-18 and/or Exchange Act Rule 10b5-1. Purchases made pursuant to the Share Repurchase Program will be conducted in compliance with all applicable legal, regulatory, and internal policy requirements, including our Insider Trading Policy. We are not obligated to make purchases of, nor are we obligated to acquire any particular amount of, our common stock under the Share Repurchase Program. The Share Repurchase Program may be suspended or discontinued at any time.

The following table presents information with respect to common stock shares repurchased under the Share Repurchase Program during the three months ended ~~June~~September 30, 2023:

Period

Total number of shares purchased⁽¹⁾

Average price paid per share⁽²⁾

Total number of shares purchased as part of the Share Repurchase Program⁽³⁾

Maximum number (or approximate dollar value) of shares that may yet be purchased under the Share Repurchase Program⁽⁴⁾
April 1, 2023 - April 30, 2023 473,341 $4.0444 4,944,403 $126,334,871
May 1, 2023 - May 31, 2023 1,488,678 $5.2036 6,433,081 $118,588,427
June 1, 2023 - June 30, 2023 949,151 $5.8150 7,382,232 $113,069,096
Period
Total number of shares purchased⁽¹⁾
Average price paid per share⁽²⁾
Total number of shares purchased as part of the Share Repurchase Program
Approximate dollar value of shares that may yet be purchased under the Share Repurchase Program(3)
July 1, 2023 - July 31, 2023
910,664
$5.9060
910,664
$107,690,679
August 1, 2023 - August 31, 2023
941,333
$6.2804
941,333
$101,778,712
September 1, 2023 - September 30, 2023
795,608
$6.7247
795,608
$96,428,449

(1) All shares reported herein were purchased pursuant to the publicly announced Share Repurchase Program.
(2) Average price paid per share includes costs associated with the repurchases and excludes the 1% excise tax on stock repurchases enacted by the Inflation Reduction Act of 2022.
(3) ~~Total number of shares purchased represents the cumulative number of shares purchased as part of the Share Repurchase Program.~~
~~(4)~~ The maximum remaining dollar value of shares that may yet be purchased under the Share Repurchase Program is reduced by the aggregate price paid for share purchases in addition to any fees, commissions, or other costs that may arise as a result of the purchase.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

OnDuring the quarter ended ~~June 15,~~September 30, 2023, ~~Brian Michael Brown, Chief Legal and Compliance Officer and a member~~no director or officer of the ~~Company's Board of Directors,~~Company adopted or terminated a ~~Rule~~“Rule 10b5-1 trading ~~arrangement that is intended to satisfy the affirmative defense of Rule~~arrangement” or “non-Rulle 10b5-1~~(c) for the sale~~ trading arrangement,” as each term is defined in Item 408(a) of ~~up to 240,000 shares of the Company's common stock until~~ ~~September 20, 2024.~~Regulation S-K.

5448
Table of Contents
Part II
Item 6

Item 6. Exhibits

The following exhibits are filed as part of, furnished with, or incorporated by reference into, this Quarterly Report on Form 10-Q, in each case as indicated therein.

Exhibit Index

~~Incorporated by Reference~~
~~Exhibit~~
~~Number~~
~~Description~~
~~Schedule/~~
~~Form~~
~~File No.~~
~~Exhibit~~
~~Filing Date~~
~~Filed Herewith~~
~~31.1~~
~~Certification of Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
X
~~31.2~~
~~Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
X
32.1**
~~Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
X
32.2**
~~Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
X
~~101.INS~~
~~Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~
X
~~101.SCH~~
~~Inline XBRL Taxonomy Extension Schema Document.~~
X
~~101.CAL~~
~~Inline XBRL Taxonomy Extension Calculation Linkbase Document.~~
X
~~101.DEF~~
~~Inline XBRL Taxonomy Extension Definition Linkbase Document.~~
X
~~101.LAB~~
~~Inline XBRL Taxonomy Extension Labels Linkbase Document.~~
X
~~101.PRE~~
~~Inline XBRL Taxonomy Extension Presentation Linkbase Document.~~
X
~~104.1~~
~~Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).~~
X

Incorporated by Reference
Exhibit
Number

Description

Schedule/
Form

File No.

