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Includes the current portion of operating lease liabilities of $5.3 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets. Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement. 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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒

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

 

For the quarterly period ended September 30, 2023

or

 

☐

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

 

For the transition period from __________ to ___________.

 

Commission file number: 001-39048

 

AvePoint, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

83-4461709

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

525 Washington Blvd, Suite 1400

Jersey City, NJ 07310

(Address of principal executive offices) (Zip Code)

 

(201) 793-1111

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report).

 

Securities registered pursuant to Section 12(b) of the Act:

 

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

 

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

 

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

 

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

 

Large accelerated filer ☐

Accelerated filer ☒

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

 

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

 

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

 

As of November 9, 2023, there were 183,661,782 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

 

 
Table of Contents

 

 
 

AVEPOINT, INC.

FORM 10-Q

For the Fiscal Quarter Ended September 30, 2023

TABLE OF CONTENTS

 

  Page
FORWARD-LOOKING STATEMENTS 3

PART I. FINANCIAL INFORMATION

5

Item 1. Financial Statements

5

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

27

Item 3. Quantitative and Qualitative Disclosures About Market Risk

44

Item 4. Controls and Procedures

45

PART II. OTHER INFORMATION

47

Item 1. Legal Proceedings

47

Item 1A. Risk Factors

47
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities  48
Item 3. Defaults Upon Senior Securities 48
Item 4. Mine Safety Disclosures 48
Item 5. Other Information 48

Item 6. Exhibits

49
Signatures 50

 

2
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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.

   

3
Table of Contents

 

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.

 

4
Table of Contents

 

 

PART I

Item 1

 

PART I. FINANCIAL INFORMATION.

 

Item 1. Financial Statements.

 

 

Index to Financial Statements (Unaudited)

  

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

 

5
Table of Contents

 

AvePoint, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except par value)

(Unaudited)

 

  

September 30,

  

December 31,

 
  

2023

  

2022

 

Assets

        

Current assets:

        

Cash and cash equivalents

 $205,786  $227,188 

Short-term investments

  3,478   2,620 

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

  8,276   10,013 

Total current assets

  286,869   306,295 

Property and equipment, net

  4,983   5,537 

Goodwill

  18,595   18,904 

Intangible assets, net

  10,427   11,079 

Operating lease right-of-use assets

  14,547   15,855 

Deferred contract costs

  50,232   48,553 

Other assets

  12,558   9,310 

Total assets

 $398,211  $415,533 

Liabilities, mezzanine equity, and stockholders’ equity

        

Current liabilities:

        

Accounts payable

 $1,855  $1,519 

Accrued expenses and other liabilities

  44,538   47,784 

Current portion of deferred revenue

  102,433   93,405 

Total current liabilities

  148,826   142,708 

Long-term operating lease liabilities

  9,982   11,348 

Long-term portion of deferred revenue

  6,296   8,085 

Earn-out shares liabilities

  13,822   6,631 

Other non-current liabilities

  5,183   3,607 

Total liabilities

  184,109   172,379 

Commitments and contingencies (Note 10)

          

Mezzanine equity

        

Redeemable noncontrolling interest

  13,991   14,007 

Total mezzanine equity

  13,991   14,007 

Stockholders’ equity

        

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

  659,892   665,715 

Treasury stock

  —   (21,666)

Accumulated other comprehensive income

  2,307   2,006 

Accumulated deficit

  (462,106)  (416,927)

Total stockholders’ equity

  200,111   229,147 

Total liabilities, mezzanine equity, and stockholders’ equity

 $398,211  $415,533 

 

See accompanying notes.

 

6
Table of Contents

 

 

AvePoint, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Revenue:

                                

SaaS

   $ 41,910     $ 29,959     $ 115,701     $ 84,131  

Term license and support

     16,293       18,288       40,474       42,501  

Services

     11,194       10,458       31,007       29,231  

Maintenance

     3,363       4,034       10,019       12,868  

Total revenue

     72,760       62,739       197,201       168,731  

Cost of revenue:

                                

SaaS

     9,561       7,164       26,586       18,934  

Term license and support

     484       524       1,441       1,600  

Services

     9,922       9,218       29,231       26,204  

Maintenance

     189       192       584       748  

Total cost of revenue

     20,156       17,098       57,842       47,486  

Gross profit

     52,604       45,641       139,359       121,245  

Operating expenses:

                                

Sales and marketing

     28,436       27,425       82,978       82,002  

General and administrative

     15,838       16,429       45,679       48,411  

Research and development

     8,643       9,214       26,931       23,850  

Total operating expenses

     52,917       53,068       155,588       154,263  

Loss from operations

     (313 )     (7,427 )     (16,229 )     (33,018 )

(Loss) gain on earn-out and warrant liabilities

     (2,785 )     913       (6,921 )     6,848  

Interest income, net

     232       16       843       50  

Other income (expense), net

     1,477       48       4,502       (822 )

Loss before income taxes

     (1,389 )     (6,450 )     (17,805 )     (26,942 )

Income tax expense

     2,841       336       8,132       99  

Net loss

   $ (4,230 )   $ (6,786 )   $ (25,937 )   $ (27,041 )

Net loss (income) attributable to and accretion of redeemable noncontrolling interest

     18       (626 )     (57 )     (1,870 )

Net loss attributable to AvePoint, Inc.

   $ (4,212 )   $ (7,412 )   $ (25,994 )   $ (28,911 )

Net loss available to common shareholders

   $ (4,212 )   $ (7,412 )   $ (25,994 )   $ (28,911 )

Basic and diluted loss per share

   $ (0.02 )   $ (0.04 )   $ (0.14 )   $ (0.16 )

Basic and diluted shares used in computing loss per share

     181,769       180,732       182,630       179,563  

 

See accompanying notes.

 

7
Table of Contents

 

 

AvePoint, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net loss

   $ (4,230 )   $ (6,786 )   $ (25,937 )   $ (27,041 )

Other comprehensive income (loss) net of taxes

                                

Unrealized loss on available-for-sale

     —       (190 )     —       —  

Foreign currency translation adjustments

     56       1,412       228       (281 )

Total other comprehensive income (loss)

     56       1,222       228       (281 )

Total comprehensive loss

   $ (4,174 )   $ (5,564 )   $ (25,709 )   $ (27,322 )

Comprehensive loss (income) attributable to redeemable noncontrolling interests

     18       (511 )     16       (1,680 )

Total comprehensive loss attributable to AvePoint, Inc

   $ (4,156 )   $ (6,075 )   $ (25,693 )   $ (29,002 )

 

See accompanying notes.

 

8
Table of Contents

 

 

AvePoint, Inc.

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

  Three Months Ended September 30, 2023 
  

Redeemable

  

Total

                  

Accumulated

     
  

noncontrolling

  

mezzanine

          

Additional

      

Other

  

Total

 
  

interest

  

equity

  

Common Stock

  

Paid-In

  

Accumulated

  

Comprehensive

  

Stockholders’

 
  

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

  —   —   288,180   —   625   —   —   625 

Common stock issued upon vesting of restricted stock units

  —   —   631,866   —   —   —   —   — 

Stock-based compensation expense

  —   —   —   —   9,285   —   —   9,285 

Reclassification of earn-out RSUs to earn-out shares

  —   —   —   —   (127)  —   —   (127)

Repurchase and retirement of common stock

  —   —   (2,647,605)  (1)  (9,495)  (7,144)  —   (16,640)

Comprehensive income (loss):

                                

Net loss

  —   —   —   —   —   (4,230)  —   (4,230)

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 

 

 

  Three Months Ended September 30, 2022 
  

Redeemable

  

Total

                          

Accumulated

     
  

noncontrolling

  

mezzanine

          

Additional

              

Other

  

Total

 
  

interest

  

equity

  

Common Stock

  

Paid-In

  

Treasury Stock

  

Accumulated

  

Comprehensive

  

Stockholders’

 
  

Amount

  

Amount

  

Shares

  

Amount

  

Capital

  

Shares

  

Amount

  

Deficit

  

Income

  

Equity

 

Balance, June 30, 2022

 $12,173  $12,173   181,330,816  $18  $644,931   2,045,226  $(11,791) $(396,796) $889  $237,251 

Proceeds from exercise of options

  —   —   59,800   —   98   —   —   —   —   98 

Common stock issued upon vesting of restricted stock units

  —   —   1,215,513   —   —   —   —   —   —   — 

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

  —   —   —   —   9,609   —   —   —   —   9,609 

Reclassification of earn-out RSUs to earn-out shares

  —   —   —   —   (186)  —   —   —   —   (186)

Repurchase of common stock

  —   —   (2,068,375)  —   —   2,068,375   (9,502)  —   —   (9,502)

Comprehensive income (loss):

                                        

Net loss

  —   —   —   —   —   —   —   (6,786)  —   (6,786)

Net income attributable to and accretion of redeemable noncontrolling interest

  626   626   —   —   —   —   —   (626)  —   (626)

Total other comprehensive income (loss)

  (115)  (115)  —   —   —   —   —   —   1,337   1,337 

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 

 

See accompanying notes.

 

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AvePoint, Inc.

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

(In thousands, except share amounts)

(Unaudited)

 

  Nine Months Ended September 30, 2023 
  

Redeemable

  

Total

                          

Accumulated

     
  

noncontrolling

  

mezzanine

          

Additional

              

Other

  

Total

 
  

interest

  

equity

  

Common Stock

  

Paid-In

  

Treasury Stock

  

Accumulated

  

Comprehensive

  

Stockholders’

 
  

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 

Proceeds from exercise of options

  —   —   2,063,783   —   3,865   —   —   —   —   3,865 

Common stock issued upon vesting of restricted stock units

  —   —   2,637,904   —   —   —   —   —   —   — 

Stock-based compensation expense

  —   —   —   —   26,975   —   —   —   —   26,975 

Reclassification of earn-out RSUs to earn-out shares

  —   —   —   —   (439)  —   —   —   —   (439)

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

  —   —   —   —   —   —   —   (25,937)  —   (25,937)

Net income attributable to and accretion of redeemable noncontrolling interest

  57   57   —   —   —   —   —   (57)  —   (57)

Total other comprehensive income (loss)

  (73)  (73)  —   —   —   —   —   —   301   301 

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

          
   

noncontrolling

    

mezzanine

                    

Additional

                            

Other

    

Total

  
   

interest

    

equity

    

Common Stock

    

Paid-In

    

Treasury Stock

    

Accumulated

    

Comprehensive

    

Stockholders’

  
   

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  

Proceeds from exercise of options

     —       —       1,216,079       —       1,817       —       —       —       —       1,817  

Common stock issued upon vesting of restricted stock units

     —       —       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

     —       —       —       —       28,279       —       —       —       —       28,279  

Issuance of redeemable noncontrolling interest in MaivenPoint Pte. Ltd. (1)

     5,794       5,794       —       —       —       —       —       —       —       —  

Reclassification of earn-out RSUs to earn-out shares

     —       —       —       —       (700 )     —       —       —       —       (700 )

Repurchase of common stock

     —       —       (3,970,037 )     —       —       3,970,037       (19,554 )     —       —       (19,554 )

Comprehensive income (loss):

                                                                                

Net loss

     —       —       —       —       —       —       —       (27,041 )     —       (27,041 )

Net income attributable to and accretion of redeemable noncontrolling interest

     1,870       1,870       —       —       —       —       —       (1,870 )     —       (1,870 )

Total other comprehensive loss

     (190 )     (190 )     —       —       —       —       —       —       (91 )     (91 )

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  

 

(1) Formerly AvePoint EduTech Pte. Ltd.

See accompanying notes.

 

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AvePoint, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

  

Nine Months Ended

 
  

September 30,

 
  

2023

  

2022

 

Operating activities

        

Net loss

 $(25,937) $(27,041)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

        

Depreciation and amortization

  3,439   2,255 

Operating lease right-of-use assets expense

  5,294   4,602 

Foreign currency remeasurement loss

  763   3,026 

Stock-based compensation

  26,975   28,287 

Deferred income taxes

  (240)  (154)

Other

  725   1,040 

Change in value of earn-out and warrant liabilities

  6,921   (6,754)

Changes in operating assets and liabilities:

        

Accounts receivable

  (4,633)  (6,661)

Prepaid expenses and other current assets

  1,663   (1,486)

Deferred contract costs and other assets

  (5,637)  (8,436)

Accounts payable, accrued expenses, operating lease liabilities and other liabilities

  (5,331)  (4,227)

Deferred revenue

  9,282   8,656 

Net cash provided by (used in) operating activities

  13,284   (6,893)

Investing activities

        

Maturities of investments

  1,292   180,837 

Purchases of investments

  (2,050)  (180,495)

Cash paid in business combinations and asset acquisitions, net of cash acquired

  —   (18,574)

Capitalization of internal-use software

  (988)  (1,165)

Purchase of property and equipment

  (1,478)  (3,420)

Investment in notes

  (1,000)  — 

Net cash used in investing activities

  (4,224)  (22,817)

Financing activities

        

Repurchase of common stock

  (33,644)  (19,554)

Proceeds from stock option exercises

  3,865   1,817 

Repayments of finance leases

  (30)  (23)

Net cash used in financing activities

  (29,809)  (17,760)

Effect of exchange rates on cash

  (653)  (2,966)

Net decrease in cash and cash equivalents

  (21,402)  (50,436)

Cash and cash equivalents at beginning of period

  227,188   268,217 

Cash and cash equivalents at end of period

 $205,786  $217,781 

Supplemental disclosures of cash flow information

        

Income taxes paid

 $5,794  $421 

Contingent consideration in business combinations

 $—  $5,635 

 

See accompanying notes.

 
 
 
11
Table of Contents
AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

1. Nature of Business and Organization

 

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

 

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

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated balance sheet as of December 31, 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 three and nine months ended  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.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Recently Adopted Accounting Guidance

 

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 GAAP. 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.

 

Comparative Data

 

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

 

 •The reclassification of perpetual license revenue to be included in maintenance revenue on the condensed consolidated statements of operations for the three and nine months ended 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 nine months ended 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 nine months ended 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 nine months ended September 30, 2022.

 

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2023 or December 31, 2022.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our condensed consolidated balance sheets and the amounts of revenue and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, stock-based compensation, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the Company’s condensed consolidated statements of operations. Transaction losses totaled $0.7 million and $1.3 million for the three and nine months ended September 30, 2023, respectively, and $1.3 million and $2.4 million for the three and nine months ended  September 30, 2022, respectively.

 

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers all investments available with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2023 and December 31, 2022, the Company’s cash balances at these entities were $7.0 million and $10.8 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

 

Short-Term Investments

 

Short-term investments consist mainly of certificates of deposit held by financial institutions which have an initial maturity greater than three months but less than or equal to one year at period end.

 

Prepaid Expenses and Other Current Assets

 

The prepaid expenses balances as of September 30, 2023 and December 31, 2022 were $7.3 million and $7.1 million, respectively.

 

Deferred Contract Costs

 

Amortization of deferred contract costs of $4.6 million and $13.1 million for the three and nine months ended September 30, 2023, respectively, and $3.4 million and $9.6 million for the three and nine months ended  September 30, 2022, respectively, is included as a component of sales and marketing expenses in our condensed consolidated statements of operations. Deferred contract costs recognized as a contract asset on our balance sheet were $50.2 million and $48.6 million at September 30, 2023 and December 31, 2022, respectively.

