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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-35958
DIGITAL TURBINE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
 22-2267658
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
110 San Antonio Street, Suite 160, Austin, TX
 
78701
(Address of Principal Executive Offices) (Zip Code)
(512) 387-7717
(Registrant’s Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
Common Stock, Par Value $0.0001 Per ShareAPPSThe Nasdaq Stock Market LLC
(NASDAQ Capital Market)
(Title of Class)(Trading Symbol)(Name of Each Exchange on Which Registered)
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer
Non-Accelerated FilerSmaller 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 October 26, 2021, the Company had 96,625,684 shares of its common stock, $0.0001 par value per share, outstanding.



Digital Turbine, Inc.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED September 30, 2021
TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION
ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets1
(in thousands, except par value and share amounts)
September 30, 2021March 31, 2021
(Unaudited)
ASSETS
Current assets  
Cash$95,522 $30,778 
Restricted cash695 340 
Accounts receivable, net228,107 61,985 
Prepaid expenses and other current assets20,852 4,282 
Total current assets345,176 97,385 
Property and equipment, net22,116 13,050 
Right-of-use assets17,914 3,495 
Deferred tax assets, net 12,963 
Intangible assets, net467,528 53,300 
Goodwill559,033 80,176 
Other non-current assets844  
TOTAL ASSETS$1,412,611 $260,369 
LIABILITIES AND STOCKHOLDER'S EQUITY  
Current liabilities 
Accounts payable$167,104 $34,953 
Accrued license fees and revenue share81,881 46,196 
Accrued compensation23,675 9,817 
Short-term debt13,423 14,557 
Other current liabilities20,549 5,626 
Acquisition purchase price liabilities335,500  
Total current liabilities642,132 111,149 
Long-term debt, net of debt issuance costs244,001  
Deferred tax liabilities, net19,571  
Other non-current liabilities18,525 4,108 
Total liabilities 924,229 115,257 
Commitments and contingencies (Note 13)
Stockholders' equity  
Preferred stock
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1)
100 100 
Common stock
$0.0001 par value: 200,000,000 shares authorized; 97,180,782 issued and 96,619,930 outstanding at September 30, 2021; 90,685,553 issued and 89,949,847 outstanding at March 31, 2021
10 10 
Additional paid-in capital741,781 373,310 
Treasury stock (754,599 shares at September 30, 2021 and March 31, 2021)
(71)(71)
Accumulated other comprehensive loss(36,721)(903)
Accumulated deficit(218,902)(227,334)
Total stockholders' equity attributable to Digital Turbine, Inc.486,197 145,112 
Non-controlling interest2,185  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,412,611 $260,369 
1In the quarter ending June 30, 2021, the Company initiated two significant acquisitions. Please refer to Note 3 in the accompanying condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income / (Loss)1
(Unaudited)
(in thousands, except per share amounts)
Three months ended September 30,
Six months ended September 30,
2021202020212020
Net revenues$310,205 $70,893 $522,820 $129,905 
Costs of revenues and operating expenses
License fees and revenue share213,145 40,532 351,493 72,832 
Other direct costs of revenues3,838 662 6,371 1,222 
Product development17,904 4,217 33,451 8,625 
Sales and marketing17,479 4,835 31,215 9,153 
General and administrative41,307 8,531 64,613 15,335 
Total costs of revenues and operating expenses293,673 58,777 487,143 107,167 
Income from operations16,532 12,116 35,677 22,738 
Interest and other income / (expense), net
Change in fair value of contingent consideration(22,087)(10,757)(22,087)(10,757)
Interest expense, net(1,955)(287)(3,112)(593)
Foreign exchange transaction loss(249) (519) 
Other expense, net(477)(38)(512)(38)