Exhibit

Filing Date
Filed Herewith
10.1 Loan and Security Agreement, dated November 3, 2023, by and between AvePoint, Inc. and HSBC Bank USA, National Association Form 8-K 001-39048 10.1 November 6, 2023
10.2 Pledge Agreement, dated November 3, 2023, by and between AvePoint, Inc. and HSBC Bank USA, National Association Form 8-K 001-39048 10.2 November 6, 2023
10.3 Revolving Note, dated November 3, 2023, by and between AvePoint, Inc. and HSBC Bank USA, National Association Form 8-K 001-39048 10.3 November 6, 2023
31.1

Certification of Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2

Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1**

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2**

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS

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

Inline XBRL Taxonomy Extension Schema Document.
X
101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.
X
101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.
X
101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.
X
101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.
X
104.1

Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).
X

**
Furnished herewith. Any exhibit furnished herewith (including the certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto) are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

5549
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.

AVEPOINT, INC.

Date: ~~August~~November 9, 2023
/s/ Tianyi Jiang

Name:
Tianyi Jiang

Title:
Chief Executive Officer
(Principal Executive Officer)

Date: ~~August~~November 9, 2023
/s/ James Caci

Name:
James Caci

Title:
Chief Financial Officer
(Principal Financial and Accounting Officer)

5650

Delaware	83-4461709
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	AVPT	The Nasdaq Global Select Market
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	AVPTW	The Nasdaq Global Select Market

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☒

Index to Financial Statements (Unaudited)		Page
Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2023 and December 31, 2022		6
Condensed Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022		7
Condensed Consolidated Statements of Comprehensive Loss for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022		8
Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022		9
Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022		11
Notes to Condensed Consolidated Financial Statements		12

	*June 30,*			*December 31,*			*September 30,*			*December 31,*
	*2023*			*2022*			*2023*			*2022*
Assets
Current assets:
Cash and cash equivalents	$	219,714		$	227,188		$	205,786		$	227,188
Short-term investments		3,191			2,620			3,478			2,620
Accounts receivable, net of allowance for doubtful accounts of $1,001 and $725 as of June 30, 2023 and December 31, 2022, respectively		61,815			66,474
Accounts receivable, net of allowance for doubtful accounts of $1,176 and $725 as of September 30, 2023 and December 31, 2022, respectively								69,329			66,474
Prepaid expenses and other current assets		5,539			10,013			8,276			10,013
Total current assets		290,259			306,295			286,869			306,295
Property and equipment, net		4,996			5,537			4,983			5,537
Goodwill		18,979			18,904			18,595			18,904
Intangible assets, net		10,770			11,079			10,427			11,079
Operating lease right-of-use assets		15,577			15,855			14,547			15,855
Deferred contract costs		49,426			48,553			50,232			48,553
Other assets		8,563			9,310			12,558			9,310
Total assets	$	398,570		$	415,533		$	398,211		$	415,533
Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable	$	1,439		$	1,519		$	1,855		$	1,519
Accrued expenses and other liabilities		41,795			47,784			44,538			47,784
Current portion of deferred revenue		96,002			93,405			102,433			93,405
Total current liabilities		139,236			142,708			148,826			142,708
Long-term operating lease liabilities		10,751			11,348			9,982			11,348
Long-term portion of deferred revenue		6,925			8,085			6,296			8,085
Earn-out shares liabilities		10,939			6,631			13,822			6,631
Other non-current liabilities		5,586			3,607			5,183			3,607
Total liabilities		173,437			172,379			184,109			172,379
Commitments and contingencies
Commitments and contingencies (Note 10)
Mezzanine equity
Redeemable noncontrolling interest		14,009			14,007			13,991			14,007
Total mezzanine equity		14,009			14,007			13,991			14,007
Stockholders’ equity
Common stock, $0.0001 par value; 1,000,000 shares authorized, 185,723 and 185,278 shares issued and outstanding		19			19
Common stock, $0.0001 par value; 1,000,000 shares authorized, 183,996 and 185,278 shares issued and outstanding								18			19
Additional paid-in capital		659,604			665,715			659,892			665,715
Treasury stock		—			(21,666	)		—			(21,666	)
Accumulated other comprehensive income		2,251			2,006			2,307			2,006
Accumulated deficit		(450,750	)		(416,927	)		(462,106	)		(416,927	)
Total stockholders’ equity		211,124			229,147			200,111			229,147
Total liabilities, mezzanine equity, and stockholders’ equity	$	398,570		$	415,533		$	398,211		$	415,533

