E2OPEN PARENT HOLDINGS, INC. Management report and analysis of the financial situation and operating results. (Form 10-Q)

This article contains a discussion of our business, including a general overview of our business, results of operations, liquidity and capital resources, and quantitative and qualitative information about market risk.

The following discussion should be read in conjunction with Part II, Item 7.,
Management's Discussion and Analysis of Financial Condition and Results of
Operations of our 2021 Form 10-K and the unaudited condensed financial
statements and related notes beginning on page 5. This Item 2 contains "forward
looking" statements that involve risks and uncertainties. See Forward-Looking
Statements at the beginning of this Quarterly Report.

Overview

We are a leading provider of cloud-based, end-to-end SCM software. Our software
combines networks, data and applications to provide a deeply embedded,
mission-critical platform that allows customers to optimize their supply chain
by accelerating growth, reducing costs, increasing visibility and driving
improved resiliency. Given the mission-critical nature of our solutions, we
maintain deep, long-term relationships with our customers, which is reflected by
our gross retention and customer tenure.

Recent Events

On September 1, 2021, we completed the BluJay Acquisition with the issuance of
72,383,299 shares of Class A Common Stock to the BluJay Sellers and the payment
of $774.2 million of cash which includes the repayment of BluJay's debt
facility. The total purchase consideration for the BluJay Acquisition was $1.5
billion.

In connection with the completion of the BluJay Acquisition, we secured $300
million in PIPE financing from institutional investors for the purchase of an
aggregate of 28,909,022 shares of our Class A Common Stock. We also obtained a
$380.0 million incremental term loan to our 2021 Term Loan and increased our
2021 Revolving Credit Facility by $80.0 million to $155.0 million. In addition,
the letter of credit sublimit was increased from $15.0 million to $30.0 million
upon completion of the BluJay Acquisition.

Additionally, the Investor Rights Agreement was amended and restated to add
certain of BluJay's existing stockholders as parties, including certain
affiliates of Francisco Partners and Temasek as well as include a six month
lock-up period from September 1, 2021 through February 28, 2022 for certain
equity holders of E2open and BluJay. The Investor Rights Agreement also provides
Francisco Partners and Temasek the right to nominate one member each to our
board of directors. Mr. Deep Shah and Mr. Martin Fichtner became new directors
on September 1, 2021.

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Operating results

The following table is our condensed consolidated statements of earnings for the periods indicated:



                                           Successor             Predecessor          Successor            Predecessor
                                          Three Months                               Nine Months
                                             Ended           Three Months Ended         Ended           Nine Months Ended
                                          November 30,                                November
($ in thousands)                              2021            November 30, 2020       30, 2021          November 30, 2020
Revenue                                   $    137,002       $            84,081     $   281,408       $           249,022
Cost of revenue                                (72,786 )                 (31,859 )      (150,496 )                 (92,810 )
Total gross profit                              64,216                    52,222         130,912                   156,212

Operating Expenses
Research and development                        25,000                    14,225          56,909                    43,212
Sales and marketing                             18,101                    12,973          41,789                    37,275
General and administrative                      22,871                    10,412          49,989                    30,037
Acquisition-related expenses                    33,216                     5,968          50,168                    11,354
Amortization of acquired intangible
assets                                          19,470                     8,451          26,843                    25,365
Total operating expenses                       118,658                    52,029         225,698                   147,243
(Loss) income from operations                  (54,442 )                     193         (94,786 )                   8,969
Interest and other expense, net                (10,769 )                 (17,575 )       (22,004 )                 (53,255 )
Change in tax receivable agreement
liability                                       (1,470 )                       -          (4,606 )                       -
Loss from change in fair value of
warrant
  liability                                     (7,232 )                       -         (48,448 )                       -
Loss from change in fair value of
contingent
  consideration                                 (1,140 )                       -         (91,180 )                       -
Total other expenses                           (20,611 )                 (17,575 )      (166,238 )                 (53,255 )
Loss before income taxes                       (75,053 )                 (17,382 )      (261,024 )                 (44,286 )
Income tax benefit (expense)                    10,764                    (9,685 )         3,392                   (24,073 )
Net loss                                       (64,289 )     $           (27,067 )      (257,632 )     $           (68,359 )
Less: Net loss attributable to
noncontrolling
  interest                                      (5,072 )                                 (35,640 )