 

Revenue Recognition

 

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

 

Term license revenue recognized at point in time was $11.1 million and $24.9 million for the three and nine months ended September 30, 2023, respectively, and $13.7 million and $29.4 million for the three and nine months ended  September 30, 2022, respectively.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for doubtful accounts. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for doubtful accounts as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2023 and December 31, 2022 was $108.7 million and $101.5 million, respectively. Revenue recognized that was included at the beginning of the period deferred revenue balance was $78.3 million for the nine months ended September 30, 2023.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

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

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2022

 $73,348  $101,490  $48,553 

Balance, September 30, 2023

  78,264   108,729   50,232 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2023 and the year ended December 31, 2022 outside of its sales activities.

 

As of September 30, 2023, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $275.8 million, of which $218.6 million is related to SaaS and term license and support revenue. We expect to recognize approximately 63% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 

Treasury Stock Retirement

 

We account for treasury stock transactions under the cost method. For each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value, respectively. We periodically retire treasury shares that we acquire through share repurchases and return those shares to the status of authorized but unissued. When treasury shares are retired, we allocate the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and accumulated deficit. The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares. Any further excess of the repurchase price is allocated to accumulated deficit. 

 

Emerging Growth Company

 

The Company is considered an emerging growth company. 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 that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under Section 21E of the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can 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 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.

 

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.

 

Recent Accounting Pronouncements

 

Recently issued accounting pronouncements are not expected to have a material impact on our financial position, results of operations or cash flows upon adoption.

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

3. Goodwill

 

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

 

  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2022

 $18,904 

Acquisitions

  — 

Effect of foreign currency translation

  (309)

Balance as of September 30, 2023

 $18,595 

 
 

4. Intangible assets, net

 

Intangible assets consist of acquired intangible assets and self-developed software. Amortization expense for intangible assets was $0.6 million and $1.6 million for the three and nine months ended September 30, 2023, respectively, and $0.2 million and $0.4 million for the three and nine months ended  September 30, 2022, respectively. 

 

A summary of the balances of the Company's intangible assets as of  September 30, 2023 and  December 31, 2022 is presented below:

 

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
          

September 30,

          

December 31,

 
          

2023

          

2022

 
  

(in thousands)

 

Technology and software, net

 $7,774  $(1,741) $6,033  $6,842  $(777) $6,065 

Customer related assets, net

  4,432   (513)  3,919   4,799   (477)  4,322 

Content, net

  815   (340)  475   830   (138)  692 

Total

 $13,021  $(2,594) $10,427  $12,471  $(1,392) $11,079 

 

As of September 30, 2023, estimated future amortization expense for intangible assets, net is as follows:

 

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 
 

 

5. Concentration of Credit Risk

 

The Company deposits its cash with financial institutions and, at times, such balances may exceed federally insured limits. Additionally, no customer accounted for more than 10% of revenue for the three and nine months ended September 30, 2023 and 2022. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

6. Accounts Receivable, Net

 

Accounts receivable, net, consists of the following components:

 

  

September 30,

  

December 31,

 
  

2023

  

2022

 
  

(in thousands)

 

Trade receivables

 $50,729  $47,046 

Current unbilled receivables

  19,776   20,153 

Allowance for doubtful accounts

  (1,176)  (725)
  $69,329  $66,474 

 
 

7. Line of Credit

 

The Company maintained a loan and security agreement with HSBC Ventures Bank USA, Inc., (“HSBC Venture”) as lender, for a revolving line of credit of up to $30.0 million, with an accordion feature that provides up to $20.0 million of additional borrowing capacity the Company was permitted to draw upon at its request. The line bore interest at a rate equal to SOFR plus 3.6%. The line carried an unused fee of 0.5% per year. The line matured on September 7, 2023. As of September 30, 2023, the Company had no borrowings outstanding under the line of credit. We were required to maintain a specified adjusted quick ratio and a minimum annual recurring revenue tested by HSBC Venture each quarter. The Company pledged, assigned and granted HSBC Venture a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the loan and security agreement obligations.

 

Effective November 3, 2023, the Company entered into a loan and security agreement with HSBC Bank USA, National Association. See the section titled “Notes to Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report) under the sub-heading “Note 18 – Subsequent Events” for more information.
 

8. Income Taxes

 

The Company had an effective tax rate of (204.5)% and (45.7)% for the three and nine months ended September 30, 2023, respectively, and (5.2)% and (0.4)% for the three and nine months ended  September 30, 2022, respectively.

 

The change in effective tax rates for the three-month period ended September 30, 2023 as compared to the three-month period ended  September 30, 2022 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, and tax losses for which no benefit can be taken.

 

The change in effective tax rates for the nine-month period ended September 30, 2023 as compared to the nine-month period ended  September 30, 2022 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, impact of foreign inclusions, stock-based compensation and tax losses for which no benefits can be taken.

 

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

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

9. Leases

 

The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through 2030. We determine if an arrangement is a lease at inception.

 

The components of the Company's operating lease expenses are reflected in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Lease liability cost

 $1,798  $1,953  $5,294  $4,602 

Short-term lease expenses (1)

  138   173   592   1,522 

Variable lease cost not included in the lease liability (2)

  119   97   365   166 

Total lease cost

 $2,055  $2,223  $6,251  $6,290 

 

(1) Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.

 

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

 

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

 

During the nine months ended September 30, 2023 and 2022, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $3.7 million and $6.8 million, respectively.

 

Other information related to operating leases for the three and nine months ended September 30, 2023 and 2022, is as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,659  $1,594  $5,324  $4,100 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

As of September 30, 2023, our operating leases had a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 5.4%.


As of December 31, 2022, our operating leases had a weighted average remaining lease term of 4.4 years and a weighted average discount rate of 5.1%.
 
The maturity schedule of the operating lease liabilities as of September 30, 2023 is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2023 (three months)

 $1,599 

2024

  5,583 

2025

  3,762 

2026

  2,489 

2027

  1,711 

Thereafter

  2,001 

Total future lease payments

 $17,145 

Less: Present value adjustment

  (1,818)

Present value of future lease payments (1)

 $15,327 

 

(1) Includes the current portion of operating lease liabilities of $5.3 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.

 
 

10. Commitments and Contingencies

 

Legal Proceedings

 

In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of September 30, 2023, the Company was not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

 

Guarantees

 

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements, which are secured by certificates of deposit. As of September 30, 2023, letters of credit have been issued in the amount of $3.1 million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.

 

Notes Receivable

 

Other assets include yielding loan notes to a third party with a total commitment of up to $5.0 million and maturities of greater than twelve months. The notes bear interest at an annual rate equal to 8%. 

 

As of September 30, 2023 and December 31, 2022, $1.5 million and $0.5 million, respectively, were outstanding, and these amounts are included in other assets in the condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022, the difference between the carrying amount and estimated fair value for the notes receivables was immaterial. Fair values are based on discounted future cash flows using current interest rates offered for similar notes to third parties with similar credit ratings for the same remaining maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

 

11. Earn-Out and Warrant Liabilities

 

Company Earn-Out Agreement

 

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

 

 •

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.

 

The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of restricted stock units of the Company for a number of shares of AvePoint's common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “Company Earn-Out RSUs”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718, Compensation-Stock Compensation (“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’ (as defined below) contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on July 1, 2021 was determined to be $29.6 million. The fair value was remeasured as of September 30, 2023 and December 31, 2022, and was determined to be $13.8 million and $6.6 million, respectively, and included in the earn-out shares liabilities in the condensed consolidated balance sheets. As a result, $2.8 million and $6.8 million losses were recognized during the three and nine months ended September 30, 2023, respectively, and $0.8 million and $6.6 million gains were recognized during the three and nine months ended  September 30, 2022, respectively, and included as (loss) gain on earn-out and warrant liabilities in the condensed consolidated statements of operations. We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:

 

  

September 30,

 
  2023 

Term (in years)

  4.76 

Volatility

  55.00

%

 

Private Warrants to Acquire Common Stock

 

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

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The private placement warrants are held by only two parties and any transfer of the warrants to a party other than a current holder of the warrants would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $1.4 million. The fair value was remeasured as of September 30, 2023 and December 31, 2022, and was determined to be $0.4 million and $0.2 million, respectively, and included in the other non-current liabilities in the condensed consolidated balance sheets. As a result, $0.1 million and $0.2 million losses were recognized during the three and nine months ended September 30, 2023, respectively, and $0.1 million and $0.2 million gains were recognized during the three and nine months ended  September 30, 2022, respectively, and included as (loss) gain on earn-out and warrant liabilities in the condensed consolidated statements of operations. 
 

12. Mezzanine Equity and Stockholders’ Equity

 

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

 

Common Stock

 

Pursuant to the Company’s restated Articles of Incorporation, the Company was authorized to issue up to 1,000,000,000 shares of common stock at $0.0001 par value. There were 183,995,624 and 189,467,338 shares issued and outstanding, including treasury shares, if any, at September 30, 2023 and December 31, 2022, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company's Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception. On June 30, 2023, the Company retired 7,525,796 shares of its common stock held in treasury. For the three months ended September 30, 2023, the Company repurchased and retired 2,647,605 shares. The shares were returned to the status of authorized but unissued shares. As a result, common stock amount, additional paid-in capital, and accumulated deficit in the condensed consolidated balance sheet were reduced by $0 million, $36.2 million, and $19.2 million, respectively.

 

Share Repurchase Program

 

On March 17, 2022, the Company announced that its Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to a maximum of $150 million of 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 and may be suspended or discontinued at any time. The Company is not obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During the nine months ended September 30, 2023, the Company repurchased 5,983,651 shares at an average price of $5.62 per share.

 

Sponsor Earn-Out Shares

 

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

 

 •

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.

 

The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of  September 30, 2023.

 

Public Warrants to Acquire Common Stock

 

On July 1, 2021, the Company issued 17,500,000 public warrants with an exercise price of $11.50. Each warrant entitles the registered holder to purchase one share of AvePoint's common stock and the warrants are exercisable from the date of issuance through July 1, 2026. At  September 30, 2023, all 17,500,000 warrants remained outstanding. 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

13. Stock-Based Compensation

 

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”). As of September 30, 2023, 22,975,201 shares remained for future issuance under the 2021 Plan. To date, the Company has issued only stock options and restricted stock units to employees, directors and consultants. 

 

The Company records stock-based compensation in cost of revenue, sales and marketing, general and administrative and research and development. Stock-based compensation was included in the following line items:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cost of revenue

 $806  $667  $2,292  $1,948 

Sales and marketing

  2,358   2,847   7,267   8,705 

General and administrative

  5,264   5,060   14,551   14,825 

Research and development

  857   1,035   2,865   2,809 

Total stock-based compensation

 $9,285  $9,609  $26,975  $28,287 

 

Stock Options

 

The compensation costs for stock option awards are accounted for in accordance with ASC 718. Stock options vest over a four-year service period and expire on the tenth anniversary of the date of award. 

 

On  March 13, 2023, the Company granted 1,125,374 options under the 2021 Plan. The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

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

 

To estimate the expected life of stock options, the Company considered the vesting term, contractual expiration period, and market conditions. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Based on these inputs, the grant-date fair value was determined to be $2.8 million.

 

As of September 30, 2023, there was $18.6 million in unrecognized compensation costs related to all unvested options.

 

As of  September 30, 2023, the Company had 27,981,601 options outstanding and 20,951,139 options exercisable with intrinsic values of $86.7 million and $75.7 million, respectively. During the nine months ended September 30, 2023, 2,063,783 options were exercised, with a total intrinsic value of $7.3 million.

 

Restricted Stock Units

 

6,606,932 restricted stock units (“RSUs”) were granted under the 2021 Plan during the nine months ended September 30, 2023, with a weighted-average grant date fair-value of $4.30 per RSU. The compensation costs for RSUs are accounted for in accordance with ASC 718. RSUs vest over a four-year service period from the grant date. The RSUs are measured at the fair market value of the underlying stock at the grant date. As of September 30, 2023, there was $59.2 million in unrecognized compensation costs specific to the unvested RSUs under the 2021 Plan.

 

Company Earn-Out RSUs

 

The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC 718. In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on July 1, 2021, was determined to be $2.5 million. The stock options underlying the Earn-Out RSUs vest over a four-year period and expire on the tenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs are not met by July 1, 2028, the holders of the underlying stock options will not receive the Earn-Out RSUs. 

 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

14. Financial Instruments

 

Fair value is defined by ASC 820, Fair Value Measurement (“ASC 820”) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

 

 

•

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

 

•

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

 

•

Level 3 — Unobservable inputs for the asset or liability.

   

  

September 30, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (1)

 $—  $1,483  $—  $1,483 

Money market funds (2)

  —   4,108   —   4,108 

U.S. treasury bills

  —   169,793   —   169,793 

Short term investments:

                

Certificates of deposit (1)

  —   3,478   —   3,478 

Total

 $—  $178,862  $—  $178,862 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (3)

 $—  $—  $13,822  $13,822 

Other non-current liabilities:

                

Warrant liabilities (3)

  —   397   —   397 

Total

 $—  $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 

 

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

(2) Profits on securities for the three and nine months ended September 30, 2023 were $2.2 million and $5.8 million, respectively, and for the three and nine months ended September 30, 2022 were $1.2 million and $1.2 million, respectively.

(3) Refer to “Note 11 — Earn-Out and Warrant Liabilities” for further details.

  

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 

The following table presents the reconciliation in Level 3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis for the nine months ended September 30, 2023.

 

  Nine Months Ended September 30, 
  

2023

 
  

(in thousands)

 

Opening balance

 $6,631 

Total gains or losses from the period

    

Included in (loss) gain on earn-out and warrant liabilities

  6,752 

Reclass from Earnout-RSU

  439 

Closing balance

 $13,822 

 
 

15. Segment Information

 

The Company operates in one segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation, expense allocation or profitability by product or geography.

 

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

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

North America

 $31,751  $29,416  $84,484  $75,648 

EMEA

  21,739   19,026   60,800   51,938 

APAC

  19,270   14,297   51,917   41,145 

Total revenue

 $72,760  $62,739  $197,201  $168,731 

 

The following table sets forth revenue generated by countries which represent more than 10% of total consolidated revenue:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

United States

 $31,115  $29,229  $82,151  $75,461 

Germany

  9,212   8,576   25,993   22,494 

Singapore

  8,639   5,697   22,256   14,893 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
 

16. Loss Per Share

 

Basic loss per share available to AvePoint common shareholders (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding for the period. In computing diluted EPS, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share based payment awards, warrants, earn-outs and the conversion of convertible preferred shares. AvePoint applies the two-class method in calculating loss per share. AvePoint’s Sponsor Earn-Out Shares described in “Note 12 — Mezzanine Equity and Stockholders’ Equity” are considered participating securities and have no contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below. As losses were incurred during all periods presented, no earnings per share exists for the Sponsor Earn-Out Shares.

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands, except per share amounts)

 

Loss per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net loss

 $(4,230) $(6,786) $(25,937) $(27,041)

Net loss (income) attributable to and accretion of redeemable noncontrolling interest

  18   (626)  (57)  (1,870)

Net loss attributable to AvePoint, Inc.