	*Three Months Ended*						*Six Months Ended*						*Three Months Ended*						*Nine Months Ended*
	*June 30,*						*June 30,*						*September 30,*						*September 30,*
	*2023*			*2022*			*2023*			*2022*			*2023*			*2022*			*2023*			*2022*
Revenue:
SaaS	$	38,279		$	27,619		$	73,791		$	54,172		$	41,910		$	29,959		$	115,701		$	84,131
Term license and support		13,277			14,011			24,181			24,213			16,293			18,288			40,474			42,501
Services		10,066			9,848			19,813			18,773			11,194			10,458			31,007			29,231
Maintenance		3,247			4,223			6,656			8,834			3,363			4,034			10,019			12,868
Total revenue		64,869			55,701			124,441			105,992			72,760			62,739			197,201			168,731
Cost of revenue:
SaaS		9,130			6,207			17,025			11,770			9,561			7,164			26,586			18,934
Term license and support		496			491			957			1,076			484			524			1,441			1,600
Services		9,958			8,636			19,309			16,986			9,922			9,218			29,231			26,204
Maintenance		212			278			395			556			189			192			584			748
Total cost of revenue		19,796			15,612			37,686			30,388			20,156			17,098			57,842			47,486
Gross profit		45,073			40,089			86,755			75,604			52,604			45,641			139,359			121,245
Operating expenses:
Sales and marketing		27,691			27,371			54,542			54,577			28,436			27,425			82,978			82,002
General and administrative		15,193			16,380			29,841			31,982			15,838			16,429			45,679			48,411
Research and development		9,273			8,081			18,288			14,636			8,643			9,214			26,931			23,850
Total operating expenses		52,157			51,832			102,671			101,195			52,917			53,068			155,588			154,263
Loss from operations		(7,084	)		(11,743	)		(15,916	)		(25,591	)		(313	)		(7,427	)		(16,229	)		(33,018	)
(Loss) gain on earn-out and warrant liabilities		(4,027	)		2,668			(4,136	)		5,935			(2,785	)		913			(6,921	)		6,848
Interest income, net		286			20			611			34			232			16			843			50
Other income (expense), net		1,613			(693	)		3,025			(870	)		1,477			48			4,502			(822	)
Loss before income taxes		(9,212	)		(9,748	)		(16,416	)		(20,492	)		(1,389	)		(6,450	)		(17,805	)		(26,942	)
Income tax expense (benefit)		3,313			(546	)		5,291			(237	)
Income tax expense														2,841			336			8,132			99
Net loss	$	(12,525	)	$	(9,202	)	$	(21,707	)	$	(20,255	)	$	(4,230	)	$	(6,786	)	$	(25,937	)	$	(27,041	)
Net income attributable to and accretion of redeemable noncontrolling interest		(60	)		(627	)		(75	)		(1,244	)
Net loss (income) attributable to and accretion of redeemable noncontrolling interest														18			(626	)		(57	)		(1,870	)
Net loss attributable to AvePoint, Inc.	$	(12,585	)	$	(9,829	)	$	(21,782	)	$	(21,499	)	$	(4,212	)	$	(7,412	)	$	(25,994	)	$	(28,911	)
Net loss available to common shareholders	$	(12,585	)	$	(9,829	)	$	(21,782	)	$	(21,499	)	$	(4,212	)	$	(7,412	)	$	(25,994	)	$	(28,911	)
Basic and diluted loss per share	$	(0.07	)	$	(0.05	)	$	(0.12	)	$	(0.12	)	$	(0.02	)	$	(0.04	)	$	(0.14	)	$	(0.16	)
Basic and diluted shares used in computing loss per share		183,315			182,491			183,068			182,661			181,769			180,732			182,630			179,563