Net loss attributable to E2open Parent

  Holdings, Inc.                          $    (59,217 )                             $  (221,992 )
Net loss attributable to E2open Parent

holdings, inc. Class A Common

  stockholders per share - diluted        $      (0.19 )                             $     (0.98 )
Weighted-average common shares
  outstanding - diluted                        308,132                                   227,186




Our integration strategy and methodology is unique in that we rapidly and
completely integrate acquired businesses into our platform and go-to-market
activity. As such, costs attributable to an acquisition become impractical to
separate post-closing of a business combination. For example, we may elect to
terminate a redundant position from either the target company, or our own
company. Additionally, because of our unique technology with our E2Net
application framework, we are able to rapidly deploy acquired products into our
platform. With the acquisition of BluJay, we have restructured the entire
go-to-market of both businesses into new sales teams, each focused on different
customer groups. As such, we are unable to separate the costs of BluJay from
E2open.

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Three Months Ended November 30, 2021 compared to Three Months Balance at
November 30, 2020

Revenue



                                     Successor             Predecessor
                                   Three Months
                                       Ended           Three Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020       $ Change         % Change
Revenue:
Subscriptions                      $     106,969       $            70,374     $    36,595               52 %
Professional services                     30,033                    13,707          16,326               nm
Total revenue                      $     137,002       $            84,081     $    52,921               63 %
Percentage of revenue:
Subscriptions                                 78 %                      84 %
Professional services                         22 %                      16 %
Total                                        100 %                     100 %




Subscriptions revenue was $107.0 million for the three months ended November 30,
2021, a $36.6 million, or 52%, increase compared to subscriptions revenue of
$70.4 million for the three months ended November 30, 2020. The increase in
subscriptions revenue was primarily due to the BluJay Acquisition and new
organic subscription sales predominantly driven by increases in products
utilized across our current customer portfolio. These increases were partially
offset by the $10.4 million amortization of the fair value adjustment to
deferred revenue related to the purchase price allocation in the Business
Combination. With the early adoption of ASU 2021-08, a fair value adjustment to
deferred revenue for the BluJay Acquisition was not recorded; therefore,
amortization of the fair value adjustment to deferred revenue similar to the
Business Combination adjustment will not occur for the BluJay Acquisition.

Professional services revenue was $30.0 million for the three months ended
November 30, 2021, a $16.3 million increase compared to $13.7 million for the
three months ended November 30, 2020. The increase was primarily related to the
BluJay Acquisition, new subscription sales and customers delaying projects in
fiscal year 2021 due to the COVID-19 pandemic resulting in favorable
year-over-year growth.

Our subscriptions revenue as a percentage of total revenue decreased to 78% for
the third quarter of fiscal year 2022 compared to 84% for the third quarter of
fiscal 2021 driven primarily by amortizing the fair value adjustment to deferred
revenue related to the purchase price allocation in the Business Combination, in
addition to the increase in professional services revenue.