Total interest and other income / (expense), net(24,768)(11,082)(26,230)(11,388)
Income / (loss) before income taxes(8,236)1,034 9,447 11,350 
Income tax provision / (benefit)(2,349)661 1,081 1,037 
Net income / (loss)(5,887)373 8,366 10,313 
Less: net loss attributable to non-controlling interest(35) (66) 
Net income / (loss) attributable to Digital Turbine, Inc.(5,852)373 8,432 10,313 
Other comprehensive loss
Foreign currency translation adjustment(15,892)(45)(36,673)(187)
Comprehensive income / (loss)(21,779)328 (28,307)10,126 
Less: comprehensive loss attributable to non-controlling interest(128) (921) 
Comprehensive income / (loss) attributable to Digital Turbine, Inc.$(21,651)$328 $(27,386)$10,126 
Net income / (loss) per common share
Basic$(0.06)$ $0.09 $0.11 
Diluted$(0.06)$ $0.08 $0.11 
Weighted-average common shares outstanding
Basic96,157 88,035 93,807 87,712 
Diluted96,157 96,057 100,457 94,988 
1In the quarter ending June 30, 2021, the Company initiated two significant acquisitions. Please refer to Note 3 in the accompanying condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows1
(Unaudited)
(in thousands)
Six months ended September 30,
20212020
Cash flows from operating activities  
Net income$8,366 $10,313 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization24,981 3,241 
Non-cash interest expense298 36 
Stock-based compensation5,695 3,668 
Stock-based compensation for services rendered3,935 458 
Change in fair value of contingent consideration22,087 10,757 
Right-of-use asset1,951 244 
Deferred income taxes178  
(Increase) / decrease in assets:
Accounts receivable, gross(61,855)(13,735)
Allowance for credit losses(31)597 
Prepaid expenses and other current assets(4,917)1,637 
Other non-current assets95  
Increase / (decrease) in liabilities:
Accounts payable51,676 4,776 
Accrued license fees and revenue share1,382 2,777 
Accrued compensation(45,694)1,225 
Other current liabilities2,643 4,005 
Other non-current liabilities(3,036)(333)
Net cash provided by operating activities7,754 29,666 
Cash flows from investing activities
Business acquisitions, net of cash acquired(148,056)(7,968)
Capital expenditures(10,411)(4,177)
Net cash used in investing activities(158,467)(12,145)
Cash flows from financing activities
Payment of contingent consideration (9,302)
Proceeds from borrowings267,134  
Payment of debt issuance costs(2,988) 
Options and warrants exercised2,155 3,526 
Repayment of debt obligations(46,256)(250)
Net cash provided by / (used in) financing activities220,045 (6,026)
Effect of exchange rate changes on cash(4,233)(187)
Net change in cash65,099 11,308 
Cash and restricted cash, beginning of period31,118 21,659 
Cash and restricted cash, end of period$96,217 $32,967 
Supplemental disclosure of cash flow information
Interest paid$2,199 $571 
Income taxes paid$693 $ 
Supplemental disclosure of non-cash activities
Common stock for the acquisition of Fyber$356,686 $ 
Unpaid cash consideration for the acquisition of Fyber Minority Interest$3,108 $ 
Unpaid cash consideration for the acquisition of AdColony$100,000 $ 
Fair value of contingent consideration in connection with business acquisitions$235,500 $ 
1In the quarter ending June 30, 2021, the Company initiated two significant acquisitions. Please refer to Note 3 in the accompanying condensed consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity1
(Unaudited)
(in thousands, except share counts)
Common Stock
Shares
AmountPreferred Stock
Shares
AmountTreasury Stock
Shares
AmountAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income / (Loss)
Accumulated
Deficit
Non-Controlling InterestTotal
Balance at March 31, 202189,949,847 $10 100,000 $100 754,599 $(71)$373,310 $(903)$(227,334)$ $145,112 
Net income / (loss)— — — — — — — — 14,284 (31)14,253 
Foreign currency translation— — — — — — — (20,019)— (762)(20,781)
Stock-based compensation207,758 — — — — — 2,365 — — — 2,365 