	Redeemable			Total																				Accumulated					Three Months Ended September 30, 2023
	noncontrolling			mezzanine								Additional												Other		Total			Redeemable			Total															Accumulated
	interest			equity			Common Stock					Paid-In			Treasury Stock						Accumulated			Comprehensive		Stockholders’			noncontrolling			mezzanine									Additional						Other		Total
	Amount			Amount			Shares			Amount		Capital			Shares			Amount			Deficit			Income		Equity			interest			equity			Common Stock						Paid-In			Accumulated			Comprehensive		Stockholders’
Balance, March 31, 2023	$	14,057		$	14,057			186,787,807		$	19	$	674,768			4,614,626		$	(23,477	)	$	(426,124	)	$	2,055	$	227,241
																													Amount			Amount			Shares			Amount			Capital			Deficit			Income		Equity
Balance, June 30, 2023																													$	14,009		$	14,009			185,723,183		$	19		$	659,604		$	(450,750	)	$	2,251	$	211,124
Proceeds from exercise of options		—			—			1,095,218			—		2,109			—			—			—			—		2,109			—			—			288,180			—			625			—			—		625
Common stock issued upon vesting of restricted stock units		—			—			751,328			—		—			—			—			—			—		—			—			—			631,866			—			—			—			—		—
Stock-based compensation expense		—			—			—			—		9,586			—			—			—			—		9,586			—			—			—			—			9,285			—			—		9,285
Reclassification of earn-out RSUs to earn-out shares		—			—			—			—		(130	)		—			—			—			—		(130	)		—			—			—			—			(127	)		—			—		(127	)
Repurchase of common stock		—			—			(2,911,170	)		—		—			2,911,170			(15,293	)		—			—		(15,293	)
Retirement of common stock		—			—			—			—		(26,729	)		(7,525,796	)		38,770			(12,041	)		—		—
Repurchase and retirement of common stock																														—			—			(2,647,605	)		(1	)		(9,495	)		(7,144	)		—		(16,640	)
Comprehensive income (loss):
Net loss		—			—			—			—		—			—			—			(12,525	)		—		(12,525	)		—			—			—			—			—			(4,230	)		—		(4,230	)
Net income attributable to and accretion of redeemable noncontrolling interest		60			60			—			—		—			—			—			(60	)		—		(60	)
Total other comprehensive income (loss)		(108	)		(108	)		—			—		—			—			—			—			196		196
Balance, June 30, 2023	$	14,009		$	14,009			185,723,183		$	19	$	659,604			—		$	—		$	(450,750	)	$	2,251	$	211,124
Net loss attributable to and accretion of redeemable noncontrolling interest																														(18	)		(18	)		—			—			—			18			—		18
Total other comprehensive income																														—			—			—			—			—			—			56		56
Balance, September 30, 2023																													$	13,991		$	13,991			183,995,624		$	18		$	659,892		$	(462,106	)	$	2,307	$	200,111

																													Nine Months Ended September 30, 2023
	Redeemable			Total																				Accumulated					Redeemable			Total																					Accumulated
	noncontrolling			mezzanine								Additional												Other		Total			noncontrolling			mezzanine									Additional												Other		Total
	interest			equity			Common Stock					Paid-In			Treasury Stock						Accumulated			Comprehensive		Stockholders’			interest			equity			Common Stock						Paid-In			Treasury Stock						Accumulated			Comprehensive		Stockholders’
	Amount			Amount			Shares			Amount		Capital			Shares			Amount			Deficit			Income		Equity			Amount			Amount			Shares			Amount			Capital			Shares			Amount			Deficit			Income		Equity
Balance, December 31, 2022	$	14,007		$	14,007			185,277,588		$	19	$	665,715			4,189,750		$	(21,666	)	$	(416,927	)	$	2,006	$	229,147		$	14,007		$	14,007			185,277,588		$	19		$	665,715			4,189,750		$	(21,666	)	$	(416,927	)	$	2,006	$	229,147
Proceeds from exercise of options		—			—			1,775,603			—		3,240			—			—			—			—		3,240			—			—			2,063,783			—			3,865			—			—			—			—		3,865
Common stock issued upon vesting of restricted stock units		—			—			2,006,038			—		—			—			—			—			—		—			—			—			2,637,904			—			—			—			—			—			—		—
Stock-based compensation expense		—			—			—			—		17,690			—			—			—			—		17,690			—			—			—			—			26,975			—			—			—			—		26,975
Reclassification of earn-out RSUs to earn-out shares		—			—			—			—		(312	)		—			—			—			—		(312	)		—			—			—			—			(439	)		—			—			—			—		(439	)
Repurchase of common stock		—			—			(3,336,046	)		—		—			3,336,046			(17,104	)		—			—		(17,104	)
Retirement of common stock		—			—			—			—		(26,729	)		(7,525,796	)		38,770			(12,041	)		—		—
Repurchase and retirement of common stock																														—			—			(5,983,651	)		(1	)		(36,224	)		(4,189,750	)		21,666			(19,185	)		—		(33,744	)
Comprehensive income (loss):
Net loss		—			—			—			—		—			—			—			(21,707	)		—		(21,707	)		—			—			—			—			—			—			—			(25,937	)		—		(25,937	)
Net income attributable to and accretion of redeemable noncontrolling interest		75			75			—			—		—			—			—			(75	)		—		(75	)		57			57			—			—			—			—			—			(57	)		—		(57	)
Total other comprehensive income (loss)		(73	)		(73	)		—			—		—			—			—			—			245		245			(73	)		(73	)		—			—			—			—			—			—			301		301
Balance, June 30, 2023	$	14,009		$	14,009			185,723,183		$	19	$	659,604			—		$	—		$	(450,750	)	$	2,251	$	211,124
Balance, September 30, 2023																													$	13,991		$	13,991			183,995,624		$	18		$	659,892			—		$	—		$	(462,106	)	$	2,307	$	200,111