Cost of revenue, gross profit and gross margin



                                     Successor             Predecessor
                                   Three Months
                                       Ended           Three Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020       $ Change         % Change
Cost of revenue:
Subscriptions                      $      30,163       $            15,568     $    14,595               94 %
Professional services                     17,587                    11,346           6,241               55 %
Amortization of acquired
intangible assets                         25,036                     4,945          20,091               nm
Total cost of revenue              $      72,786       $            31,859     $    40,927               nm

Gross profit:
Subscriptions                      $      51,771       $            49,863     $     1,908                4 %
Professional services                     12,445                     2,359          10,086               nm
Total gross profit                 $      64,216       $            52,222     $    11,994               23 %

Gross margin:
Subscriptions                                 48 %                      71 %
Professional services                         41 %                      17 %
Total gross margin                            47 %                      62 %




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Cost of subscriptions was $30.2 million for the three months ended November 30,
2021, a $14.6 million, or 94%, increase compared to $15.6 million for the three
months ended November 30, 2020. This increase was driven by $13.6 million
related to the BluJay Acquisition and an increase in personnel costs for items
such as salaries and incentive compensation, $0.7 million was related to
depreciation expense on capital expenditures for the expansion of our data
centers and $0.2 million for share-based compensation.

Cost of professional services revenue was $17.6 million for the three months
ended November 30, 2021, a $6.2 million, or 55%, increase compared to $11.3
million for the three months ended November 30, 2020. The BluJay Acquisition in
fiscal year 2022 and increases personnel costs such as salaries and incentive
compensation accounted for $5.7 million of the increase in cost of professional
services revenue.

Amortization of acquired intangible assets was $25.0 million for the three
months ended November 30, 2021, a $20.1 million increase compared to $4.9
million for the three months ended November 30, 2020, driven primarily by the
revaluation and change in the composition of the intangible assets as part of
the Business Combination in February 2021 and the BluJay Acquisition in
September 2021.

Our subscriptions gross margin was 48% in the third quarter of fiscal 2022 as
compared to 71% for the third quarter of fiscal 2021 due to the BluJay
Acquisition and the amortization of the fair value adjustment to deferred
revenue related to the purchase price allocation in the Business Combination.
With the early adoption of ASU 2021-08, the BluJay deferred revenue was recorded
under ASC 606 and not at fair value at the acquisition date; therefore,
amortization of the fair value adjustment to deferred revenue similar to the
Business Combination adjustment will not occur for the BluJay Acquisition.

Our professional services gross margin increased to 41% for third quarter of
fiscal 2022 from 17% in the third quarter of fiscal 2021 primarily due to the
BluJay Acquisition in fiscal 2022 and new subscription sales, in addition to
customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic,
which resulted in favorable year-over-year growth.

Research and Development



                                     Successor             Predecessor
                                   Three Months
                                       Ended           Three Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020       $ Change         % Change
Research and development           $      25,000       $            14,225 
   $    10,775               76 %
Percentage of revenue                         18 %                      17 %




Research and development expenses were $25.0 million for the three months ended
November 30, 2021, a $10.8 million, or 76%, increase compared to $14.2 million
in the prior year. The increase was due to $9.8 million related to the BluJay
Acquisition as well as major strategic partnership initiatives around product
development efforts during fiscal year 2022, which resulted in net increased
personnel costs such as salaries and incentive compensation and consulting
expenses. Additionally, there was an increase to share-based compensation
expense of $0.4 million and depreciation expense of $0.5 million related to
capital expenditures for software.

Sales and Marketing



                                     Successor             Predecessor
                                   Three Months
                                       Ended           Three Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020       $ Change         % Change
Sales and marketing                $      18,101       $            12,973     $     5,128               40 %
Percentage of revenue                         13 %                      15 %




Sales and marketing expenses were $18.1 million for the three months ended
November 30, 2021, a $5.1 million, or 40%, increase compared to $13.0 million in
the prior year. The increase was primarily driven by the BluJay Acquisition in
fiscal 2022 as well as additional expenses associated with creating a new logo
sales team and additional marketing resources. Furthermore, share-based
compensation increased by $0.5 million and travel and entertainment expenses
increased by $0.3 million.