 $(4,212) $(7,412) $(25,994) $(28,911)

Total net loss available to common shareholders

 $(4,212) $(7,412) $(25,994) $(28,911)

Denominator:

                

Weighted average common shares outstanding

  181,769   180,732   182,630   179,563 

Effect of dilutive securities

  —   —   —   — 

Weighted average diluted shares

  181,769   180,732   182,630   179,563 
                 

Basic and diluted loss per share available to common shareholders, excluding sponsor earn-out shareholders

 $(0.02) $(0.04) $(0.14) $(0.16)

 

To arrive at net loss available to common shareholders, the Company deducted net income attributable to the redeemable noncontrolling interest.

 

For the three and nine months ended September 30, 2023 and 2022, the Company’s potentially dilutive securities were deemed to be anti-dilutive given the Company’s net loss position. As such, basic loss per share is equal to diluted loss per share for the periods presented.

 

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:

 

  

September 30,

 
  

2023

  

2022

 
  

(in thousands)

 

Stock options

  27,982   29,867 

Restricted stock units

  11,533   8,490 

Warrants

  17,905   17,905 

Company Earn-Outs

  3,000   3,000 

Total potentially dilutive securities

  60,420   59,262 
 

 

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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

 

17. Related Party Transactions

 

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

18. Subsequent Events

 

On November 3, 2023 we entered into a loan and security agreement (the “Loan Agreement”) with HSBC Bank USA, National Association, as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may draw at our request. The currently bears interest at a rate of 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. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. The line will mature on November 3, 2026.

 
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AvePoint, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Table of Contents
 

 
 
 
 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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 this section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Quarterly Report)(“MD&A”), and the sections titled “Special Note Regarding Forward-Looking Statements,” “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 and Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 (our "Annual Report")).

 

The following MD&A summarizes (and is intended to help the reader understand) the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The MD&A should be read in conjunction with our Annual Report and our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report. 

 

Third Quarter 2023 Business Highlights

 

 

▪

Total ARR increased 23% year-over-year to $250.6 million as of September 30, 2023. On an FX adjusted basis, total ARR increased 25% year-over-year;
 

▪

Total revenue increased 16% year-over-year to $72.8 million for the three months ended September 30, 2023;
  ▪ SaaS revenue increased 40% year-over-year to $41.9 million for the three months ended September 30, 2023;
  ▪ Introduced AvePoint EnPower, which helps organizations more proactively analyze, govern and optimize their SaaS management and operations across Microsoft 365 and Power Platform, in turn enabling greater operational efficiency and automated governance; and
  ▪ Announced certification against the ISO information security management system audit using the 27701:2019 framework for the first time, and the 27001:2013 and 27017:2015 frameworks for the second consecutive year, demonstrating the Company's prioritization of security and privacy for AvePoint and its customers.

 

Overview

 

AvePoint provides a cloud-native platform that organizations rely on to optimize IT 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.

 

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Item 2

 

Key Business Metric

 

   

September 30,

  
   

2023

    

2022

  

Total ARR ($ in mil)

   $ 250.6     $ 203.8  

 

Annual Recurring Revenue

  

We calculate our annual recurring revenue (“ARR”) at the end of a particular period as the annualized sum of contractually obligated Annual Contract Value (“ACV”) from SaaS, term license and support, and maintenance revenue sources from all active customers.

 

As of September 30, 2023 and September 30, 2022, total ARR was $250.6 million and $203.8 million, respectively, representing growth of 23%. Growth in ARR is driven by both new business and the expansion of existing business.

 

We believe ARR is indicative of growth in recurring revenue streams, leading to higher revenue growth in future periods. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with, or to replace, either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

 

Beginning in 2023, the Company is including its migration products in the calculation of ARR. Prior periods have also been restated to include migration products.

 

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Components of Results of Operations

 

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.

 

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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.

 

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Results of Operations

 

The below period-to-period comparisons of operating results are not necessarily indicative of results for future periods.

  

Comparison of Three Months Ended September 30, 2023 and September 30, 2022

 

Revenue

 

The components of AvePoint’s revenue during the three months ended September 30, 2023 and 2022 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Revenue:

                                

SaaS

   $ 41,910     $ 29,959     $ 11,951       39.9 %

Term license and support

     16,293       18,288       (1,995 )     (10.9 )%

Services

     11,194       10,458       736       7.0 %

Maintenance

     3,363       4,034       (671 )     (16.6 )%

Total revenue

   $ 72,760     $ 62,739     $ 10,021       16.0 %

 

Total revenue increased 16.0% to $72.8 million for the three months ended September 30, 2023, primarily as a result of an increase in SaaS revenue. For the three months ended September 30, 2023, SaaS revenue increased 39.9% to $41.9 million, as we saw strong customer demand for this offering. For the three months ended September 30, 2023, SaaS revenues represented 58% of total revenue, up from 48% of total revenue in the prior year. The increase in SaaS revenue was partially offset by an expected decrease in both term license and support and maintenance revenue for the three months ended September 30, 2023. Term license revenue for the three months ended September 30, 2023 and 2022 includes $11.1 million and $13.7 million of revenue recognized at a point in time, respectively.

 

Services revenue is expected to fluctuate as the offerings are not inherently recurring in nature. Additionally, maintenance revenue is expected to continue declining as we have shifted away from the sale of perpetual licenses and towards SaaS and term licenses. Without perpetual license sales, there will be limited opportunities to sell maintenance contracts to new customers. Existing customers have and will continue to transition to SaaS and term licenses, which will continue the decline in maintenance revenue. 

 

Revenue by geographic region for the three months ended September 30, 2023 and 2022 was as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

North America

   $ 31,751     $ 29,416     $ 2,335       7.9 %

EMEA

     21,739       19,026       2,713       14.3 %

APAC

     19,270       14,297       4,973       34.8 %

Total

   $ 72,760     $ 62,739     $ 10,021       16.0 %

 

For the three months ended September 30, 2023, North America revenue increased 7.9% to $31.8 million, driven by a 27.8%, or $3.9 million, increase in SaaS revenue, partially offset by a $1.6 million net decrease in term license and support, services, and maintenance revenues. EMEA revenues increased 14.3% to $21.7 million, driven by a 51.0%, or $5.3 million, increase in SaaS revenue, partially offset by a combined $2.6 million decrease in term license and support, services and maintenance revenues. APAC revenues increased 34.8% to $19.3 million, driven by a 50.0%, or $2.7 million, increase in SaaS revenue, a 42.6%, or $2.3 million, increase in services revenue, and a combined $0.1 million decrease in term license and support and maintenance revenues. 

 

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Cost of Revenue, Gross Profit, and Gross Margin

 

Cost of revenue, gross profit, and gross margin during the three months ended September 30, 2023 and 2022 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Cost of revenue:

                                

SaaS

   $ 9,561     $ 7,164     $ 2,397       33.5 %

Term license and support

     484       524       (40 )     (7.6 )%

Services

     9,922       9,218       704       7.6 %

Maintenance

     189       192       (3 )     (1.6 )%

Total cost of revenue

   $ 20,156     $ 17,098     $ 3,058       17.9 %

Gross profit

     52,604       45,641       6,963       15.3 %

Gross margin

     72.3 %     72.7 %     —       —  
                                 

GAAP cost of revenue

   $ 20,156     $ 17,098     $ 3,058       17.9 %

Stock-based compensation expense

     (806 )     (667 )     (139 )     20.8 %

Amortization of acquired intangible assets

     (241 )     (133 )     (108 )     81.2 %

Non-GAAP cost of revenue

   $ 19,109     $ 16,298     $ 2,811       17.2 %

Non-GAAP gross profit

     53,651       46,441       7,210       15.5 %

Non-GAAP gross margin

     73.7 %     74.0 %     —       —  

 

Cost of revenue increased 17.9% to $20.2 million for the three months ended September 30, 2023, primarily driven by a $2.0 million increase from higher aggregate hosting costs resulting from increased SaaS revenue, and a $0.8 million increase related to higher personnel costs. 

 

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Operating Expenses

 

Sales and Marketing

 

Sales and marketing expenses during the three months ended September 30, 2023 and 2022 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Sales and marketing

   $ 28,436     $ 27,425     $ 1,011       3.7 %

Percentage of revenue

     39.1 %     43.7 %     —       —  
                                 

GAAP sales and marketing

   $ 28,436     $ 27,425     $ 1,011       3.7 %

Stock-based compensation expense

     (2,358 )     (2,847 )     489       (17.2 )%

Amortization of acquired intangible assets

     (112 )     (96 )     (16 )     16.7 %

Non-GAAP sales and marketing

   $ 25,966     $ 24,482     $ 1,484       6.1 %

Non-GAAP percentage of revenue

     35.7 %     39.0 %     —       —  

 

Sales and marketing expenses increased 3.7% to $28.4 million for the three months ended September 30, 2023, primarily driven by higher commission expense and third-party marketing spend, partially offset by lower personnel costs.

 

General and Administrative

 

General and administrative expenses during the three months ended September 30, 2023 and 2022 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

General and administrative

   $ 15,838     $ 16,429     $ (591 )     (3.6 )%

Percentage of revenue

     21.8 %     26.2 %     —       —  
                                 

GAAP general and administrative

   $ 15,838     $ 16,429     $ (591 )     (3.6 )%

Stock-based compensation expense

     (5,264 )     (5,060 )     (204 )     4.0 %

Non-GAAP general and administrative

   $ 10,574     $ 11,369     $ (795 )     (7.0 )%

Non-GAAP percentage of revenue

     14.5 %     18.1 %     —       —  

 

General and administrative expenses decreased 3.6% to $15.8 million for the three months ended September 30, 2023. The decrease was primarily driven by a $0.2 million decrease in facilities and related costs and a $0.3 million decrease in liability insurance costs.

 

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Research and Development

 

Research and development expenses during the three months ended September 30, 2023 and 2022 were as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Research and development

   $ 8,643     $ 9,214     $ (571 )     (6.2 )%

Percentage of revenue

     11.9 %     14.7 %     —       —  
                                 

GAAP research and development

   $ 8,643     $ 9,214     $ (571 )     (6.2 )%

Stock-based compensation expense

     (857 )     (1,035 )     178       (17.2 )%

Non-GAAP research and development

   $ 7,786     $ 8,179     $ (393 )     (4.8 )%

Non-GAAP percentage of revenue

     10.7 %     13.0 %     —       —  

 

Research and development expenses  decreased   6.2%  to $8.6  million for the three months ended September 30, 2023 , primarily driven by a $0.7 million decrease in personnel costs, partially offset by a $0.1 million increase in rent and travel costs.

 

Income Tax Provision

 

Income tax expense during the three months ended September 30, 2023 and 2022 was as follows:

 

   

Three Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Income tax expense

   $ 2,841     $ 336     $ 2,505       745.5 %

 

AvePoint's income tax expense for the three months ended September 30, 2023 was $2.8 million, as compared to a tax expense of $0.3 million for the three months ended September 30, 2022. The effective tax rate was (204.5)% for the three months ended September 30, 2023, compared to (5.2)% for the three months ended September 30, 2022. The change in effective tax rates was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, certain jurisdictions with separate tax expense calculated, impact of foreign inclusions, stock-based compensation, and tax losses for which no benefit can be taken.

 

In assessing the need for a valuation allowance, the Company has considered all available positive and negative evidence including its historical levels of income, expectations of future taxable income, future reversals of existing taxable temporary differences and ongoing tax planning strategies. If in the future, the Company determines it is more likely than not that deferred tax assets will not be realized, the Company may set up a valuation allowance, which may result in income tax expense in the Company’s condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss.

  

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Comparison of Nine Months Ended September 30, 2023 and September 30, 2022

 

Revenue

 

The components of AvePoint’s revenue during the nine months ended September 30, 2023 and 2022 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Revenue:

                                

SaaS

   $ 115,701     $ 84,131     $ 31,570       37.5 %

Term license and support

     40,474       42,501       (2,027 )     (4.8 )%

Services

     31,007       29,231       1,776       6.1 %

Maintenance

     10,019       12,868       (2,849 )     (22.1 )%

Total revenue

   $ 197,201     $ 168,731     $ 28,470       16.9 %

 

Total revenue increased 16.9% to $197.2 million for the nine months ended September 30, 2023, primarily as a result of an increase in SaaS revenue. For the nine months ended September 30, 2023, SaaS revenue increased 37.5% to $115.7 million, as we saw strong customer demand for this offering. For the nine months ended September 30, 2023, SaaS revenues represented 59% of total revenue, up from 50% of total revenue in the prior year. The increase in SaaS revenue was partially offset by an expected decrease in both term license and support and maintenance revenue for the nine months ended September 30, 2023. Term license revenue for the nine months ended September 30, 2023 and 2022 includes $24.9 million and $29.4 million of revenue recognized at a point in time, respectively.

 

Revenue by geographic region for the nine months ended September 30, 2023 and 2022 was as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

North America

   $ 84,484     $ 75,648     $ 8,836       11.7 %

EMEA

     60,800       51,938       8,862       17.1 %

APAC

     51,917       41,145       10,772       26.2 %

Total

   $ 197,201     $ 168,731     $ 28,470       16.9 %

 

For the nine months ended September 30, 2023, North America revenue increased 11.7% to $84.5 million, driven by a 31.4%, or $12.2 million, increase in SaaS revenue, partially offset by a $3.4 million combined net decrease in term license and support, services, and maintenance revenues. EMEA revenues increased 17.1% to $60.8 million, driven by a 42.2%, or $12.6 million, increase in SaaS revenue, partially offset by a $3.8 million combined net decrease in term license and support, services, and maintenance revenues. APAC revenues increased 26.2% to $51.9 million, driven by a 44.1%, or $6.8 million, increase in SaaS revenue and a $4.3 million increase in services revenue, partially offset by a $0.3 million net decrease in term license and support and maintenance revenue.

 

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Cost of Revenue, Gross Profit, and Gross Margin

 

Cost of revenue, gross profit, and gross margin during the nine months ended September 30, 2023 and 2022 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Cost of revenue:

                                

SaaS

   $ 26,586     $ 18,934     $ 7,652       40.4 %

Term license and support

     1,441       1,600       (159 )     (9.9 )%

Services

     29,231       26,204       3,027       11.6 %

Maintenance

     584       748       (164 )     (21.9 )%

Total cost of revenue

   $ 57,842     $ 47,486     $ 10,356       21.8 %

Gross profit

     139,359       121,245       18,114       14.9 %

Gross margin

     70.7 %     71.9 %     —       —  
                                 

GAAP cost of revenue

   $ 57,842     $ 47,486     $ 10,356       21.8 %

Stock-based compensation expense

     (2,292 )     (1,948 )     (344 )     17.7 %

Amortization of acquired intangible assets

     (725 )     (224 )     (501 )     223.7 %

Non-GAAP cost of revenue

   $ 54,825     $ 45,314     $ 9,511       21.0 %

Non-GAAP gross profit

     142,376       123,417       18,959       15.4 %

Non-GAAP gross margin

     72.2 %     73.1 %     —       —  

 

Cost of revenue increased 21.8% to $57.8 million for the nine months ended September 30, 2023, primarily driven by a $6.4 million increase from higher aggregate hosting costs resulting from increased SaaS revenue and a $3.1 million increase related to higher personnel costs.