Stock-based compensation for services rendered— — — — — — 1,340 — — — 1,340 
Shares for acquisition of Fyber4,716,935 — — — — — 359,233 — — — 359,233 
Non-controlling interests in Fyber— — — — — — — — — 24,558 24,558 
Options exercised178,127 — — — — — 695 — — — 695 
Balance at June 30, 202195,052,667 $10 100,000 $100 754,599 $(71)$736,943 $(20,922)$(213,050)$23,765 $526,775 
Net loss— — — — — — — — (5,852)(35)(5,887)
Foreign currency translation— — — — — — — (15,799)— (93)(15,892)
Stock-based compensation28,477 — — — — — 3,330 — — — 3,330 
Stock-based compensation for services rendered— — — — — — 2,595 — — — 2,595 
Shares for acquisition of Fyber1,058,364 — — — — — (2,547)— — — (2,547)
Acquisition of non-controlling interests in Fyber— — — — — — — — — (21,452)(21,452)
Options exercised480,422 — — — — — 1,460 — — — 1,460 
Balance at September 30, 202196,619,930 $10 100,000 $100 754,599 $(71)$741,781 $(36,721)$(218,902)$2,185 $488,382 
1In the quarter ending June 30, 2021, the Company initiated two significant acquisitions. Please refer to Note 3 in the accompanying condensed consolidated financial statements.





6



Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity1
(Unaudited)
(in thousands, except share counts)
Common Stock
Shares
AmountPreferred Stock
Shares
AmountTreasury Stock
Shares
AmountAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income / (Loss)
Accumulated
Deficit
Non-Controlling InterestTotal
Balance at March 31, 202087,306,784 $10 100,000 $100 754,599 $(71)$360,224 $(591)$(282,218)$ $77,454 
Net income— — — — — — — — 9,940 — 9,940 
Foreign currency translation— — — — — — — (142)— — (142)
Stock-based compensation— — — — — — 1,438 — — — 1,438 
Stock-based compensation for services rendered— — — — — — 173 — — — 173 
Options exercised224,012 — — — — — 437 — — — 437 
Balance at June 30, 202087,530,796 $10 100,000 $100 754,599 $(71)$362,272 $(733)$(272,278)$ $89,300 
Net income— — — — — — — — 373 — 373 
Foreign currency translation— — — — — — — (45)— — (45)
Stock-based compensation61,553 — — — — — 2,230 — — — 2,230 
Stock-based compensation for services rendered45,110 — — — — — 285 — — — 285 
Options exercised1,059,644 — — — — — 3,089 — — — 3,089 
Balance at September 30, 202088,697,103 $10 100,000 $100 754,599 $(71)$367,876 $(778)$(271,905)$ $95,232 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7


Digital Turbine, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2021
(in thousands, except share and per share amounts)
1.    Description of Business
Digital Turbine, Inc., through its subsidiaries (collectively "Digital Turbine" or the "Company"), is a leading end-to-end solution for mobile technology companies to enable advertising and monetization solutions. Its digital media platform powers frictionless end-to-end application for brand discovery and advertising, user acquisition and engagement, operational efficiency, and monetization opportunities. The Company provides on-device solutions to all participants in the mobile application ecosystem that want to connect with end users and consumers who hold the device, including mobile carriers and device original equipment manufacturers (“OEMs”) that participate in the app economy, app publishers and developers, and brands and advertising agencies.
2.    Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The Company consolidates the financial results and reports non-controlling interests representing the economic interests held by other equity holders of subsidiaries that are not 100% owned by the Company. The calculation of non-controlling interests excludes any net income / (loss) attributable directly to the Company. All intercompany balances and transactions have been eliminated in consolidation.
These financial statements should be read in conjunction with the Company's audited financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2021 (the "2021 Form 10-K").