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General and Administrative



                                      Successor             Predecessor
                                    Three Months
                                        Ended           Three Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020        $ Change        % Change
General and administrative          $      22,871       $            10,412     $     12,459             nm
Percentage of revenue                          17 %                      12 %




General and administrative expenses were $22.9 million for the three months
ended November 30, 2021, an $12.5 million increase compared to $10.4 million in
the prior year. The increase was primarily attributable to the BluJay
acquisition and costs related to us becoming a public company that were not
incurred in the prior year.

Other Operating Expenses



                                      Successor              Predecessor
                                     Three Months
                                        Ended            Three Months Ended
                                     November 30,
($ in thousands)                         2021             November 30, 2020        $ Change        % Change
Acquisition and other related
expenses                            $       33,216       $             5,968     $     27,248             nm
Amortization of acquired
intangible assets                           19,470                     8,451           11,019             nm
Total other operating expenses      $       52,686       $            14,419     $     38,267             nm




Acquisition and other related expenses were $33.2 million for the three months
ended November 30, 2021, a $27.2 million increase compared to $6.0 million for
the three months ended November 30, 2020. The increase was mainly related to
legal and consulting expenses associated with the BluJay Acquisition in fiscal
2022.

Amortization of acquired intangible assets were $19.5 million for the three
months ended November 30, 2021, an $11.0 million increase, compared to $8.5
million for the three months ended November 30, 2020. The increase was a result
of the BluJay Acquisition in September 2021 partially offset by the revaluation
and change in the composition of the intangible assets associated with the
Business Combination in February 2021.

Interest and other charges, net


                                      Successor             Predecessor
                                    Three Months
                                        Ended           Three Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020       $ Change        % Change
Interest and other expense, net     $     (10,769 )     $           (17,575 )   $     6,806             -39 %




Interest and other expense, net was $10.8 million for the three months ended
November 30, 2021, an $6.8 million, or 39%, decrease compared to $17.6 million
in the prior year. The decrease was primarily driven by the reduction in
outstanding debt, as well as the associated interest rate on the debt refinanced
in the Business Combination in February 2021.

Amendment of the agreement on tax claims

During the three months ended November 30, 2021, we recorded a $1.5 million
expense related to the change in the fair value of the tax receivable agreement
liability, including interest. Pursuant to ASC 805, Business Combination and
relevant tax law, we calculated the fair value of the tax receivable agreement
payments and identified the timing of the utilization of the tax attributes. The
tax receivable agreement liability, related to exchanges as of the Business
Combination date, is revalued at the end of each reporting period with the gain
or loss as well as the associated interest reflected in change in tax receivable
agreement liability in the Condensed Consolidated Statements of Operations in
the period in which the event occurred. We did not have a tax receivable
agreement prior to the Business Combination.

In addition, under ASC 450, transactions with partnership unit holders after the
acquisition date will result in additional Tax Receivable Agreement liabilities
that are recorded on a gross undiscounted basis. The increase in the Tax
Receivable Agreement liability under ASC 450 for the three months ended November
30, 2021 was $3.1 million.

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Loss from change in fair value of warrant liability

We recorded a loss of $7.2 million during the three months ended November 30,
2021 for the change in fair value on the revaluation of our warrant liability
associated with our public, private placement and forward purchase warrants. We
are required to revalue the warrants at the end of each reporting period and
reflect in the Condensed Consolidated Statements of Operations a gain or loss
from the change in fair value of the warrant liability in the period in which
the change occurred. We did not have outstanding warrants prior to the Business
Combination.

Loss from change in fair value of contingent consideration

We recorded a loss of $1.1 million during the three months ended November 30,
2021 for the change in fair value on the revaluation of our contingent
consideration associated with our restricted B-2 common stock. We are required
to revalue the contingent consideration at the end of each reporting period or
upon conversion and reflect in the Condensed Consolidated Statements of
Operations a gain or loss from the change in fair value of the contingent
consideration in the period in which the change occurred. We did not have
restricted Series B-2 common stock prior to the Business Combination.