 

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Operating Expenses

 

Sales and Marketing

 

Sales and marketing expenses during the nine months ended September 30, 2023 and 2022 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

       %
   

(in thousands, except percentages)

  

Sales and marketing

   $ 82,978     $ 82,002     $ 976       1.2 %

Percentage of revenue

     42.1 %     48.6 %     —       —  
                                 

GAAP sales and marketing

   $ 82,978     $ 82,002     $ 976       1.2 %

Stock-based compensation expense

     (7,267 )     (8,705 )     1,438       (16.5 )%

Amortization of acquired intangible assets

     (381 )     (204 )     (177 )     86.8 %

Non-GAAP sales and marketing

   $ 75,330     $ 73,093     $ 2,237       3.1 %

Non-GAAP percentage of revenue

     38.2 %     43.3 %     —       —  

 

Sales and marketing expenses increased 1.2% to $83.0 million for the nine months ended September 30, 2023, which was primarily driven by higher commission expense, partially offset by lower third-party marketing spend and personnel costs.

 

General and Administrative

 

General and administrative expenses during the nine months ended September 30, 2023 and 2022 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

General and administrative

   $ 45,679     $ 48,411     $ (2,732 )     (5.6 )%

Percentage of revenue

     23.2 %     28.7 %     —       —  
                                 

GAAP general and administrative

   $ 45,679     $ 48,411     $ (2,732 )     (5.6 )%

Stock-based compensation expense

     (14,551 )     (14,825 )     274       (1.8 )%

Non-GAAP general and administrative

   $ 31,128     $ 33,586     $ (2,458 )     (7.3 )%

Non-GAAP percentage of revenue

     15.8 %     19.9 %     —       —  

 

General and administrative expenses decreased 5.6% to $45.7 million for the nine months ended September 30, 2023. The decrease was primarily driven by a $1.1 million decrease in personnel related costs, a $0.7 million decrease in facilities expenses, and a $0.5 million decrease in insurance expenses.

 

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Research and Development

 

Research and development expenses during the nine months ended September 30, 2023 and 2022 were as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Research and development

   $ 26,931     $ 23,850     $ 3,081       12.9 %

Percentage of revenue

     13.7 %     14.1 %     —       —  
                                 

GAAP research and development

   $ 26,931     $ 23,850     $ 3,081       12.9 %

Stock-based compensation expense

     (2,865 )     (2,809 )     (56 )     2.0 %

Non-GAAP research and development

   $ 24,066     $ 21,041     $ 3,025       14.4 %

Non-GAAP percentage of revenue

     12.2 %     12.5 %     —       —  

 

Research and development expenses increased 12.9% to $26.9 million for the nine months ended September 30, 2023, primarily driven by a $2.6 million increase in headcount and personnel costs. The increase in headcount further supports the Company's continued efforts to develop new offerings and improve its existing offerings.

 

Income Tax Provision

 

Income tax expense during the nine months ended September 30, 2023 and 2022 was as follows:

 

   

Nine Months Ended

                  
   

September 30,

    

Change

  
   

2023

    

2022

    

Amount

    

%

  
   

(in thousands, except percentages)

  

Income tax expense

   $ 8,132     $ 99     $ 8,033       8,114.1 %

 

AvePoint's income tax expense for the nine months ended September 30, 2023 was $8.1 million, as compared to a tax expense of $0.1 million for the nine months ended September 30, 2022. The effective tax rate was (45.7)% for the nine months ended September 30, 2023, compared to (0.4)% for the nine months ended September 30, 2022. The change in effective tax rates was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, certain jurisdictions with separate tax expense calculated, impact of foreign inclusions, stock-based compensation, and tax losses for which no benefit can be taken.

 

In assessing the need for a valuation allowance, the Company has considered all available positive and negative evidence including its historical levels of income, expectations of future taxable income, future reversals of existing taxable temporary differences and ongoing tax planning strategies. If in the future, the Company determines it is more likely than not that deferred tax assets will not be realized, the Company may set up a valuation allowance, which may result in income tax expense in the Company’s condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss.

 

Certain Non-GAAP Financial Measures

 

We believe that, in addition to our financial results determined in accordance with GAAP, non-GAAP operating income (loss) and non-GAAP operating margin are useful in evaluating our business, results of operations, and financial condition.

 

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Non-GAAP Operating Income (loss) and Non-GAAP Operating Margin

 

Non-GAAP operating income (loss) and non-GAAP operating margin are non-GAAP financial measures that our management uses to assess our overall performance. We define non-GAAP operating income (loss) as GAAP operating income (loss) plus stock-based compensation and the amortization of acquired intangible assets. We define non-GAAP operating margin as non-GAAP operating income divided by revenue. We believe non-GAAP operating income (loss) and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics eliminate the effects of stock-based compensation which has had historical volatility from period to period due to marked-to-market securities, and of acquired intangible assets, which are unrelated to current operations and are neither comparable to the prior period nor predictive of future results. We believe the elimination of the effect of variability caused by stock-based compensation expense and the amortization of acquired assets, both of which are non-cash expenses, provides a better representation as to the overall operating performance of the Company. We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to our peers, (b) to set and approve spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, and (e) to assess financial discipline over operational expenditures.

 

Non-GAAP operating income (loss) and non-GAAP operating margin should not be considered as an alternative to operating income, operating margin or any other performance measures derived in accordance with GAAP as measures of performance. Non-GAAP operating income (loss) and non-GAAP operating margin should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

 

The following table presents a reconciliation of (i) non-GAAP operating income (loss) from the most comparable GAAP measure, operating income, and (ii) non-GAAP operating margin from the most comparable GAAP measure, operating margin, for the periods presented:

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  
   

(in thousands, except percentages)

  

GAAP operating loss

   $ (313 )   $ (7,427 )   $ (16,229 )   $ (33,018 )

GAAP operating margin

     (0.4 )%     (11.8 )%     (8.2 )%     (19.6 )%

Add:

                                

Stock-based compensation

     9,285       9,609       26,975       28,287  

Amortization of acquired intangible assets

     353       229       1,106       428  

Non-GAAP operating income (loss)

   $ 9,325     $ 2,411     $ 11,852     $ (4,303 )

Non-GAAP operating margin

     12.8 %     3.8 %     6.0 %     (2.6 )%

 

Liquidity and Capital Resources

 

As of September 30, 2023, we had $205.8 million in cash and cash equivalents and $3.5 million in short-term investments.

 

Our short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. Our long-term capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, and the timing of new product introductions.

 

We also maintained a loan and security agreement with HSBC Venture Bank USA, Inc., (“HSBC Venture”) as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we were permitted to draw upon at our request. The line bore interest at a rate equal to SOFR plus 3.6%. The line carried an unused fee of 0.5%. We were required to maintain a specified adjusted quick ratio and a minimum annual recurring revenue tested by HSBC Venture each quarter. We had pledged, assigned and granted HSBC Venture a security interest in all shares of our subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as a security for the performance of the loan and security agreement obligations. The line matured on September 7, 2023.

 

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Item 2

 

We currently maintain a loan and security agreement (the "Loan Agreement"), dated as of November 3, 2023, with HSBC Bank USA, National Association, (“HSBC”) as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may to draw upon at our request. The line currently bears 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. The line will mature on November 3, 2026. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. We pledged, assigned, and granted HSBC a security interest in all shares of our subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as a security for the performance of the loan and security agreement obligations.

 

We believe that our existing cash, cash equivalents and short-term investments, our cash flows from operating activities, and our borrowing capacity under our credit facility with HSBC are sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. In the future, we may attempt to raise additional capital through the sale of additional equity or debt financing. The sale of additional equity would be dilutive to our stockholders. Additional debt financing could result in increased debt service obligations and more restrictive financial and operational covenants.

 

Cash Flows

 

The following table sets forth a summary of AvePoint’s cash flows for the periods indicated.

 

   

Nine Months Ended

  
   

September 30,

  
   

2023

    

2022

  
    (in thousands)  

Net cash provided by (used in) operating activities

   $ 13,284     $ (6,893 )

Net cash used in investing activities

     (4,224 )     (22,817 )

Net cash used in financing activities

     (29,809 )     (17,760 )

 

Operating Activities

 

Net cash provided by operating activities for the nine months ended September 30, 2023 was $13.3 million, reflecting AvePoint’s net loss of $25.9 million, adjusted for non-cash items of $43.9 million and net cash outflows of $4.7 million from changes in its operating assets and liabilities. The primary drivers of non-cash items were stock-based compensation which reflects ongoing compensation and an increase in the mark to market value of earn-out and warranty liabilities. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to timing of customer invoices and decrease in prepaid expenses and other current assets primarily related to prepaid insurance, an increase in deferred revenue and a decrease in accrued expenses primarily due to accrued bonuses, commissions and VAT/sales tax payable.

 

Net cash used in operating activities for the nine months ended September 30, 2022 was $6.9 million, reflecting AvePoint’s net loss of $27.0 million, adjusted for non-cash items of $32.3 million and net cash outflows of $12.2 million from changes in its operating assets and liabilities. The primary drivers of non-cash items were stock-based compensation which reflects ongoing compensation partially offset by a decrease in the mark to market value of earn-out and warranty liabilities. The drivers of changes in operating assets and liabilities are seasonal in nature. These drivers are related to a decrease in accounts receivable due primarily to timing of customer invoices and decrease in prepaid expenses and other current assets primarily related to prepaid insurance and offset by a decrease in accrued expenses primarily due to the payment of accrued bonuses and commissions.

 

Investing Activities

 

Net cash used in investing activities for the nine months ended September 30, 2023 was $4.2 million. It primarily consisted of $2.1 million of purchases of short-term investments, $1.5 million of purchases of property and equipment, and $1.0 million from the capitalization of internal use software, and partially offset by $1.3 million in the maturity of short-term investments.

 

Net cash used in investing activities for the nine months ended September 30, 2022 was $22.8 million. It primarily consisted of $180.5 million of purchases of short-term investments, $18.6 million as a result of acquisition activities, $3.4 million of purchases of property and equipment, and $1.2 million capitalization of internal use software, partially offset by $180.8 million in the maturity of short-term investments.

 

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Table of Contents
Part I
Item 2

 

Financing Activities

 

Net cash used in financing activities for the nine months ended September 30, 2023 was $29.8 million. The primary driver of cash used in financing activities was $33.6 million in repurchases of common stock under the previously announced Share Repurchase Program that authorizes us to repurchase up to $150 million of our common shares (the "Share Repurchase Program"), partially offset by $3.9 million of proceeds from the exercise of stock options.

 

Net cash used in financing activities for the nine months ended September 30, 2022 was $17.8 million. The primary driver of cash used in financing activities was $19.6 million in repurchases of common stock under the Share Repurchase Program, partially offset by $1.8 million of proceeds from the exercise of stock options.

 

Indebtedness

 

Credit Facility

 

We 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 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 were permitted to draw upon at our request. Borrowings under the line bore interest at a rate equal to SOFR plus 3.6%. The line carried an unused fee of 0.5% per year. Any proceeds of borrowings under the Amended Loan Agreement were used for general corporate purposes.

 

On a consolidated basis with our subsidiaries, we 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 Loan Agreement. Our line of credit under the Amended Loan Agreement matured on September 7, 2023.

 

Prior to this maturity, we were in compliance with all covenants under the Amended Loan Agreement. We did not at any time 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 September 30, 2023, the commitments related to these operating leases is $17.1 million, of which $6.1 million is due in the next twelve months.

 

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Table of Contents
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.

 

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. 

 

42
Table of Contents
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.

 

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.

 

43
Table of Contents

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 nine months ended 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 in our Annual Report.

 

Interest Rate Risk

 

We had cash and cash equivalents, marketable securities, and short-term deposits of $209.3 million as of 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. 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. 

 

44
Table of Contents

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 nine months ended 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 nine months ended 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.

 

45
Table of Contents

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 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.

 

46
Table of Contents

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 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 (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.

 

47
Table of Contents

Part II

Items 2, 3, 4, and 5

 

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

 

During the quarter ended 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 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 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

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) 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

 

During the quarter ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rulle 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 

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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
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

                     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.

 

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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: November 9, 2023

/s/ Tianyi Jiang
 

Name:

Tianyi Jiang
 

Title:

Chief Executive Officer

(Principal Executive Officer)

 

Date: November 9, 2023

/s/ James Caci
 

Name:

James Caci
 

Title:

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

50

Exhibit 31.1

 

CERTIFICATIONS

 

I, Tianyi Jiang, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of AvePoint, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended, ("Exchange Act") Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

             

Date: November 9, 2023

      

By:

  

/s/ Tianyi Jiang
           

Tianyi Jiang

Chief Executive Officer

(Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, James Caci, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of AvePoint, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended, ("Exchange Act") Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

 Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

             

Date: November 9, 2023

      

By:

  

/s/ James Caci
           

James Caci

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

Exhibit 32.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Tianyi Jiang, Chief Executive Officer of AvePoint, Inc. (the “Company”) hereby certifies that, to the best of his knowledge:

 

1.

 The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

 

2.

 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

             

Date: November 9, 2023

      

By:

  

/s/ Tianyi Jiang
           

Tianyi Jiang
           

Chief Executive Officer
           

(Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), James Caci, Chief Financial Officer of AvePoint, Inc. (the “Company”) hereby certifies that, to the best of his knowledge:

 

1.

 The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

             

Date: November 9, 2023

      

By:

  

/s/ James Caci
           

James Caci
           

Chief Financial Officer
           

(Principal Financial and Accounting Officer)

 

 