Unaudited Interim Financial Information
These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company’s financial condition, results of operations, comprehensive income, stockholders’ equity, and cash flows for the interim periods indicated. The results of operations for the three and six months ended September 30, 2021, are not necessarily indicative of the operating results for the full fiscal year.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, allowance for credit losses, stock-based compensation, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, fair value of contingent earn-out considerations (please see Note 13, "Commitments and Contingencies," for further information on the fair value of the Company's contingent earn-out considerations), incremental borrowing rates for right-of-use assets and lease liabilities, and tax valuation allowances. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions.
In light of the ongoing and quickly evolving COVID-19 pandemic, management has considered the impacts of the COVID-19 pandemic on the Company’s critical and significant accounting estimates and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates or judgments or revise the carrying value of its assets or liabilities as a result of the COVID-19 pandemic. These estimates may change as new events occur and additional information is obtained and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s condensed consolidated financial statements.
8


Summary of Significant Accounting Policies
There have been no significant changes to the Company’s significant accounting policies in Note 4, “Summary of Significant Accounting Policies,” of the notes to the consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2021, other than the "New Accounting Standards Adopted" disclosed below and changes to the Company's segment reporting disclosed in Note 4, "Segment Information."
Revenue Recognition
As mentioned above, there have been no significant changes to the Company's revenue recognition policies, now inclusive of the acquisitions of AdColony and Fyber defined and disclosed below in Note 3, "Acquisitions", since its Annual Report on Form 10-K for the fiscal year ended March 31, 2021.
Prior to the acquisitions of AdColony and Fyber, the Company had one operating and reportable segment called Media Distribution. As a result of the acquisitions, the Company reassessed its operating and reportable segments in accordance with ASC 280, Segment Reporting. Effective April 1, 2021, the Company reports its results of operations through the three segments disclosed below in Note 4, "Segment Information," each of which represents an operating and reportable segment.
On Device Media
This segment is the legacy single operating and reporting segment (Media Distribution) of the Company prior to the AdColony and Fyber acquisitions.
In App Media - AdColony
AdColony’s principal operations consist of supplying a mobile advertising platform that includes a direct supply of in-app advertising inventory to its customers. AdColony's customers provide insertion orders for advertising during campaign windows where AdColony provides, inserts, and tracks the performance of the advertising to serve as the direct supplier for the customer. Customers will contract for this service, which is monetized through a measurement of user views, clicks, or installs of the target product or service offered by the customer. AdColony's customers generally pay subsequently to the total aggregation of the views, clicks, and installs billed on a monthly basis. Specifically, the aggregated activities include the following:
i.When a user installs a game (i.e., a user plays a game, sees advertising, clicks on it, and installs a game), based on a cost per install (CPI) arrangement.
ii.When a mobile ad is delivered to a user, based on a CPM (cost per thousand impressions) arrangement (i.e., every thousand impressions of a mobile ad inside the publisher's inventory, which can be on a mobile app or website).
iii.When a user plays a mobile video ad all the way to completion, based on a CPCV (cost per completed view) arrangement.
iv.When a user clicks on a mobile ad, based on a CPC (cost per click) arrangement (i.e., after each instance when an ad is clicked inside the publisher's inventory).
Due to the nature of AdColony's principal operations and the similarities between how customers obtain control of promised services between this segment and the Company's other two segments, revenues for this segment are recognized in a manner consistent with the Company's legacy On Device Media business.