Provision for Income Taxes



                                      Successor             Predecessor
                                    Three Months
                                        Ended           Three Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020       $ Change       % Change
Loss before income taxes            $     (75,053 )     $           (17,382 )   $  (57,671 )           nm
Income tax benefit (expense)               10,764                    (9,685 )       20,449             nm




Loss before income taxes was $75.1 million for the three months ended November
30, 2021, a $57.7 million increase compared to $17.4 million for the three
months ended November 30, 2020. This increase is primarily related to the $27.2
million acquisition related expenses for the BluJay Acquisition, an $11.0
million increase in the amortization of the intangible assets, a loss of $7.2
million for the fair value adjustments for the warrant liability, a loss of $1.1
million associated with the fair value adjustments for the contingent
consideration liability related to the restricted Series B-2 common stock along
with the $10.4 million amortization of the fair value adjustment to deferred
revenue related to the purchase price allocation in the Business Combination.
These expenses were partially offset by $6.8 million of lower interest expense
in the third quarter of fiscal 2022 compared to the same period of the prior
year.

Income tax benefit was $10.8 million for the three months ended November 30,
2021 compared to a $9.7 million expense for the three months ended November 30,
2020. The change was primarily due to an increase in loss from continuing
operations included in the tax provision for November 30, 2021 that s previously
attributable to affiliates as of November 30, 2020. This benefit was partially
offset by nondeductible mark-to-market losses associated with contingent
liabilities and certain equity consideration liabilities and changes in certain
jurisdictions within which we operate as well as the impact to fiscal 2022 of
losses attributable to our noncontrolling interest in our affiliate. In
accordance with ASC 740-20-45-11, we accounted for the tax effect of the step-up
in income tax basis related to transactions with or among shareholders and
recognized a deferred tax asset and corresponding increase in stockholders'
equity of $36.8 million.

Nine Months Ended November 30, 2021 compared to Nine Months Ended November 30,
2020

Revenue



                                      Successor             Predecessor
                                     Nine Months
                                        Ended            Nine Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020        $ Change        % Change
Revenue:
Subscriptions                       $     219,728       $           209,013     $     10,715              5 %
Professional services                      61,680                    40,009           21,671             54 %
Total revenue                       $     281,408       $           249,022     $     32,386             13 %
Percentage of revenue:
Subscriptions                                  78 %                      84 %
Professional services                          22 %                      16 %
Total                                         100 %                     100 %




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Subscriptions revenue was $219.7 million for the nine months ended November 30,
2021, a $10.7 million, or 5%, increase compared to subscriptions revenue of
$209.0 million for the nine months ended November 30, 2020. The increase in
subscriptions revenue was primarily due to the BluJay Acquisition in fiscal 2022
and new organic subscription sales predominantly driven by increases in products
utilized across our current customer portfolio, partially offset by $47.1
million amortization of the fair value adjustment to deferred revenue related to
the purchase price allocation in the Business Combination. With the early
adoption of ASU 2021-08, a fair value adjustment to deferred revenue for the
BluJay Acquisition was not recorded; therefore, amortization of the fair value
adjustment to deferred revenue similar to the Business Combination adjustment
will not occur for the BluJay Acquisition.

Professional services revenue was $61.7 million for the nine months ended
November 30, 2021, a $21.7 million, or 54%, increase compared to $40.0 million
for the nine months ended November 30, 2020. The increase was primarily related
to the BluJay Acquisition, new subscription sale and customers delaying projects
in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth
year over year.

Our subscriptions revenue as a percentage of total revenue decreased to 78% for
the first nine months of fiscal year 2022 compared to 84% for fiscal 2021 driven
primarily by the BluJay Acquisition and the amortizing the fair value adjustment
to deferred revenue related to the purchase price allocation in the Business
Combination, in addition to the increase in professional services revenue.