 
v3.23.3
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2023
Nov. 09, 2023
Document Information [Line Items]    
Entity Central Index Key 0001777921  
Entity Registrant Name AvePoint, Inc.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2023  
Document Transition Report false  
Entity File Number 001-39048  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 83-4461709  
Entity Address, Address Line One 525 Washington Blvd, Suite 1400  
Entity Address, City or Town Jersey City  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07310  
City Area Code 201  
Local Phone Number 793-1111  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   183,661,782
Warrant [Member]    
Document Information [Line Items]    
Title of 12(b) Security Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share  
Trading Symbol AVPTW  
Security Exchange Name NASDAQ  
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Trading Symbol AVPT  
Security Exchange Name NASDAQ  
v3.23.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Assets    
Cash and cash equivalents $ 205,786 $ 227,188
Short-term investments 3,478 2,620
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 8,276 10,013
Total current assets 286,869 306,295
Property and equipment, net 4,983 5,537
Goodwill 18,595 18,904
Intangible assets, net 10,427 11,079
Operating lease right-of-use assets 14,547 15,855
Deferred contract costs 50,232 48,553
Other assets 12,558 9,310
Total assets 398,211 415,533
Liabilities, mezzanine equity, and stockholders’ equity    
Accounts payable 1,855 1,519
Accrued expenses and other liabilities 44,538 47,784
Current portion of deferred revenue 102,433 93,405
Total current liabilities 148,826 142,708
Long-term operating lease liabilities 9,982 11,348
Long-term portion of deferred revenue 6,296 8,085
Earn-out shares liabilities 13,822 6,631
Other non-current liabilities 5,183 3,607
Total liabilities 184,109 172,379
Commitments and contingencies (Note 10)
Mezzanine equity    
Redeemable noncontrolling interest 13,991 14,007
Total mezzanine equity 13,991 14,007
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 659,892 665,715
Treasury stock 0 (21,666)
Accumulated other comprehensive income 2,307 2,006
Accumulated deficit (462,106) (416,927)
Total stockholders’ equity 200,111 229,147
Total liabilities, mezzanine equity, and stockholders’ equity $ 398,211 $ 415,533
v3.23.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Accounts receivable, allowance $ 1,176 $ 725
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, shares issued (in shares) 183,996,000 185,278,000
Common stock, shares outstanding (in shares) 183,996,000 185,278,000
v3.23.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue:        
Revenue $ 72,760 $ 62,739 $ 197,201 $ 168,731
Cost of revenue:        
Cost of revenue 20,156 17,098 57,842 47,486
Gross profit 52,604 45,641 139,359 121,245
Operating expenses:        
Sales and marketing 28,436 27,425 82,978 82,002
General and administrative 15,838 16,429 45,679 48,411
Research and development 8,643 9,214 26,931 23,850
Total operating expenses 52,917 53,068 155,588 154,263
Loss from operations (313) (7,427) (16,229) (33,018)
(Loss) gain on earn-out and warrant liabilities (2,785) 913 (6,921) 6,848
Interest income, net 232 16 843 50
Other income (expense), net 1,477 48 4,502 (822)
Loss before income taxes (1,389) (6,450) (17,805) (26,942)
Income tax expense 2,841 336 8,132 99
Net loss (4,230) (6,786) (25,937) (27,041)
Net loss (income) attributable to and accretion of redeemable noncontrolling interest 18 (626) (57) (1,870)
Net loss attributable to AvePoint, Inc. (4,212) (7,412) (25,994) (28,911)
Net loss available to common shareholders $ (4,212) $ (7,412) $ (25,994) $ (28,911)
Basic and diluted loss per share (in dollars per share) $ (0.02) $ (0.04) $ (0.14) $ (0.16)
Basic and diluted shares used in computing loss per share (in shares) 181,769 180,732 182,630 179,563
SaaS [Member        
Revenue:        
Revenue $ 41,910 $ 29,959 $ 115,701 $ 84,131
Cost of revenue:        
Cost of revenue 9,561 7,164 26,586 18,934
Termed License and Support [Member]        
Revenue:        
Revenue 16,293 18,288 40,474 42,501
Cost of revenue:        
Cost of revenue 484 524 1,441 1,600
Service [Member]        
Revenue:        
Revenue 11,194 10,458 31,007 29,231
Cost of revenue:        
Cost of revenue 9,922 9,218 29,231 26,204
Maintenance [Member]        
Revenue:        
Revenue 3,363 4,034 10,019 12,868
Cost of revenue:        
Cost of revenue $ 189 $ 192 $ 584 $ 748
v3.23.3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net loss $ (4,230) $ (6,786) $ (25,937) $ (27,041)
Other comprehensive income (loss) net of taxes        
Unrealized loss on available-for-sale 0 (190) 0 0
Foreign currency translation adjustments 56 1,412 228 (281)
Total other comprehensive income (loss) 56 1,222 228 (281)
Total comprehensive loss (4,174) (5,564) (25,709) (27,322)
Comprehensive loss (income) attributable to redeemable noncontrolling interests 18 (511) 16 (1,680)
Total comprehensive loss attributable to AvePoint, Inc $ (4,156) $ (6,075) $ (25,693) $ (29,002)
v3.23.3
Condensed Consolidated Statements of Mezzanine Equity and Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Noncontrolling Interest [Member]
Temporary Equity, Including Portion Attributable to Noncontrolling Interests [Member]
Common Stock Outstanding [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Treasury Stock, Common [Member]
Balance, temporary equity, including noncontrolling interest at Dec. 31, 2021   $ 5,210 $ 5,210            
Balance (in shares) at Dec. 31, 2021       181,821,767 [1]         143,564
Balance at Dec. 31, 2021 $ 250,355       $ 18 [1] $ 625,056 $ (375,297) $ 2,317 $ (1,739)
Proceeds from exercise of options (in shares)       1,216,079 [1]         0
Proceeds from exercise of options 1,817       0 [1] 1,817 0 0 $ 0
Common stock issued upon vesting of restricted stock units (in shares)       1,469,945 [1]         0
Common stock issued upon vesting of restricted stock units 0       0 [1] 0 0 0 $ 0
Stock-based compensation expense 28,279       0 [1] 28,279 0 0 0
Reclassification of earn-out RSUs to earn-out shares (700)       0 [1] (700) 0 0 0
Net loss (27,041)       0 [1] 0 (27,041) 0 0
Net loss attributable to and accretion of redeemable noncontrolling interest   1,870 1,870            
Net loss (income) attributable to and accretion of redeemable noncontrolling interest (1,870)       0 [1] 0 (1,870) 0 0
Total other comprehensive income   (190) (190)            
Total other comprehensive income (91)     $ 0 0 0 0 (91) $ 0
Common stock issued upon acquisition (in shares)       324,845         0
Common stock issued upon acquisition 1,517       0 1,517 0 0 $ 0
Common stock issued for canceled officer awards (in shares)       3,592,504         0
Common stock issued for canceled officer awards 0       1 (1) 0 0 $ 0
Repurchase of common stock (in shares) [1]       (3,970,037)          
Repurchase of common stock (19,554)       0 [1] 0 0 0 $ (19,554)
Repurchase of common stock (in shares)                 3,970,037
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2022   12,684 12,684            
Balance (in shares) at Sep. 30, 2022       184,455,103 [1]         4,113,601
Balance at Sep. 30, 2022 232,712       19 [1] 655,968 (404,208) 2,226 $ (21,293)
Repurchase and retirement of common stock (in shares) [1]       (3,970,037)          
Issuance of redeemable noncontrolling interest in MaivenPoint Pte. Ltd. (1) [1] 0 5,794 5,794 $ 0 0 0 0 0 $ 0
Balance, temporary equity, including noncontrolling interest at Jun. 30, 2022   12,173 12,173            
Balance (in shares) at Jun. 30, 2022       181,330,816 [1]         2,045,226
Balance at Jun. 30, 2022 237,251       18 [1] 644,931 (396,796) 889 $ (11,791)
Proceeds from exercise of options (in shares)       59,800 [1]         0
Proceeds from exercise of options 98       0 [1] 98 0 0 $ 0
Common stock issued upon vesting of restricted stock units (in shares)       1,215,513 [1]         0
Common stock issued upon vesting of restricted stock units 0       0 [1] 0 0 0 $ 0
Stock-based compensation expense 9,609       0 [1] 9,609 0 0 0
Reclassification of earn-out RSUs to earn-out shares (186)       0 [1] (186) 0 0 0
Net loss (6,786)       0 [1] 0 (6,786) 0 0
Net loss attributable to and accretion of redeemable noncontrolling interest   626 626            
Net loss (income) attributable to and accretion of redeemable noncontrolling interest (626)       0 [1] 0 (626) 0 0
Total other comprehensive income   (115) (115)            
Total other comprehensive income 1,337     $ 0 0 0 0 1,337 $ 0
Common stock issued upon acquisition (in shares)       324,845         0
Common stock issued upon acquisition 1,517       0 1,517 0 0 $ 0
Common stock issued for canceled officer awards (in shares)       3,592,504         0
Common stock issued for canceled officer awards 0       1 (1) 0 0 $ 0
Repurchase of common stock (in shares) [1]       (2,068,375)          
Repurchase of common stock (9,502)       0 [1] 0 0 0 $ (9,502)
Repurchase of common stock (in shares)                 2,068,375
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2022   12,684 12,684            
Balance (in shares) at Sep. 30, 2022       184,455,103 [1]         4,113,601
Balance at Sep. 30, 2022 232,712       19 [1] 655,968 (404,208) 2,226 $ (21,293)
Repurchase and retirement of common stock (in shares) [1]       (2,068,375)          
Balance, temporary equity, including noncontrolling interest at Dec. 31, 2022 14,007 14,007 14,007            
Balance (in shares) at Dec. 31, 2022       185,277,588 [2]         4,189,750
Balance at Dec. 31, 2022 $ 229,147       19 [2] 665,715 (416,927) 2,006 $ (21,666)
Proceeds from exercise of options (in shares) 2,063,783     2,063,783 [2]         0
Proceeds from exercise of options $ 3,865       0 [2] 3,865 0 0 $ 0
Common stock issued upon vesting of restricted stock units (in shares)       2,637,904 [2]         0
Common stock issued upon vesting of restricted stock units 0       0 [2] 0 0 0 $ 0
Stock-based compensation expense 26,975       0 [2] 26,975 0 0 0
Reclassification of earn-out RSUs to earn-out shares (439)       0 [2] (439) 0 0 0
Net loss (25,937)       0 [2] 0 (25,937) 0  
Net loss attributable to and accretion of redeemable noncontrolling interest   57 57            
Net loss (income) attributable to and accretion of redeemable noncontrolling interest (57)       0 [2] 0 (57) 0 0
Total other comprehensive income   (73) (73)            
Total other comprehensive income $ 301     $ 0 0 0 0 301 $ 0
Repurchase of common stock (in shares)       (5,983,651)          
Repurchase of common stock (in shares) 5,983,651                
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2023 $ 13,991 13,991 13,991            
Balance (in shares) at Sep. 30, 2023       183,995,624 [1],[2]         0
Balance at Sep. 30, 2023 200,111       18 [1],[2] 659,892 (462,106) 2,307 $ 0
Repurchase and retirement of common stock (in shares)       (5,983,651)          
Repurchase and retirement of common stock (33,744)       (1) (36,224) (19,185) 0 $ 21,666
Repurchase and retirement of common stock (in shares)                 (4,189,750)
Balance, temporary equity, including noncontrolling interest at Jun. 30, 2023   14,009 14,009            
Balance (in shares) at Jun. 30, 2023 [1]       185,723,183          
Balance at Jun. 30, 2023 211,124       19 [1] 659,604 (450,750) 2,251  
Proceeds from exercise of options (in shares) [1]       288,180          
Proceeds from exercise of options 625       0 [1] 625 0 0  
Common stock issued upon vesting of restricted stock units (in shares) [1]       631,866          
Common stock issued upon vesting of restricted stock units 0       0 [1] 0 0 0  
Stock-based compensation expense 9,285       0 [1] 9,285 0 0  
Reclassification of earn-out RSUs to earn-out shares (127)       0 [1] (127) 0 0  
Repurchase and retirement of common stock (in shares)       (2,647,605)          
Repurchase and retirement of common stock (16,640)       (1) (9,495) (7,144) 0  
Net loss (4,230)       0 [1] 0 (4,230)    
Net loss attributable to and accretion of redeemable noncontrolling interest   (18) (18)            
Net loss (income) attributable to and accretion of redeemable noncontrolling interest 18       0 0 18 0  
Total other comprehensive income   0 0            
Total other comprehensive income 56     $ 0 0 0 0 56  
Balance, temporary equity, including noncontrolling interest at Sep. 30, 2023 13,991 $ 13,991 $ 13,991            
Balance (in shares) at Sep. 30, 2023       183,995,624 [1],[2]         0
Balance at Sep. 30, 2023 $ 200,111       $ 18 [1],[2] $ 659,892 $ (462,106) $ 2,307 $ 0
Repurchase and retirement of common stock (in shares) (2,647,605)                
[1] Formerly AvePoint EduTech Pte. Ltd.
[2] As part of the Business Combination (as disclosed in “Note 3 — Business Combination”), all per share information has been retroactively adjusted using an exchange ratio of 8.69144 per share.
v3.23.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Operating activities    
Net loss $ (25,937) $ (27,041)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 3,439 2,255
Operating lease right-of-use assets expense 5,294 4,602
Foreign currency remeasurement loss 763 3,026
Stock-based compensation 26,975 28,287
Deferred income taxes (240) (154)
Other 725 1,040
Change in value of earn-out and warrant liabilities 6,921 (6,754)
Changes in operating assets and liabilities:    
Accounts receivable (4,633) (6,661)
Prepaid expenses and other current assets 1,663 (1,486)
Deferred contract costs and other assets (5,637) (8,436)
Accounts payable, accrued expenses, operating lease liabilities and other liabilities (5,331) (4,227)
Deferred revenue 9,282 8,656
Net cash provided by (used in) operating activities 13,284 (6,893)
Investing activities    
Maturities of investments 1,292 180,837
Purchases of investments (2,050) (180,495)
Cash paid in business combinations and asset acquisitions, net of cash acquired 0 (18,574)
Capitalization of internal-use software (988) (1,165)
Purchase of property and equipment (1,478) (3,420)
Investment in notes (1,000) 0
Net cash used in investing activities (4,224) (22,817)
Financing activities    
Repurchase of common stock (33,644) (19,554)
Proceeds from stock option exercises 3,865 1,817
Repayments of finance leases (30) (23)
Net cash used in financing activities (29,809) (17,760)
Effect of exchange rates on cash (653) (2,966)
Net decrease in cash and cash equivalents (21,402) (50,436)
Cash and cash equivalents at beginning of period 227,188 268,217
Cash and cash equivalents at end of period 205,786 217,781
Supplemental disclosures of cash flow information    
Income taxes paid 5,794 421
Contingent consideration in business combinations $ 0 $ 5,635
v3.23.3
Note 1 - Nature of Business and Organization
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Nature of Operations [Text Block]

1. Nature of Business and Organization

 

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

 

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.
v3.23.3
Note 2 - Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

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 three and nine months ended  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.

 

Recently Adopted Accounting Guidance

 

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 GAAP. 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.

 

Comparative Data

 

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

 

 •The reclassification of perpetual license revenue to be included in maintenance revenue on the condensed consolidated statements of operations for the three and nine months ended 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 nine months ended 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 nine months ended 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 nine months ended September 30, 2022.

 

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2023 or December 31, 2022.

 

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our condensed consolidated balance sheets and the amounts of revenue and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, stock-based compensation, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. 

 

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the Company’s condensed consolidated statements of operations. Transaction losses totaled $0.7 million and $1.3 million for the three and nine months ended September 30, 2023, respectively, and $1.3 million and $2.4 million for the three and nine months ended  September 30, 2022, respectively.

 

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers all investments available with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2023 and December 31, 2022, the Company’s cash balances at these entities were $7.0 million and $10.8 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

 

Short-Term Investments

 

Short-term investments consist mainly of certificates of deposit held by financial institutions which have an initial maturity greater than three months but less than or equal to one year at period end.

 

Prepaid Expenses and Other Current Assets

 

The prepaid expenses balances as of September 30, 2023 and December 31, 2022 were $7.3 million and $7.1 million, respectively.

 

Deferred Contract Costs

 

Amortization of deferred contract costs of $4.6 million and $13.1 million for the three and nine months ended September 30, 2023, respectively, and $3.4 million and $9.6 million for the three and nine months ended  September 30, 2022, respectively, is included as a component of sales and marketing expenses in our condensed consolidated statements of operations. Deferred contract costs recognized as a contract asset on our balance sheet were $50.2 million and $48.6 million at September 30, 2023 and December 31, 2022, respectively.

 

Revenue Recognition

 

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

 

Term license revenue recognized at point in time was $11.1 million and $24.9 million for the three and nine months ended September 30, 2023, respectively, and $13.7 million and $29.4 million for the three and nine months ended  September 30, 2022, respectively.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for doubtful accounts. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for doubtful accounts as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2023 and December 31, 2022 was $108.7 million and $101.5 million, respectively. Revenue recognized that was included at the beginning of the period deferred revenue balance was $78.3 million for the nine months ended September 30, 2023.

 

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

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2022

 $73,348  $101,490  $48,553 

Balance, September 30, 2023

  78,264   108,729   50,232 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2023 and the year ended December 31, 2022 outside of its sales activities.

 

As of September 30, 2023, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $275.8 million, of which $218.6 million is related to SaaS and term license and support revenue. We expect to recognize approximately 63% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 

Treasury Stock Retirement

 

We account for treasury stock transactions under the cost method. For each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value, respectively. We periodically retire treasury shares that we acquire through share repurchases and return those shares to the status of authorized but unissued. When treasury shares are retired, we allocate the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and accumulated deficit. The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares. Any further excess of the repurchase price is allocated to accumulated deficit. 