9


In App Media - Fyber
Fyber’s principal operations consist of supplying a mobile advertising platform that includes a direct supply of in-app advertising inventory to its customers. Fyber specializes in software-based automated ("programmatic") trading of advertisements and aims to enable mobile app publishers to monetize their digital contents through the placement of targeted, high-quality ads within their apps. Fyber connects app developers and their users with advertisers worldwide, who bid on the ad space within the apps (predefined spaces and instances within apps where ads can be displayed at certain points of time during a session of a user engaging with the app). Fyber’s customers provide insertion orders or equivalent contracts for advertising during campaign windows where Fyber provides, inserts, and tracks the performance of the advertising to serve as the direct supplier for the customer. Alternatively, Fyber also contracts with customers using a framework agreement that is not specific to a campaign or budget, but instead determines parameters for the mobile advertising service. Customers will contract for these services, which are monetized through a measurement of user impressions, clicks, or installs of the target product or service offered by the customer. Fyber’s customers generally pay subsequently to the total aggregation of the impressions, clicks, and installs billed on a monthly basis. Specifically, the aggregated activities include the following:
i.When a user installs a game (i.e., a user plays a game, sees advertising, clicks on it, and installs a game) based on a CPA (cost per action) arrangement.
ii.When a mobile ad is delivered to a user, based on a CPM (cost per thousand impressions) arrangement (i.e., every thousand impressions of a mobile ad inside the publisher's inventory, which can be on a mobile app or website).
iii.When a user plays a mobile video ad all the way to completion, based on a CPCV (cost per completed view) arrangement.
iv.When a user clicks on a mobile ad, based on a CPC (cost per click) arrangement (i.e., after each instance when an ad is clicked inside the publisher's inventory).
Due to the nature of Fyber's principal operations and the similarities between how customers obtain control of promised services between this segment and the Company's other two segments, revenues for this segment are recognized in a manner consistent with the Company's legacy On Device Media business.
New Accounting Standards Adopted
ASU 2019-12
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The Company adopted this guidance as of April 1, 2021. ASU 2019-12 did not have a material impact on the Company's condensed consolidated financial statements upon adoption.
ASU 2020-04
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The Company is implementing a transition plan to identify and modify its loans and other financial instruments with attributes that are either directly or indirectly influenced by LIBOR. The Company is continuing to assess ASU 2020-04 and its impact on the Company’s condensed consolidated financial statements.
10


3.    Acquisitions
Acquisition of Fyber N.V.
On May 25, 2021, the Company completed the initial closing of the acquisition of 95.1% of the outstanding voting shares (the “Majority Fyber Shares”) of Fyber N.V. (“Fyber”) pursuant to a Sale and Purchase Agreement (the "Fyber Acquisition") between Tennor Holding B.V., Advert Finance B.V., and Lars Windhorst (collectively, the “Seller”), the Company, and Digital Turbine Luxembourg S.ar.l., a wholly-owned subsidiary of the Company. The remaining outstanding shares in Fyber (the “Minority Fyber Shares”) are (to the Company's knowledge) held by other shareholders of Fyber (the “Minority Fyber Shareholders”) and are presented as non-controlling interests within these financial statements.
Fyber is a leading mobile advertising monetization platform empowering global app developers to optimize profitability through quality advertising. Fyber’s proprietary technology platform and expertise in mediation, real-time bidding, advanced analytics tools, and video combine to deliver publishers and advertisers a highly valuable app monetization solution. Fyber represents an important and strategic addition for the Company in its mission to develop one of the largest full-stack, fully-independent, mobile advertising solutions in the industry. The combined platform offering is advantageously positioned to leverage the Company’s existing on-device software presence and global distribution footprint.
The Company acquired Fyber in exchange for an estimated aggregate consideration of up to $600,000, consisting of:
i.Approximately $150,000 in cash, $124,336 of which was paid to the Seller at the closing of the acquisition and the remainder of which is to be paid to the Minority Fyber Shareholders for the Minority Fyber Shares pursuant to the tender offer described below;
ii.5,816,588 newly-issued shares of common stock of the Company to the Seller, which such number of shares were determined based on the volume-weighted average price of the common stock on NASDAQ during the 30-day period prior to the closing date, equal in value to $359,233 at the Company's common stock closing price on May 25, 2021, as follows.