																													Nine Months Ended September 30, 2022
	Redeemable			Total																			Accumulated						Redeemable			Total																			Accumulated
	noncontrolling			mezzanine								Additional											Other			Total			noncontrolling			mezzanine								Additional											Other			Total
	interest			equity			Common Stock					Paid-In			Treasury Stock					Accumulated			Comprehensive			Stockholders’			interest			equity			Common Stock					Paid-In			Treasury Stock					Accumulated			Comprehensive			Stockholders’
	Amount			Amount			Shares			Amount		Capital			Shares		Amount			Deficit			Income			Equity			Amount			Amount			Shares			Amount		Capital			Shares		Amount			Deficit			Income			Equity
Balance, December 31, 2021	$	5,210		$	5,210			181,821,767		$	18	$	625,056			143,564	$	(1,739	)	$	(375,297	)	$	2,317		$	250,355		$	5,210		$	5,210			181,821,767		$	18	$	625,056			143,564	$	(1,739	)	$	(375,297	)	$	2,317		$	250,355
Proceeds from exercise of options		—			—			1,156,279			—		1,719			—		—			—			—			1,719			—			—			1,216,079			—		1,817			—		—			—			—			1,817
Common stock issued upon vesting of restricted stock units		—			—			254,432			—		—			—		—			—			—			—			—			—			1,469,945			—		—			—		—			—			—			—
Common stock issued upon acquisition																														—			—			324,845			—		1,517			—		—			—			—			1,517
Common stock issued for canceled officer awards																														—			—			3,592,504			1		(1	)		—		—			—			—			—
Stock-based compensation expense		—			—			—			—		18,670			—					—			—			18,670			—			—			—			—		28,279			—		—			—			—			28,279
Issuance of redeemable noncontrolling interest in MaivenPoint Pte. Ltd. ⁽¹⁾		5,794			5,794			—			—		—			—		—			—			—			—			5,794			5,794			—			—		—			—		—			—			—			—
Reclassification of earn-out RSUs to earn-out shares		—			—			—			—		(514	)		—		—			—			—			(514	)		—			—			—			—		(700	)		—		—			—			—			(700	)
Repurchase of common stock		—			—			(1,901,662	)		—		—			1,901,662		(10,052	)		—			—			(10,052	)		—			—			(3,970,037	)		—		—			3,970,037		(19,554	)		—			—			(19,554	)
Comprehensive income (loss):
Net loss		—			—			—			—		—			—		—			(20,255	)		—			(20,255	)		—			—			—			—		—			—		—			(27,041	)		—			(27,041	)
Net income attributable to and accretion of redeemable noncontrolling interest		1,244			1,244			—			—		—			—		—			(1,244	)		—			(1,244	)		1,870			1,870			—			—		—			—		—			(1,870	)		—			(1,870	)
Total other comprehensive loss		(75	)		(75	)		—			—		—			—		—			—			(1,428	)		(1,428	)		(190	)		(190	)		—			—		—			—		—			—			(91	)		(91	)
Balance, June 30, 2022	$	12,173		$	12,173			181,330,816		$	18	$	644,931			2,045,226	$	(11,791	)	$	(396,796	)	$	889		$	237,251
Balance, September 30, 2022																													$	12,684		$	12,684			184,455,103		$	19	$	655,968			4,113,601	$	(21,293	)	$	(404,208	)	$	2,226		$	232,712

	•	The reclassification of perpetual license revenue to be included in maintenance revenue on the condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2022;
	•	The reclassification of depreciation and amortization to be included in cost of revenue, sales and marketing, general and administrative and research and development on the condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2022;
	•	The reclassification of long-term unbilled receivables to be included in deferred contracts and other assets within net cash provided by (used in) operating activities on the condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2022; and
	•	The reclassification of provision for doubtful accounts and loss (gain) on disposal of property and equipment to be included in other within net cash provided by (used in) operating activities on the condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2022.