 

Emerging Growth Company

 

The Company is considered an emerging growth company. 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 that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under Section 21E of the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can 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 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.

 

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.

 

Recent Accounting Pronouncements

 

Recently issued accounting pronouncements are not expected to have a material impact on our financial position, results of operations or cash flows upon adoption.

 
v3.23.3
Note 3 - Goodwill
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Goodwill Disclosure [Text Block]

3. Goodwill

 

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

 

  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2022

 $18,904 

Acquisitions

  — 

Effect of foreign currency translation

  (309)

Balance as of September 30, 2023

 $18,595 

 
v3.23.3
Note 4 - Intangible Assets, Net
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

4. Intangible assets, net

 

Intangible assets consist of acquired intangible assets and self-developed software. Amortization expense for intangible assets was $0.6 million and $1.6 million for the three and nine months ended September 30, 2023, respectively, and $0.2 million and $0.4 million for the three and nine months ended  September 30, 2022, respectively. 

 

A summary of the balances of the Company's intangible assets as of  September 30, 2023 and  December 31, 2022 is presented below:

 

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
          

September 30,

          

December 31,

 
          

2023

          

2022

 
  

(in thousands)

 

Technology and software, net

 $7,774  $(1,741) $6,033  $6,842  $(777) $6,065 

Customer related assets, net

  4,432   (513)  3,919   4,799   (477)  4,322 

Content, net

  815   (340)  475   830   (138)  692 

Total

 $13,021  $(2,594) $10,427  $12,471  $(1,392) $11,079 

 

As of September 30, 2023, estimated future amortization expense for intangible assets, net is as follows:

 

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 
v3.23.3
Note 5 - Concentration of Credit Risk
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Concentration Risk Disclosure [Text Block]

 

5. Concentration of Credit Risk

 

The Company deposits its cash with financial institutions and, at times, such balances may exceed federally insured limits. Additionally, no customer accounted for more than 10% of revenue for the three and nine months ended September 30, 2023 and 2022. 

 
v3.23.3
Note 6 - Accounts Receivable, Net
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

6. Accounts Receivable, Net

 

Accounts receivable, net, consists of the following components:

 

  

September 30,

  

December 31,

 
  

2023

  

2022

 
  

(in thousands)

 

Trade receivables

 $50,729  $47,046 

Current unbilled receivables

  19,776   20,153 

Allowance for doubtful accounts

  (1,176)  (725)
  $69,329  $66,474 

 
v3.23.3
Note 7 - Line of Credit
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. Line of Credit

 

The Company maintained a loan and security agreement with HSBC Ventures Bank USA, Inc., (“HSBC Venture”) as lender, for a revolving line of credit of up to $30.0 million, with an accordion feature that provides up to $20.0 million of additional borrowing capacity the Company was permitted to draw upon at its request. The line bore interest at a rate equal to SOFR plus 3.6%. The line carried an unused fee of 0.5% per year. The line matured on September 7, 2023. As of September 30, 2023, the Company had no borrowings outstanding under the line of credit. We were required to maintain a specified adjusted quick ratio and a minimum annual recurring revenue tested by HSBC Venture each quarter. The Company pledged, assigned and granted HSBC Venture a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the loan and security agreement obligations.

 

Effective November 3, 2023, the Company entered into a loan and security agreement with HSBC Bank USA, National Association. See the section titled “Notes to Consolidated Financial Statements” (Part I, Item 1 of this Quarterly Report) under the sub-heading “Note 18 – Subsequent Events” for more information.
v3.23.3
Note 8 - Income Taxes
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

8. Income Taxes

 

The Company had an effective tax rate of (204.5)% and (45.7)% for the three and nine months ended September 30, 2023, respectively, and (5.2)% and (0.4)% for the three and nine months ended  September 30, 2022, respectively.

 

The change in effective tax rates for the three-month period ended September 30, 2023 as compared to the three-month period ended  September 30, 2022 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, and tax losses for which no benefit can be taken.

 

The change in effective tax rates for the nine-month period ended September 30, 2023 as compared to the nine-month period ended  September 30, 2022 was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, impact of foreign inclusions, stock-based compensation and tax losses for which no benefits can be taken.

 

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

 
v3.23.3
Note 9 - Leases
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

9. Leases

 

The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through 2030. We determine if an arrangement is a lease at inception.

 

The components of the Company's operating lease expenses are reflected in the condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Lease liability cost

 $1,798  $1,953  $5,294  $4,602 

Short-term lease expenses (1)

  138   173   592   1,522 

Variable lease cost not included in the lease liability (2)

  119   97   365   166 

Total lease cost

 $2,055  $2,223  $6,251  $6,290 

 

(1) Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.

 

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

 

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

 

During the nine months ended September 30, 2023 and 2022, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $3.7 million and $6.8 million, respectively.

 

Other information related to operating leases for the three and nine months ended September 30, 2023 and 2022, is as follows:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,659  $1,594  $5,324  $4,100 

 

 

As of September 30, 2023, our operating leases had a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 5.4%.


As of December 31, 2022, our operating leases had a weighted average remaining lease term of 4.4 years and a weighted average discount rate of 5.1%.
 
The maturity schedule of the operating lease liabilities as of September 30, 2023 is as follows:

 

Year Ending December 31:

    
  

(in thousands)

 

2023 (three months)

 $1,599 

2024

  5,583 

2025

  3,762 

2026

  2,489 

2027

  1,711 

Thereafter

  2,001 

Total future lease payments

 $17,145 

Less: Present value adjustment

  (1,818)

Present value of future lease payments (1)

 $15,327 

 

(1) Includes the current portion of operating lease liabilities of $5.3 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.

 
v3.23.3
Note 10 - Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Commitments Contingencies and Guarantees [Text Block]

10. Commitments and Contingencies

 

Legal Proceedings

 

In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of September 30, 2023, the Company was not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

 

Guarantees

 

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements, which are secured by certificates of deposit. As of September 30, 2023, letters of credit have been issued in the amount of $3.1 million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.

 

Notes Receivable

 

Other assets include yielding loan notes to a third party with a total commitment of up to $5.0 million and maturities of greater than twelve months. The notes bear interest at an annual rate equal to 8%. 

 

As of September 30, 2023 and December 31, 2022, $1.5 million and $0.5 million, respectively, were outstanding, and these amounts are included in other assets in the condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022, the difference between the carrying amount and estimated fair value for the notes receivables was immaterial. Fair values are based on discounted future cash flows using current interest rates offered for similar notes to third parties with similar credit ratings for the same remaining maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy. 
v3.23.3
Note 11 - Earn-Out and Warrant Liabilities
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Earn-Out and Warrant Liabilities [Text Block]

11. Earn-Out and Warrant Liabilities

 

Company Earn-Out Agreement

 

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

 

 •

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.

 

The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of restricted stock units of the Company for a number of shares of AvePoint's common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “Company Earn-Out RSUs”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718, Compensation-Stock Compensation (“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’ (as defined below) contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on July 1, 2021 was determined to be $29.6 million. The fair value was remeasured as of September 30, 2023 and December 31, 2022, and was determined to be $13.8 million and $6.6 million, respectively, and included in the earn-out shares liabilities in the condensed consolidated balance sheets. As a result, $2.8 million and $6.8 million losses were recognized during the three and nine months ended September 30, 2023, respectively, and $0.8 million and $6.6 million gains were recognized during the three and nine months ended  September 30, 2022, respectively, and included as (loss) gain on earn-out and warrant liabilities in the condensed consolidated statements of operations. We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:

 

  

September 30,

 
  2023 

Term (in years)

  4.76 

Volatility

  55.00

%

 

Private Warrants to Acquire Common Stock

 

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

 

The private placement warrants are held by only two parties and any transfer of the warrants to a party other than a current holder of the warrants would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $1.4 million. The fair value was remeasured as of September 30, 2023 and December 31, 2022, and was determined to be $0.4 million and $0.2 million, respectively, and included in the other non-current liabilities in the condensed consolidated balance sheets. As a result, $0.1 million and $0.2 million losses were recognized during the three and nine months ended September 30, 2023, respectively, and $0.1 million and $0.2 million gains were recognized during the three and nine months ended  September 30, 2022, respectively, and included as (loss) gain on earn-out and warrant liabilities in the condensed consolidated statements of operations. 
v3.23.3
Note 12 - Mezzanine Equity and Stockholders' Equity
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Equity [Text Block]

12. Mezzanine Equity and Stockholders’ Equity

 

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

 

Common Stock

 

Pursuant to the Company’s restated Articles of Incorporation, the Company was authorized to issue up to 1,000,000,000 shares of common stock at $0.0001 par value. There were 183,995,624 and 189,467,338 shares issued and outstanding, including treasury shares, if any, at September 30, 2023 and December 31, 2022, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company's Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception. On June 30, 2023, the Company retired 7,525,796 shares of its common stock held in treasury. For the three months ended September 30, 2023, the Company repurchased and retired 2,647,605 shares. The shares were returned to the status of authorized but unissued shares. As a result, common stock amount, additional paid-in capital, and accumulated deficit in the condensed consolidated balance sheet were reduced by $0 million, $36.2 million, and $19.2 million, respectively.

 

Share Repurchase Program

 

On March 17, 2022, the Company announced that its Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to a maximum of $150 million of 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 and may be suspended or discontinued at any time. The Company is not obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During the nine months ended September 30, 2023, the Company repurchased 5,983,651 shares at an average price of $5.62 per share.

 

Sponsor Earn-Out Shares

 

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

 

 •

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.

 

The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of  September 30, 2023.

 

Public Warrants to Acquire Common Stock

 

On July 1, 2021, the Company issued 17,500,000 public warrants with an exercise price of $11.50. Each warrant entitles the registered holder to purchase one share of AvePoint's common stock and the warrants are exercisable from the date of issuance through July 1, 2026. At  September 30, 2023, all 17,500,000 warrants remained outstanding. 

 
v3.23.3
Note 13 - Stock-based Compensation
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

13. Stock-Based Compensation

 

The Company maintains the 2021 Equity Incentive Plan (the “2021 Plan”). As of September 30, 2023, 22,975,201 shares remained for future issuance under the 2021 Plan. To date, the Company has issued only stock options and restricted stock units to employees, directors and consultants. 

 

The Company records stock-based compensation in cost of revenue, sales and marketing, general and administrative and research and development. Stock-based compensation was included in the following line items:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cost of revenue

 $806  $667  $2,292  $1,948 

Sales and marketing

  2,358   2,847   7,267   8,705 

General and administrative

  5,264   5,060   14,551   14,825 

Research and development

  857   1,035   2,865   2,809 

Total stock-based compensation

 $9,285  $9,609  $26,975  $28,287 

 

Stock Options

 

The compensation costs for stock option awards are accounted for in accordance with ASC 718. Stock options vest over a four-year service period and expire on the tenth anniversary of the date of award. 

 

On  March 13, 2023, the Company granted 1,125,374 options under the 2021 Plan. The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

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

 

To estimate the expected life of stock options, the Company considered the vesting term, contractual expiration period, and market conditions. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected life. Based on these inputs, the grant-date fair value was determined to be $2.8 million.

 

As of September 30, 2023, there was $18.6 million in unrecognized compensation costs related to all unvested options.

 

As of  September 30, 2023, the Company had 27,981,601 options outstanding and 20,951,139 options exercisable with intrinsic values of $86.7 million and $75.7 million, respectively. During the nine months ended September 30, 2023, 2,063,783 options were exercised, with a total intrinsic value of $7.3 million.

 

Restricted Stock Units

 

6,606,932 restricted stock units (“RSUs”) were granted under the 2021 Plan during the nine months ended September 30, 2023, with a weighted-average grant date fair-value of $4.30 per RSU. The compensation costs for RSUs are accounted for in accordance with ASC 718. RSUs vest over a four-year service period from the grant date. The RSUs are measured at the fair market value of the underlying stock at the grant date. As of September 30, 2023, there was $59.2 million in unrecognized compensation costs specific to the unvested RSUs under the 2021 Plan.

 

Company Earn-Out RSUs

 

The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC 718. In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on July 1, 2021, was determined to be $2.5 million. The stock options underlying the Earn-Out RSUs vest over a four-year period and expire on the tenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs are not met by July 1, 2028, the holders of the underlying stock options will not receive the Earn-Out RSUs. 

 

 
v3.23.3
Note 14 - Financial Instruments
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Financial Instruments Disclosure [Text Block]

14. Financial Instruments

 

Fair value is defined by ASC 820, Fair Value Measurement (“ASC 820”) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

 

 

•

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

 

 

•

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

 

•

Level 3 — Unobservable inputs for the asset or liability.

   

  

September 30, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (1)

 $—  $1,483  $—  $1,483 

Money market funds (2)

  —   4,108   —   4,108 

U.S. treasury bills

  —   169,793   —   169,793 

Short term investments:

                

Certificates of deposit (1)

  —   3,478   —   3,478 

Total

 $—  $178,862  $—  $178,862 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (3)

 $—  $—  $13,822  $13,822 

Other non-current liabilities:

                

Warrant liabilities (3)

  —   397   —   397 

Total

 $—  $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 

 

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

(2) Profits on securities for the three and nine months ended September 30, 2023 were $2.2 million and $5.8 million, respectively, and for the three and nine months ended September 30, 2022 were $1.2 million and $1.2 million, respectively.

(3) Refer to “Note 11 — Earn-Out and Warrant Liabilities” for further details.

  

The following table presents the reconciliation in Level 3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis for the nine months ended September 30, 2023.

 

  Nine Months Ended September 30, 
  

2023

 
  

(in thousands)

 

Opening balance

 $6,631 

Total gains or losses from the period

    

Included in (loss) gain on earn-out and warrant liabilities

  6,752 

Reclass from Earnout-RSU

  439 

Closing balance

 $13,822 

 
v3.23.3
Note 15 - Segment Information
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

15. Segment Information

 

The Company operates in one segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation, expense allocation or profitability by product or geography.

 

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

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

North America

 $31,751  $29,416  $84,484  $75,648 

EMEA

  21,739   19,026   60,800   51,938 

APAC

  19,270   14,297   51,917   41,145 

Total revenue

 $72,760  $62,739  $197,201  $168,731 

 

The following table sets forth revenue generated by countries which represent more than 10% of total consolidated revenue:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

United States

 $31,115  $29,229  $82,151  $75,461 

Germany

  9,212   8,576   25,993   22,494 

Singapore

  8,639   5,697   22,256   14,893 

 
v3.23.3
Note 16 - Loss Per Share
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Earnings Per Share [Text Block]

16. Loss Per Share

 

Basic loss per share available to AvePoint common shareholders (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding for the period. In computing diluted EPS, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share based payment awards, warrants, earn-outs and the conversion of convertible preferred shares. AvePoint applies the two-class method in calculating loss per share. AvePoint’s Sponsor Earn-Out Shares described in “Note 12 — Mezzanine Equity and Stockholders’ Equity” are considered participating securities and have no contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below. As losses were incurred during all periods presented, no earnings per share exists for the Sponsor Earn-Out Shares.

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands, except per share amounts)

 

Loss per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net loss

 $(4,230) $(6,786) $(25,937) $(27,041)

Net loss (income) attributable to and accretion of redeemable noncontrolling interest

  18   (626)  (57)  (1,870)

Net loss attributable to AvePoint, Inc.