1.3,216,935 newly-issued shares of common stock of the Company equal in value to $198,678, issued at the closing of the acquisition;
2.1,500,000 newly-issued shares of common stock of the Company equal in value to $92,640, issued on June 17, 2021;
3.1,040,364 newly-issued shares of common stock of the Company equal in value to $64,253, issued on July 16, 2021;
4.59,289 shares of common stock equal in value to $3,662, to be newly-issued during its fiscal second quarter 2022, but subject to a true-up reduction based on increased transaction costs associated with the staggered delivery of the Majority Fyber Shares to the Company, which true-up reduction has been finalized, as described below; and
iii.Contingent upon Fyber’s net revenues (revenues less associated license fees and revenue share) being equal to or higher than $100,000 for the 12-month earn-out period ending on March 31, 2022, as determined in the manner set forth in the Sale and Purchase Agreement, a certain number of shares of the Company's common stock, which will be newly-issued to the Seller at the end of the earn-out period, and under certain circumstances, an amount of cash, which value of such shares, based on the weighted average share price for the 30-days prior to the end of the earn-out period, and cash in aggregate will not exceed $50,000 (subject to set-off against certain potential indemnification claims against the Seller). Based on estimates at the time of the acquisition, the Company initially determined it was unlikely Fyber would achieve the earn-out net revenue target and, as a result, no contingent liability was recognized at that time.
The Company paid the cash closing amount on the closing date with a combination of available cash-on-hand and borrowings under the Company’s senior credit facility.
11


On September 30, 2021, the Company entered into the Second Amendment Agreement (the “Second Amendment Agreement”) to the Sale and Purchase Agreement for the Fyber Acquisition. Pursuant to the Second Amendment Agreement, the parties agreed to settle the remaining number of shares of Company common stock to be issued to the Seller at 18,000 shares (i.e., a reduction of 41,289 shares from the 59,289 shares described in (ii)(4) above). As a result, the Company issued a total of 5,775,299 shares of Company common stock to the Seller in connection with the Company’s acquisition of Fyber.
As of September 30, 2021, based on current estimates, the Company determined that it is now likely that Fyber will achieve the earn-out net revenue target and, as a result, recognized and accrued the fair value of the contingent earn-out consideration of $31,000 as a charge to change in fair value of contingent consideration on the condensed consolidated statements of operations and comprehensive income / (loss). The fair value of the contingent consideration is subject to material changes based upon certain assumptions, primarily the estimated likelihood of Fyber achieving the earn-out net revenue target. Company will re-evaluate the fair value of the contingent consideration on a quarterly basis until the end of the earn-out period.
Pursuant to certain German law on public takeovers, following the closing, the Company launched a public tender offer to the Minority Fyber Shareholders to acquire from them the Minority Fyber Shares. The tender offer was approved and published in July 2021, and is subject to certain minimum price rules under German law. The timing and the conditions of the tender offer, including the consideration of €0.84 per share offered to the Minority Fyber Shareholders in connection with the tender offer, was determined by the Company pursuant to the applicable Dutch and German takeover laws. During the quarter ended September 30, 2021, the Company purchased approximately $21,000 of Fyber's outstanding shares, resulting in an ownership percentage of Fyber of approximately 99.4%. The Company expects to complete the purchase of the remaining outstanding Fyber shares during its fiscal third quarter 2022.
The delisting of Fyber's remaining outstanding shares on the Frankfurt Stock Exchange was completed on August 6, 2021.
The fair values of the assets acquired and liabilities assumed at the date of acquisition are presented on a preliminary basis and are as follows1:
Assets acquired
Cash$71,489 
Accounts receivable64,877 
Other current assets10,470 
Property and equipment1,561 
Right-of-use asset13,191 
Publisher relationships106,305 
Developed technology86,900 
Trade names32,574 
Customer relationships31,400 
Favorable lease1,483 
Goodwill300,705 
Other non-current assets851 
Total assets acquired$721,806 
Liabilities assumed
Accounts payable$78,090 
Accrued license fees and revenue share5,929 
Accrued compensation52,929 
Other current liabilities12,049 
Short-term debt25,789