	*Accounts*				*Deferred*		*Accounts*				*Deferred*
	*receivable,*		*Deferred*		*contract*		*receivable,*		*Deferred*		*contract*
	net ⁽¹⁾		*revenue*		*costs*		net ⁽¹⁾		*revenue*		*costs*
	(in thousands)						(in thousands)
Balance, December 31, 2022	$	73,348	$	101,490	$	48,553	$	73,348	$	101,490	$	48,553
Balance, June 30, 2023		67,116		102,927		49,426
Balance, September 30, 2023								78,264		108,729		50,232

	*Goodwill*		*Goodwill*
	(in thousands)		(in thousands)
Balance as of December 31, 2022	$	18,904	$	18,904
Acquisitions				—
Effect of foreign currency translation		75		(309	)
Balance as of June 30, 2023	$	18,979
Balance as of September 30, 2023			$	18,595

Year Ending December 31:
	(in thousands)
2023 (six months)	$	1,073
2024		2,093
2025		1,706
2026		1,246
2027		1,145
Thereafter		3,507
Total intangible assets subject to amortization	$	10,770

	*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*		*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*		*Weighted Average*		*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*		*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*
						*June 30,*							*December 31,*		*Life*							*September 30,*							*December 31,*
						*2023*							*2022*									*2023*							*2022*
	(in thousands)														(in years)		(in thousands)
Technology and software, net		7,509		(1,405	)		6,104		6,842		(777	)		6,065		6.6	$	7,774	$	(1,741	)	$	6,033	$	6,842	$	(777	)	$	6,065
Customer related assets, net		4,530		(410	)		4,120		4,799		(477	)		4,322		10.0		4,432		(513	)		3,919		4,799		(477	)		4,322
Content, net		821		(275	)		546		830		(138	)		692		3.0		815		(340	)		475		830		(138	)		692
Total	$	12,860	$	(2,090	)	$	10,770	$	12,471	$	(1,392	)	$	11,079		7.5	$	13,021	$	(2,594	)	$	10,427	$	12,471	$	(1,392	)	$	11,079

Year Ending December 31:
	(in thousands)
2023 (three months)	$	563
2024		2,184
2025		1,798
2026		1,310
2027		1,123
Thereafter		3,449
Total intangible assets subject to amortization	$	10,427

	March 13,
	*2023*
Expected life (in years)		6.11
Expected volatility		59.19	%
Risk-free rate		3.63	%
Dividend yield		—

	*Three Months Ended June 30,*				*Six Months Ended June 30,*				*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2023*		*2022*		*2023*		*2022*		*2023*		*2022*		*2023*		*2022*
	(in thousands)								(in thousands)
Lease liability cost	$	1,747	$	1,498	$	3,496	$	2,649	$	1,798	$	1,953	$	5,294	$	4,602
Short-term lease expenses (1)		206		535		454		1,349		138		173		592		1,522
Variable lease cost not included in the lease liability (2)		136		37		246		69		119		97		365		166
Total lease cost	$	2,089	$	2,070	$	4,196	$	4,067	$	2,055	$	2,223	$	6,251	$	6,290

	•	1,000,000 shares of AvePoint's common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint's stock price is greater than or equal to $12.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share;
	•	1,000,000 shares of AvePoint's common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint's stock price is greater than or equal to $15.00 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share;
	•	1,000,000 shares of AvePoint's common stock, in the aggregate, if at any time from July 1, 2021 through July 1, 2028 (a) AvePoint's stock price is greater than or equal to $17.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share.

	~~June~~September 30,
	2023
Term (in years)		~~5.01~~4.76
Volatility		55.00	%

	•	100% of the Sponsor Earn-Out Shares shall vest and be released if at any time through July 1, 2028, AvePoint's stock price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and
	•	100% of the remaining Sponsor Earn-Out Shares that have not previously vested shall vest and be released if at any time through July 1, 2028, the Company consummates a subsequent transaction.

	*June 30, 2023*								*September 30, 2023*
	(in thousands)								(in thousands)
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash Equivalents:
Certificates of deposit ⁽¹⁾	$	—	$	1,486	$	—	$	1,486	$	—	$	1,483	$	—	$	1,483
Money market funds⁽²⁾		—		23,113		—		23,113		—		4,108		—		4,108
U.S. treasury bills		—		167,877		—		167,877		—		169,793		—		169,793
Short term investments:
Certificates of deposit ⁽¹⁾		—		3,191		—		3,191		—		3,478		—		3,478
Other assets:
Certificates of deposit ⁽¹⁾		—		40		—		40
Total	$	—	$	195,707	$	—	$	195,707	$	—	$	178,862	$	—	$	178,862
Liabilities:
Earn-out shares liabilities:
Earn-out shares ⁽³⁾	$	—	$	—	$	10,939	$	10,939	$	—	$	—	$	13,822	$	13,822
Other non-current liabilities:
Warrant liabilities⁽³⁾		—		367		—		367		—		397		—		397
Total	$	—	$	367	$	10,939	$	11,306	$	—	$	397	$	13,822	$	14,219