 $(4,212) $(7,412) $(25,994) $(28,911)

Total net loss available to common shareholders

 $(4,212) $(7,412) $(25,994) $(28,911)

Denominator:

                

Weighted average common shares outstanding

  181,769   180,732   182,630   179,563 

Effect of dilutive securities

  —   —   —   — 

Weighted average diluted shares

  181,769   180,732   182,630   179,563 
                 

Basic and diluted loss per share available to common shareholders, excluding sponsor earn-out shareholders

 $(0.02) $(0.04) $(0.14) $(0.16)

 

To arrive at net loss available to common shareholders, the Company deducted net income attributable to the redeemable noncontrolling interest.

 

For the three and nine months ended September 30, 2023 and 2022, the Company’s potentially dilutive securities were deemed to be anti-dilutive given the Company’s net loss position. As such, basic loss per share is equal to diluted loss per share for the periods presented.

 

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:

 

  

September 30,

 
  

2023

  

2022

 
  

(in thousands)

 

Stock options

  27,982   29,867 

Restricted stock units

  11,533   8,490 

Warrants

  17,905   17,905 

Company Earn-Outs

  3,000   3,000 

Total potentially dilutive securities

  60,420   59,262 
v3.23.3
Note 17 - Related Party Transactions
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

17. Related Party Transactions

 

The Company has entered into indemnification agreements with its executive officers and directors. These agreements, among other things, require AvePoint to indemnify its directors and executive officers to the fullest extent permitted by Delaware law, specifically the Delaware General Corporation Law (as the same exists or may hereafter be amended) for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.
v3.23.3
Note 18 - Subsequent Events
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Subsequent Events [Text Block]

18. Subsequent Events

 

On November 3, 2023 we entered into a loan and security agreement (the “Loan Agreement”) with HSBC Bank USA, National Association, as lender, for a revolving line of credit of up to $30.0 million with an accordion feature that provides up to $20.0 million of additional borrowing capacity we may draw at our request. The currently bears interest at a rate of 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. We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. The line will mature on November 3, 2026.

 

 
v3.23.3
Insider Trading Arrangements
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

ITEM 5. OTHER INFORMATION

 

During the quarter ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rulle 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 
Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
v3.23.3
Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

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 three and nine months ended  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.

 
Recently Adopted Accounting Guidance [Policy Text Block]

Recently Adopted Accounting Guidance

 

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 GAAP. 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.

 
Reclassification, Comparability Adjustment [Policy Text Block]

Comparative Data

 

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

 

 •The reclassification of perpetual license revenue to be included in maintenance revenue on the condensed consolidated statements of operations for the three and nine months ended 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 nine months ended 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 nine months ended 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 nine months ended September 30, 2022.

 
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

 

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of September 30, 2023 or December 31, 2022.

 
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our condensed consolidated balance sheets and the amounts of revenue and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, stock-based compensation, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. 

 
Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency

 

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the Company’s condensed consolidated statements of operations. Transaction losses totaled $0.7 million and $1.3 million for the three and nine months ended September 30, 2023, respectively, and $1.3 million and $2.4 million for the three and nine months ended  September 30, 2022, respectively.

 
Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

 

The Company maintains cash with several high credit-quality financial institutions. The Company considers all investments available with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of September 30, 2023 and December 31, 2022, the Company’s cash balances at these entities were $7.0 million and $10.8 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.
Investment, Policy [Policy Text Block]

Short-Term Investments

 

Short-term investments consist mainly of certificates of deposit held by financial institutions which have an initial maturity greater than three months but less than or equal to one year at period end.

 
Prepaid Expenses and Other Assets [Policy Text Block]

Prepaid Expenses and Other Current Assets

 

The prepaid expenses balances as of September 30, 2023 and December 31, 2022 were $7.3 million and $7.1 million, respectively.

 
Deferred Charges, Policy [Policy Text Block]

Deferred Contract Costs

 

Amortization of deferred contract costs of $4.6 million and $13.1 million for the three and nine months ended September 30, 2023, respectively, and $3.4 million and $9.6 million for the three and nine months ended  September 30, 2022, respectively, is included as a component of sales and marketing expenses in our condensed consolidated statements of operations. Deferred contract costs recognized as a contract asset on our balance sheet were $50.2 million and $48.6 million at September 30, 2023 and December 31, 2022, respectively.

 
Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

 

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

 

Term license revenue recognized at point in time was $11.1 million and $24.9 million for the three and nine months ended September 30, 2023, respectively, and $13.7 million and $29.4 million for the three and nine months ended  September 30, 2022, respectively.

 

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for doubtful accounts. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for doubtful accounts as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of September 30, 2023 and December 31, 2022, the allowance for doubtful accounts was not material.

 

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of September 30, 2023 and December 31, 2022 was $108.7 million and $101.5 million, respectively. Revenue recognized that was included at the beginning of the period deferred revenue balance was $78.3 million for the nine months ended September 30, 2023.

 

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

 

  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2022

 $73,348  $101,490  $48,553 

Balance, September 30, 2023

  78,264   108,729   50,232 

 

(1) Includes long-term unbilled receivables. 

 

There were no significant changes to the Company’s contract assets or liabilities during the nine months ended September 30, 2023 and the year ended December 31, 2022 outside of its sales activities.

 

As of September 30, 2023, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $275.8 million, of which $218.6 million is related to SaaS and term license and support revenue. We expect to recognize approximately 63% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

 
Stockholders' Equity, Policy [Policy Text Block]

Treasury Stock Retirement

 

We account for treasury stock transactions under the cost method. For each reacquisition of common stock, the number of shares and the acquisition price for those shares is added to the existing treasury stock count and total value, respectively. We periodically retire treasury shares that we acquire through share repurchases and return those shares to the status of authorized but unissued. When treasury shares are retired, we allocate the excess of the repurchase price over the par value of shares acquired between additional paid-in capital and accumulated deficit. The portion allocated to additional paid-in capital is limited to the pro rata portion of additional paid-in capital for the retired treasury shares. Any further excess of the repurchase price is allocated to accumulated deficit. 

 
Emerging Growth Company [Policy Text Block]

Emerging Growth Company

 

The Company is considered an emerging growth company. 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 that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under Section 21E of the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can 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 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.

 

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.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

 

Recently issued accounting pronouncements are not expected to have a material impact on our financial position, results of operations or cash flows upon adoption.

 
v3.23.3
Note 2 - Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Accounts Receivable, Net, Deferred Revenue and Deferred Sales Commissions [Table Text Block]
  

Accounts

      

Deferred

 
  

receivable,

  

Deferred

  

contract

 
  

net (1)

  

revenue

  

costs

 
  

(in thousands)

 

Balance, December 31, 2022

 $73,348  $101,490  $48,553 

Balance, September 30, 2023

  78,264   108,729   50,232 
v3.23.3
Note 3 - Goodwill (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Goodwill [Table Text Block]
  

Goodwill

 
  

(in thousands)

 

Balance as of December 31, 2022

 $18,904 

Acquisitions

  — 

Effect of foreign currency translation

  (309)

Balance as of September 30, 2023

 $18,595 
v3.23.3
Note 4 - Intangible Assets, Net (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 
          

September 30,

          

December 31,

 
          

2023

          

2022

 
  

(in thousands)

 

Technology and software, net

 $7,774  $(1,741) $6,033  $6,842  $(777) $6,065 

Customer related assets, net

  4,432   (513)  3,919   4,799   (477)  4,322 

Content, net

  815   (340)  475   830   (138)  692 

Total

 $13,021  $(2,594) $10,427  $12,471  $(1,392) $11,079 
Finite-Lived Intangible Assets Amortization Expense [Table Text Block]

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 
v3.23.3
Note 6 - Accounts Receivable, Net (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]
  

September 30,

  

December 31,

 
  

2023

  

2022

 
  

(in thousands)

 

Trade receivables

 $50,729  $47,046 

Current unbilled receivables

  19,776   20,153 

Allowance for doubtful accounts

  (1,176)  (725)
  $69,329  $66,474 
v3.23.3
Note 9 - Leases (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Lease liability cost

 $1,798  $1,953  $5,294  $4,602 

Short-term lease expenses (1)

  138   173   592   1,522 

Variable lease cost not included in the lease liability (2)

  119   97   365   166 

Total lease cost

 $2,055  $2,223  $6,251  $6,290 
Other Information Related to Operating Leases [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cash paid for amounts included in the measurement of the lease liability:

                

Operating cash flows from operating leases

 $1,659  $1,594  $5,324  $4,100 
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year Ending December 31:

    
  

(in thousands)

 

2023 (three months)

 $1,599 

2024

  5,583 

2025

  3,762 

2026

  2,489 

2027

  1,711 

Thereafter

  2,001 

Total future lease payments

 $17,145 

Less: Present value adjustment

  (1,818)

Present value of future lease payments (1)

 $15,327 
v3.23.3
Note 11 - Earn-Out and Warrant Liabilities (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
  

September 30,

 
  2023 

Term (in years)

  4.76 

Volatility

  55.00

%
v3.23.3
Note 13 - Stock-based Compensation (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Cost of revenue

 $806  $667  $2,292  $1,948 

Sales and marketing

  2,358   2,847   7,267   8,705 

General and administrative

  5,264   5,060   14,551   14,825 

Research and development

  857   1,035   2,865   2,809 

Total stock-based compensation

 $9,285  $9,609  $26,975  $28,287 
Schedule of Share-Based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]
  March 13, 
  2023 
Expected life (in years)  6.11 
Expected volatility  59.19%
Risk-free rate  3.63%
Dividend yield  — 
v3.23.3
Note 14 - Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Fair Value, by Balance Sheet Grouping [Table Text Block]
  

September 30, 2023

 
  

(in thousands)

 
  

Level 1

  

Level 2

  

Level 3

  

Total

 

Assets

                

Cash Equivalents:

                

Certificates of deposit (1)

 $—  $1,483  $—  $1,483 

Money market funds (2)

  —   4,108   —   4,108 

U.S. treasury bills

  —   169,793   —   169,793 

Short term investments:

                

Certificates of deposit (1)

  —   3,478   —   3,478 

Total

 $—  $178,862  $—  $178,862 

Liabilities:

                

Earn-out shares liabilities:

                

Earn-out shares (3)

 $—  $—  $13,822  $13,822 

Other non-current liabilities:

                

Warrant liabilities (3)

  —   397   —   397 

Total

 $—  $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 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
  Nine Months Ended September 30, 
  

2023

 
  

(in thousands)

 

Opening balance

 $6,631 

Total gains or losses from the period

    

Included in (loss) gain on earn-out and warrant liabilities

  6,752 

Reclass from Earnout-RSU

  439 

Closing balance

 $13,822 
v3.23.3
Note 15 - Segment Information (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

North America

 $31,751  $29,416  $84,484  $75,648 

EMEA

  21,739   19,026   60,800   51,938 

APAC

  19,270   14,297   51,917   41,145 

Total revenue

 $72,760  $62,739  $197,201  $168,731 
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands)

 

Revenue:

                

United States

 $31,115  $29,229  $82,151  $75,461 

Germany

  9,212   8,576   25,993   22,494 

Singapore

  8,639   5,697   22,256   14,893 
v3.23.3
Note 16 - Loss Per Share (Tables)
 9 Months Ended
Sep. 30, 2023
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 
  

(in thousands, except per share amounts)

 

Loss per share available to common shareholders, excluding sponsor earn-out shareholders

                

Numerator:

                

Net loss

 $(4,230) $(6,786) $(25,937) $(27,041)

Net loss (income) attributable to and accretion of redeemable noncontrolling interest

  18   (626)  (57)  (1,870)

Net loss attributable to AvePoint, Inc.

 $(4,212) $(7,412) $(25,994) $(28,911)

Total net loss available to common shareholders

 $(4,212) $(7,412) $(25,994) $(28,911)

Denominator:

                

Weighted average common shares outstanding

  181,769   180,732   182,630   179,563 

Effect of dilutive securities

  —   —   —   — 

Weighted average diluted shares

  181,769   180,732   182,630   179,563 
                 

Basic and diluted loss per share available to common shareholders, excluding sponsor earn-out shareholders

 $(0.02) $(0.04) $(0.14) $(0.16)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
  

September 30,

 
  

2023

  

2022

 
  

(in thousands)

 