Cost of revenue, gross profit and gross margin


                                      Successor             Predecessor
                                     Nine Months
                                        Ended            Nine Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020       $ Change       % Change
Cost of revenue:
Subscriptions                       $      62,917       $            44,566     $    18,351            41 %
Professional services                      38,694                    32,791           5,903            18 %
Amortization of acquired
intangible assets                          48,885                    15,453          33,432            nm
Total cost of revenue               $     150,496       $            92,810     $    57,686            62 %

Gross profit:
Subscriptions                       $     107,927       $           148,995     $   (41,068 )         -28 %
Professional services                      22,985                     7,217          15,768            nm
Total gross profit                  $     130,912       $           156,212     $   (25,300 )         -16 %

Gross margin:
Subscriptions                                  49 %                      71 %
Professional services                          37 %                      18 %
Total gross margin                             47 %                      63 %




Cost of subscriptions was $62.9 million for the nine months ended November 30,
2021, a $18.4 million, or 41%, increase compared to $44.6 million for the nine
months ended November 30, 2020. The BluJay Acquisition and increased personnel
costs for salaries and incentive compensation accounted for $14.6 million of
this increase. Additionally, depreciation expense increased by $2.9 million
related to capital expenditures for the expansion of our data centers.

Cost of professional services revenue was $38.7 million for the nine months
ended November 30, 2021, a $5.9 million, or 18%, increase compared to $32.8
million for the nine months ended November 30, 2020. The BluJay Acquisition in
fiscal year 2022 and an increase in personnel costs for salaries and incentive
compensation accounted for $5.5 million of this increase. There was also an
additional $0.2 million in increased consulting services.

Amortization of acquired intangible assets was $48.9 million for the nine months
ended November 30, 2021, a $33.4 million increase compared to $15.5 million for
the nine months ended November 30, 2020, driven primarily by the BluJay
Acquisition in September 2021 and revaluation and change in the composition of
the intangible assets as part of the Business Combination in February 2021.

Our subscriptions gross margin was 49% for the first nine months of fiscal 2022
as compared to 71% for fiscal 2021 mainly due to the BluJay Acquisition and the
amortization of the fair value adjustment to deferred revenue related to the
purchase price allocation in the Business Combination. With the early adoption
of ASU 2021-08, the BluJay deferred revenue was recorded under ASC 606 and not
at fair value at the acquisition date; therefore, amortization of the fair value
adjustment to deferred revenue similar to the Business Combination adjustment
will not occur for the BluJay Acquisition.

                                       39

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Our Professional Services gross margin increased to 37% for the first nine months of Fiscal 2022 from 18% in the first nine months of Fiscal 2021, primarily due to the acquisition of BluJay, new subscription sales and customers who delayed projects in fiscal 2021 due to the COVID-19 pandemic, which resulted in favorable year-over-year growth.

Research and Development



                                      Successor             Predecessor
                                     Nine Months
                                        Ended            Nine Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020        $ Change        % Change
Research and development            $      56,909       $            43,212     $     13,697             32 %
Percentage of revenue                          20 %                      17 %




Research and development expenses were $56.9 million for the nine months ended
November 30, 2021, a $13.7 million, or 32%, increase compared to $43.2 million
in the prior year. The increase was due to the BluJay Acquisition in fiscal year
2022 and major strategic partnership initiatives around product development
efforts which resulted in net increased personnel costs for salaries and
incentive compensation of $11.3 million. Additionally, share-based compensation
expense of $0.8 million and depreciation expense of $1.7 million related to
capital expenditures for software contributed to the increase.

Sales and Marketing



                                      Successor             Predecessor
                                     Nine Months
                                        Ended            Nine Months Ended
                                    November 30,
($ in thousands)                        2021             November 30, 2020        $ Change        % Change
Sales and marketing                 $      41,789       $            37,275     $      4,514             12 %
Percentage of revenue                          15 %                      15 %




Sales and marketing expenses were $41.8 million for the nine months ended
November 30, 2021, a $4.5 million, or 12%, increase compared to $37.3 million in
the prior year. The increase was primarily driven by the BluJay Acquisition in
fiscal 2022 and the investment in our new logo sales and marketing resources
resulting in additional expenses of $5.4 million. Additionally, share-based
compensation increased by $0.9 million. These were offset by a reduction in
commissions expenses associated with the revaluation of prepaid commissions as a
result of the Business Combination in February 2021.