	*December 31, 2022*
	(in thousands)
	Level 1		Level 2		Level 3		Total
Assets
Cash Equivalents:
Certificates of deposit ⁽¹⁾	$	—	$	1,693	$	—	$	1,693
Money market funds⁽²⁾		—		188,769		—		188,769
Short term investments:
Certificates of deposit ⁽¹⁾		—		2,620		—		2,620
Other assets:
Certificates of deposit ⁽¹⁾		—		162		—		162
Total	$	—	$	193,244	$	—	$	193,244
Liabilities:
Earn-out shares liabilities:
Earn-out shares ⁽³⁾	$	—	$	—	$	6,631	$	6,631
Other non-current liabilities:
Warrant liabilities ⁽³⁾		—		227		—		227
Total	$	—	$	227	$	6,631	$	6,858

	▪	Total ARR increased ~~26%~~23% year-over-year to ~~$236.2~~$250.6 million as of ~~June~~September 30, 2023. On an FX adjusted basis, total ARR increased ~~30%~~25% year-over-year;
	▪	Total revenue increased 16% year-over-year to ~~$64.9~~$72.8 million for the three months ended ~~June~~September 30, 2023;
	▪	SaaS revenue increased ~~39%~~40% year-over-year to ~~$38.3~~$41.9 million for the three months ended ~~June~~September 30, 2023;
	▪	~~Added new functionality for public sector customers to strengthen data protection~~Introduced AvePoint EnPower, which helps organizations more proactively analyze, govern and ~~simplify deployment with AvePoint Cloud Backup for Salesforce, a FedRAMP (moderate) authorized solution on Salesforce AppExchange~~optimize their SaaS management and ~~Amazon Web Services Marketplace;~~operations across Microsoft 365 and Power Platform, in turn enabling greater operational efficiency and automated governance; and
	▪	~~Continued to invest in channel innovation to boost revenue opportunities~~Announced certification against the ISO information security management system audit using the 27701:2019 framework for ~~partners~~the first time, and ~~achieve profitable growth with an expanded~~the 27001:2013 and 27017:2015 frameworks for the second consecutive year, demonstrating the Company's prioritization of security and privacy for AvePoint ~~Certification Program, new Partner Locator~~ and ~~DevOps capabilities.~~its customers.

Revenue		We generate revenue from four primary sources: SaaS, term license and support, services, and maintenance. SaaS revenue sources are generated from our cloud-based solutions. Term license and support revenue sources are generated from the sales of on-premise or hybrid licenses, which include a distinct support component. Both SaaS and term license and support revenue sources are primarily billed annually. SaaS and term license and support are generally sold per user license or based upon the amount of data protected. Services revenue includes revenue generated from implementation, training, consulting, license customization and managed services. These revenues are recognized by applying a measure of progress, such as labor hours to determine the percentage of completion of each contract. These offerings are not inherently recurring in nature and as such are subject to more period-to-period volatility than other elements of our business. Services revenue from managed services are recognized ratably or on a straight-line basis over the contract term. Maintenance revenue is a result of selling on-going support for perpetual licenses. It also includes recurring professional services such as Technical Account Management. Maintenance revenue is recognized ratably over the term of the maintenance agreement, which is typically one year.

Cost of Revenue		Cost of SaaS and cost of term license and support consists of all direct costs to deliver and support our SaaS and term license and support products, including salaries, benefits and related expenses, overhead, third-party hosting fees related to our cloud services, depreciation and amortization. We recognize these expenses as they are incurred. We expect that these costs will increase in absolute dollars but may fluctuate as a percentage of SaaS and term license and support revenue from period to period. Cost of maintenance consists of all direct costs to support our perpetual license products, including salaries, benefits, stock-based compensation and related expenses, overhead, depreciation and amortization. We recognize these expenses as they are incurred. We expect that cost of maintenance revenue will decrease in absolute dollars as maintenance revenue declines but may fluctuate as a percentage of maintenance revenue. Cost of services consists of salaries, benefits, stock-based compensation and related expenses for our services organization, overhead, IT necessary to provide services for our customers, depreciation and amortization. We recognize these expenses as they are incurred.

Gross Profit and Gross Margin		Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue. Gross profit has been and will continue to be affected by various factors, including the mix of our revenue, the costs associated with third-party cloud-based hosting services for our cloud-based subscriptions, and the extent to which we expand our customer support and services organizations. We expect that our gross margin will fluctuate from period to period depending on the interplay of these various factors but should increase in the long term as SaaS revenue continues to increase as a percentage of total revenue.