Stock options

  27,982   29,867 

Restricted stock units

  11,533   8,490 

Warrants

  17,905   17,905 

Company Earn-Outs

  3,000   3,000 

Total potentially dilutive securities

  60,420   59,262 
v3.23.3
Note 2 - Summary of Significant Accounting Policies 1 (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Jun. 30, 2023
Dec. 31, 2022
Goodwill, Impaired, Accumulated Impairment Loss $ 0   $ 0     $ 0
Gain (Loss), Foreign Currency Transaction, before Tax 700 $ 1,300 1,300 $ 2,400    
Cash 7,000   7,000     10,800
Prepaid Expense, Current 7,300   7,300     7,100
Capitalized Contract Cost, Amortization 4,600 3,400 13,100 9,600    
Capitalized Contract Cost, Net 50,232   50,232     48,553
Revenue from Contract with Customer, Excluding Assessed Tax 72,760 62,739 197,201 168,731    
Contract with Customer, Liability 108,729   108,729     $ 101,490
Contract with Customer, Liability, Revenue Recognized     78,300      
Revenue, Remaining Performance Obligation, Amount 275,800   275,800      
Market Value of Common Stock Held by Non-affiliates         $ 700,000  
Termed License and Support [Member]            
Revenue from Contract with Customer, Excluding Assessed Tax 16,293 18,288 40,474 42,501    
Termed License and Support [Member] | SaaS [Member            
Revenue, Remaining Performance Obligation, Amount 218,600   218,600      
Transferred at Point in Time [Member] | Termed License and Support [Member]            
Revenue from Contract with Customer, Excluding Assessed Tax $ 11,100 $ 13,700 $ 24,900 $ 29,400    
v3.23.3
Note 2 - Summary of Significant Accounting Policies 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Sep. 30, 2023
Revenue, Remaining Performance Obligation, Percentage 63.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Month) 12 months
v3.23.3
Note 2 - Summary of Significant Accounting Policies - Accounts Receivable, Net, Deferred Revenue and Deferred Sales Commissions (Details)
$ in Thousands
Sep. 30, 2023
USD ($)
Balance $ 73,348 [1]
Balance 101,490
Balance 48,553
Balance 78,264 [1]
Balance 108,729
Balance $ 50,232
[1] Include long-term unbilled receivables.
v3.23.3
Note 3 - Goodwill - Changes in Carrying Amount of Goodwill (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
Balance $ 18,904
Acquisitions 0
Effect of foreign currency translation (309)
Balance $ 18,595
v3.23.3
Note 4 - Intangible Assets, Net (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Amortization of Intangible Assets $ 0.6 $ 0.2 $ 1.6 $ 0.4
v3.23.3
Note 4 - Intangible Assets, Net - Summary of Balances of Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Gross carrying amount $ 13,021 $ 12,471
Accumulated amortization (2,594) (1,392)
Net carrying amount 10,427 11,079
Technology-Based Intangible Assets [Member]    
Gross carrying amount 7,774 6,842
Accumulated amortization (1,741) (777)
Net carrying amount 6,033 6,065
Customer Relationships [Member]    
Gross carrying amount 4,432 4,799
Accumulated amortization (513) (477)
Net carrying amount 3,919 4,322
Media Content [Member]    
Gross carrying amount 815 830
Accumulated amortization (340) (138)
Net carrying amount $ 475 $ 692
v3.23.3
Note 4 - Intangible Assets, Net - Estimated Future Amortization Expense for Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
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 $ 11,079
v3.23.3
Note 5 - Concentration of Credit Risk (Details Textual)
Pure in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]        
Number of Major Customers 0 0 0 0
v3.23.3
Note 6 - Accounts Receivable, Net - Accounts Receivable, Net (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Allowance for doubtful accounts $ (1,176) $ (725)
Accounts Receivable, after Allowance for Credit Loss, Current 69,329 66,474
Trade Accounts Receivable [Member]    
Accounts receivable, gross 50,729 47,046
Unbilled Receivable [Member]    
Accounts receivable, gross $ 19,776 $ 20,153
v3.23.3
Note 7 - Line of Credit (Details Textual) - HSBC Venture Bank USA Inc. [Member] - USD ($)
$ in Thousands
 42 Months Ended
Apr. 07, 2020
Sep. 30, 2023
Revolving Credit Facility [Member]    
Line of Credit Facility, Maximum Borrowing Capacity $ 30,000  
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage 0.50%  
Proceeds from Lines of Credit, Total   $ 0
Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) [Member]    
Debt Instrument, Basis Spread on Variable Rate 3.60%  
Line of Credit, Accordion Feature [Member]    
Line of Credit Facility, Maximum Borrowing Capacity $ 20,000  
v3.23.3
Note 8 - Income Taxes (Details Textual)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Effective Income Tax Rate Reconciliation, Percent 204.50% 5.20% 45.70% 0.40%
v3.23.3
Note 9 - Leases (Details Textual) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability $ 3.7 $ 6.8  
Operating Lease, Weighted Average Remaining Lease Term (Year) 3 years 7 months 6 days   4 years 4 months 24 days
Operating Lease, Weighted Average Discount Rate, Percent 5.40%   5.10%
Operating Lease, Liability, Current $ 5.3    
v3.23.3
Note 9 - Leases - Components of Operating Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Lease liability cost $ 1,798 $ 1,953 $ 5,294 $ 4,602
Short-term lease expenses (1) [1] 138 173 592 1,522
Variable lease cost not included in the lease liability (2) [2] 119 97 365 166
Total lease cost $ 2,055 $ 2,223 $ 6,251 $ 6,290
[1] Short-term lease expenses include rent expenses from leases of 12 months or less on the transition date or lease commencement.
[2] Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.
v3.23.3
Note 9 - Leases - Other Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Operating cash flows from operating leases $ 1,659 $ 1,594 $ 5,324 $ 4,100
v3.23.3
Note 9 - Leases - Maturity Schedule of Operating Lease Liabilities (Details)
$ in Thousands
Sep. 30, 2023
USD ($)
2023 (three months) $ 1,599
2024 5,583
2025 3,762
2026 2,489
2027 1,711
Thereafter 2,001
Total future lease payments 17,145
Less: Present value adjustment (1,818)
Long-term Operating Lease Liabilities [Member]  
Present value of future lease payments (1) $ 15,327 [1]
[1] Includes the current portion of operating lease liabilities of $5.3 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.
v3.23.3
Note 10 - Commitments and Contingencies (Details Textual) - USD ($)
$ in Millions
Sep. 30, 2023
Dec. 31, 2022
Unrelated Third Party [Member]    
Financing Receivable, after Allowance for Credit Loss $ 1.5 $ 0.5
Note Receivable, Weighted Average Interest Rate 8.00%  
Unrelated Third Party [Member] | Maximum [Member]    
Financing Receivable, after Allowance for Credit Loss $ 5.0  
Guarantee for Service Agreement [Member]    
Letters of Credit Outstanding, Amount $ 3.1  
v3.23.3
Note 11 - Earn-Out and Warrant Liabilities (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Jul. 26, 2021
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Jul. 01, 2021
Number of Shares Exchangeable at $12.50 (in shares) 1,000,000            
Number of Shares Exchangeable at $15.00 (in shares) 1,000,000            
Number of Shares Exchangeable at $17.50 (in shares) 1,000,000            
Business Combination, Contingent Consideration, Liability, Total   $ 13.8   $ 13.8   $ 6.6 $ 29.6
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability   2.8 $ 0.8 6.8 $ 6.6    
Private Placement Warrant [Member]              
Class of Warrant or Right, Outstanding (in shares)             405,000
Warrants and Rights Outstanding, Term (Year)             5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)             $ 11.5
Warrants and Rights Outstanding   0.4   0.4   $ 0.2 $ 1.4
Fair Value Adjustment of Warrants   $ 0.1 $ 0.1 $ 0.2 $ 0.2    
v3.23.3
Note 11 - Earn-Out and Warrant Liabilities - Earn-out Shares Fair Value Assumptions (Details)
Sep. 30, 2023
Measurement Input, Expected Term [Member]  
Measurement input 4.76
Measurement Input, Price Volatility [Member]  
Measurement input 0.55
v3.23.3
Note 12 - Mezzanine Equity and Stockholders' Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Jul. 01, 2021
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2023
Dec. 31, 2022
Common Stock, Shares Authorized (in shares)   1,000,000,000   1,000,000,000 1,000,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)   $ 0.0001   $ 0.0001 $ 0.0001
Common Stock, Shares, Issued, Including Treasury Shares (in shares)   183,995,624   183,995,624 189,467,338
Treasury Stock, Shares, Retired (in shares)   2,647,605 7,525,796    
Increase (Decrease) in Common Stock Value   $ (0)      
Increase (Decrease) in Additional Paid in Capital   (36,200)      
Increase (decrease) in Retained Earnings (Accumulated Deficit)   (19,200)      
Stock Repurchase Program, Authorized Amount   $ 150,000   $ 150,000  
Treasury Stock, Shares, Acquired (in shares)       5,983,651  
Shares Acquired, Average Cost Per Share (in dollars per share)       $ 5.62  
Number of Shares Subject to Vesting Provision (in shares) 2,916,700     0  
Public Warrant [Member]          
Class of Warrant or Right, Outstanding (in shares) 17,500,000 17,500,000   17,500,000  
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 11.5        
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares) 1        
v3.23.3
Note 13 - Stock-based Compensation (Details Textual) - USD ($)
$ / shares in Units, $ in Millions
 9 Months Ended
Mar. 13, 2023
Jul. 01, 2021
Sep. 30, 2023
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount     $ 18.6
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares)     27,981,601
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares)     20,951,139
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value     $ 86.7
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value     $ 75.7
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)     2,063,783
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value     $ 7.3
Share-Based Payment Arrangement, Option [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)     4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)     10 years
Restricted Stock Units (RSUs) [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)     6,606,932
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)     $ 4.3
Earn-Out RSUs [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)   4 years  
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)   10 years  
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount     $ 59.2
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Fair Value   $ 2.5  
The 2021 Plan [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)     22,975,201
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares) 1,125,374    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Fair Value     $ 2.8
The 2021 Plan [Member] | Restricted Stock Units (RSUs) [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)     4 years
v3.23.3
Note 13 - Stock-based Compensation - Stock-based Compensation (Details) - The 2006, 2016 and 2021 [Member] - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Stock-based Compensation $ 9,285 $ 9,609 $ 26,975 $ 28,287
Cost of Sales [Member]        
Stock-based Compensation 806 667 2,292 1,948
Selling and Marketing Expense [Member]        
Stock-based Compensation 2,358 2,847 7,267 8,705
General and Administrative Expense [Member]        
Stock-based Compensation 5,264 5,060 14,551 14,825
Research and Development Expense [Member]        
Stock-based Compensation $ 857 $ 1,035 $ 2,865 $ 2,809
v3.23.3
Note 13 - Stock-based Compensation - Stock Option Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option [Member] - The 2021 Plan [Member]
Mar. 13, 2023
Expected life (in years) (Year) 6 years 1 month 9 days
Expected volatility 59.19%
Risk-free rate 3.63%
Dividend yield 0.00%
v3.23.3
Note 14 - Financial Instruments (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Money Market Funds [Member]        
Gain (Loss) on Investments $ 2.2 $ 1.2 $ 5.8 $ 1.2
v3.23.3
Note 14 - Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Short term investments $ 178,862 $ 193,244
Liabilities 14,219 6,858
Money market funds (2) [1]   188,769
Company Earn-Outs [Member]    
Liabilities [2]   6,631
Warrant Liabilities [Member]    
Liabilities [2] 397 227
Fair Value, Inputs, Level 1 [Member]    
Short term investments   0
Liabilities 0 0
Money market funds (2) [1]   0
Fair Value, Inputs, Level 1 [Member] | Company Earn-Outs [Member]    
Liabilities [2]   0
Fair Value, Inputs, Level 1 [Member] | Warrant Liabilities [Member]    
Liabilities [2] 0 0
Fair Value, Inputs, Level 2 [Member]    
Short term investments   193,244
Liabilities 397 227
Money market funds (2) [1]   188,769
Fair Value, Inputs, Level 2 [Member] | Company Earn-Outs [Member]    
Liabilities [2]   0
Fair Value, Inputs, Level 2 [Member] | Warrant Liabilities [Member]    
Liabilities [2] 397 227
Fair Value, Inputs, Level 3 [Member]    
Short term investments   0
Liabilities 13,822 6,631
Money market funds (2) [1]   0
Fair Value, Inputs, Level 3 [Member] | Company Earn-Outs [Member]    
Liabilities [2]   6,631
Fair Value, Inputs, Level 3 [Member] | Warrant Liabilities [Member]    
Liabilities [2] 0 0
Certificates of Deposit [Member]    
Cash Equivalents [3] 1,483 1,693
Cash Equivalents [3] 1,483 1,693
Short term investments [3] 3,478 2,620
Certificates of deposit (1) [3]   162
Certificates of Deposit [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents [3] 0 0
Cash Equivalents [3] 0 0
Short term investments [3] 0 0
Short term investments 0  
Certificates of deposit (1) [3]   0
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents [3] 1,483 1,693
Cash Equivalents [3] 1,483 1,693
Short term investments [3] 3,478 2,620
Short term investments 178,862  
Certificates of deposit (1) [3]   162
Certificates of Deposit [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents [3] 0 0
Cash Equivalents [3] 0 0
Short term investments [3] 0 0
Short term investments 0  
Certificates of deposit (1) [3]   $ 0
Money Market Funds [Member]    
Cash Equivalents [1] 4,108  
Cash Equivalents [1] 4,108  
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents [1] 0  
Cash Equivalents [1] 0  
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents [1] 4,108  
Cash Equivalents [1] 4,108  
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents [1] 0  
Cash Equivalents [1] 0  
US Treasury Securities [Member]    
Cash Equivalents 169,793  
Cash Equivalents 169,793  
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash Equivalents 0  
Cash Equivalents 0  
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash Equivalents 169,793  
Cash Equivalents 169,793  
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash Equivalents 0  
Cash Equivalents 0  
Company Earn-Outs [Member]    
Liabilities [2] 13,822  
Company Earn-Outs [Member] | Fair Value, Inputs, Level 1 [Member]    
Liabilities [2] 0  
Company Earn-Outs [Member] | Fair Value, Inputs, Level 2 [Member]    
Liabilities [2] 0  
Company Earn-Outs [Member] | Fair Value, Inputs, Level 3 [Member]    
Liabilities [2] $ 13,822  
[1] Profits on securities for the three and nine months ended September 30, 2023 were $2.2 million and $5.8 million, respectively, and for the three and nine months ended September 30, 2022 were $1.2 million and $1.2 million, respectively.
[2] Refer to “Note 11 — Earn-Out and Warrant Liabilities” for further details.
[3] The majority of certificates of deposit are foreign deposits.
v3.23.3
Note 14 - Financial Instruments - Reconciliation in Level 3 Instruments Measured on Recurring Basis (Details) - Fair Value, Recurring [Member] - Fair Value, Inputs, Level 3 [Member] - Earn-out Shares Liabilities [Member]
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
Opening balance $ 6,631
Included in (loss) gain on earn-out and warrant liabilities 6,752
Reclass from Earnout-RSU 439
Closing balance $ 13,822
v3.23.3
Note 15 - Segment Information (Details Textual)
 9 Months Ended
Sep. 30, 2023
Number of Operating Segments 1
v3.23.3
Note 15 - Segment Information - Segment Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue $ 72,760 $ 62,739 $ 197,201 $ 168,731
North America [Member]        
Revenue 31,751 29,416 84,484 75,648
UNITED STATES        
Revenue 31,115 29,229 82,151 75,461
EMEA [Member]        
Revenue 21,739 19,026 60,800 51,938
GERMANY        
Revenue 9,212 8,576 25,993 22,494
Asia Pacific [Member]        
Revenue 19,270 14,297 51,917 41,145
SINGAPORE        
Revenue $ 8,639 $ 5,697 $ 22,256 $ 14,893
v3.23.3
Note 16 - Loss Per Share - Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Net loss $ (4,230) $ (6,786) $ (25,937) $ (27,041)
Net loss (income) attributable to and accretion of redeemable noncontrolling interest 18 (626) (57) (1,870)
Net loss attributable to AvePoint, Inc. (4,212) (7,412) (25,994) (28,911)
Total net loss available to common shareholders $ (4,212) $ (7,412) $ (25,994) $ (28,911)
Weighted average common shares outstanding (in shares) 181,769 180,732 182,630 179,563
Effect of dilutive securities (in shares) 0 0 0 0
Weighted average diluted shares (in shares) 181,769 180,732 182,630 179,563
Basic and diluted loss per share (in dollars per share) $ (0.02) $ (0.04) $ (0.14) $ (0.16)
v3.23.3
Note 16 - Loss Per Share - Antidilutive Securities (Details) - shares
shares in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Antidilutive securities (in shares) 60,420 59,262
Share-Based Payment Arrangement, Option [Member]    
Antidilutive securities (in shares) 27,982 29,867
Restricted Stock Units (RSUs) [Member]    
Antidilutive securities (in shares) 11,533 8,490
Warrant [Member]    
Antidilutive securities (in shares) 17,905 17,905
Company Earn-Outs [Member]    
Antidilutive securities (in shares) 3,000 3,000
v3.23.3
Note 18 - Subsequent Events (Details Textual) - Revolving Credit Facility [Member] - HSBC Venture Bank USA Inc. [Member] - USD ($)
$ in Millions
Nov. 03, 2023
Apr. 07, 2020
Line of Credit Facility, Maximum Borrowing Capacity   $ 30
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage   0.50%
Secured Overnight Financing Rate (SOFR) [Member]    
Debt Instrument, Basis Spread on Variable Rate   3.60%
Subsequent Event [Member]    
Line of Credit Facility, Maximum Borrowing Capacity $ 30  
Line of Credit Facility, Additional Borrowing Capacity $ 20  
Debt Instrument, Maturity Date Nov. 03, 2026  
Subsequent Event [Member] | Minimum [Member]    
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage 0.50%  
Subsequent Event [Member] | Minimum [Member] | Secured Overnight Financing Rate (SOFR) [Member]    
Debt Instrument, Basis Spread on Variable Rate 3.00%  
Subsequent Event [Member] | Maximum [Member] | Secured Overnight Financing Rate (SOFR) [Member]    
Debt Instrument, Basis Spread on Variable Rate 3.25%  
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage 0.55%  
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