Sales and Marketing		Sales and marketing expenses consist primarily of personnel-related expenses for sales, marketing and customer success personnel, stock-based compensation expense, sales commissions, marketing programs, travel-related expenses, overhead costs, depreciation and amortization. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. We plan to continue our investment in sales and marketing by hiring additional sales and marketing personnel, executing our go-to-market strategy globally, and building our brand awareness.

General and Administrative		General and administrative expenses consist primarily of personnel-related expenses for finance, legal and compliance, human resources, and IT personnel, as well as stock-based compensation expense, external professional services, overhead costs, other administrative functions, depreciation and amortization. Our general and administrative expenses have increased as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations, and professional services.

Research and Development		Research and development expenses consist primarily of personnel-related expenses incurred for our engineering and product and design teams, as well as stock-based compensation expense, overhead costs, depreciation and amortization. We have a research and development presence in the United States, China, Singapore and Vietnam. We believe this provides a strategic advantage, allowing us to invest efficiently in both new product development and increasing our existing product capabilities. We believe delivering expanding product functionality is critical to enhancing the success of existing customers while new product development further reinforces our breadth of software solutions.

Other Income (Expense), net		Other income (expense), net consists primarily of fair value adjustments on earn-out and warrant liabilities and realized gain/loss for securities. Other income (expense), net also consists of foreign currency remeasurement gains/losses and interest income on corporate funds invested in money market instruments and highly liquid short-term investments.

Income Taxes		We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Tax laws, regulations, administrative practices, principles, and interpretations in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions. The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Accordingly, our effective tax rate could be affected by the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate.

	Three Months Ended										Three Months Ended
	June 30,				Change						September 30,				Change
	2023		2022		Amount			%			2023		2022		Amount			%
	(in thousands, except percentages)										(in thousands, except percentages)
Revenue:
SaaS	$	38,279	$	27,619	$	10,660			38.6	%	$	41,910	$	29,959	$	11,951			39.9	%
Term license and support		13,277		14,011		(734	)		(5.2	)%		16,293		18,288		(1,995	)		(10.9	)%
Services		10,066		9,848		218			2.2	%		11,194		10,458		736			7.0	%
Maintenance		3,247		4,223		(976	)		(23.1	)%		3,363		4,034		(671	)		(16.6	)%
Total revenue	$	64,869	$	55,701	$	9,168			16.5	%	$	72,760	$	62,739	$	10,021			16.0	%

	Six Months Ended										Nine Months Ended
	June 30,				Change						September 30,				Change
	2023		2022		Amount			%			2023		2022		Amount			%
	(in thousands, except percentages)										(in thousands, except percentages)
Revenue:
SaaS	$	73,791	$	54,172	$	19,619			36.2	%	$	115,701	$	84,131	$	31,570			37.5	%
Term license and support		24,181		24,213		(32	)		(0.1	)%		40,474		42,501		(2,027	)		(4.8	)%
Services		19,813		18,773		1,040			5.5	%		31,007		29,231		1,776			6.1	%
Maintenance		6,656		8,834		(2,178	)		(24.7	)%		10,019		12,868		(2,849	)		(22.1	)%
Total revenue	$	124,441	$	105,992	$	18,449			17.4	%	$	197,201	$	168,731	$	28,470			16.9	%

	Six Months Ended									Nine Months Ended
	June 30,				Change					September 30,				Change
	2023		2022		Amount		%			2023		2022		Amount		%
	(in thousands, except percentages)									(in thousands, except percentages)
North America	$	52,733	$	46,232	$	6,501		14.1	%	$	84,484	$	75,648	$	8,836		11.7	%
EMEA		39,061		32,912		6,149		18.7	%		60,800		51,938		8,862		17.1	%
APAC		32,647		26,848		5,799		21.6	%		51,917		41,145		10,772		26.2	%
Total	$	124,441	$	105,992	$	18,449		17.4	%	$	197,201	$	168,731	$	28,470		16.9	%

Period	Total number of shares purchased⁽¹⁾	Average price paid per share⁽²⁾	Total number of shares purchased as part of the Share Repurchase Program⁽³⁾	Maximum number (or approximate dollar value) of shares that may yet be purchased under the Share Repurchase Program⁽⁴⁾
April 1, 2023 - April 30, 2023	473,341	$4.0444	4,944,403	$126,334,871
May 1, 2023 - May 31, 2023	1,488,678	$5.2036	6,433,081	$118,588,427
June 1, 2023 - June 30, 2023	949,151	$5.8150	7,382,232	$113,069,096

	AVEPOINT, INC.

Date: ~~August~~November 9, 2023	/s/ Tianyi Jiang
	Name:	Tianyi Jiang
	Title:	Chief Executive Officer (Principal Executive Officer)