General and Administrative



                                     Successor             Predecessor
                                    Nine Months
                                       Ended            Nine Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020        $ Change        % Change
General and administrative         $      49,989       $            30,037 
   $     19,952              66 %
Percentage of revenue                         18 %                      12 %




General and administrative expenses were $50.0 million for the nine months ended
November 30, 2021, a $20.0 million, or 66%, increase compared to $30.0 million
in the prior year. The increase was primarily attributable to the BluJay
acquisition and costs related to us becoming a public company that were not
incurred in the prior year.

Other Operating Expenses



                                         Successor                Predecessor
                                     Nine Months Ended         Nine Months Ended
($ in thousands)                     November 30, 2021         November 30, 2020        $ Change        % Change
Acquisition and other related
expenses                            $            50,168       $            11,354     $     38,814              nm
Amortization of acquired
intangible assets                                26,843                    25,365            1,478               6 %
Total other operating expenses      $            77,011       $            36,719     $     40,292              nm




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Acquisition and other related expenses were $50.2 million for the nine months
ended November 30, 2021, a $38.8 million increase compared to $11.4 million for
the nine months ended November 30, 2020. The increase was mainly related to
legal and consulting expenses associated with the acquisition of BluJay in
fiscal 2022.

Amortization of acquired intangible assets was $26.8 million for the nine months
ended November 30, 2021, a $1.5 million, or 6%, increase, compared to $25.4
million for the nine months ended November 30, 2020. The increase was a result
of the BluJay Acquisition and the revaluation and change in the composition of
the intangible assets associated with the Business Combination in February 2021.

Interest and other charges, net


                                         Successor                Predecessor
                                     Nine Months Ended         Nine Months Ended
($ in thousands)                     November 30, 2021         November 30, 2020        $ Change       % Change
Interest and other expense, net     $           (22,004 )     $           (53,255 )   $     31,251           -59 %




Interest and other expense, net was $22.0 million for the nine months ended
November 30, 2021, a $31.3 million, or 59%, decrease compared to $53.3 million
in the prior year. The decrease was primarily driven by the reduction in
outstanding debt, as well as the associated interest rate on the debt refinanced
in the Business Combination in February 2021.

Amendment of the agreement on tax claims

During the nine months ended November 30, 2021, we recorded a $4.6 million
expense related to the change in the fair value of the tax receivable agreement
liability under ASC 805, including interest. We have calculated the fair value
of the tax receivable agreement payments and identified the timing of the
utilization of the tax attributes. The tax receivable agreement liability,
related to exchanges as of the Business Combination date, is revalued at the end
of each reporting period with the gain or loss as well as the associated
interest reflected in change in tax receivable agreement liability in the
Condensed Consolidated Statements of Operations in the period in which the event
occurred. We did not have a tax receivable agreement prior to the Business
Combination.

In addition, under ASC 450, transactions with partnership unit holders after the
acquisition date will result in additional Tax Receivable Agreement liabilities
that are recorded on a gross undiscounted basis. The increase in the Tax
Receivable Agreement liability under ASC 450 for the nine months ended November
30, 2021 was $13.2 million.

Loss from change in fair value of warrant liability

We recorded a loss of $48.4 million during the nine months ended November 30,
2021 for the change in fair value on the revaluation of our warrant liability
associated with our public, private placement and forward purchase warrants. We
are required to revalue the warrants at the end of each reporting period and
reflect in the Condensed Consolidated Statements of Operations a gain or loss
from the change in fair value of the warrant liability in the period in which
the change occurred. We did not have outstanding warrants prior to the Business
Combination.

Loss from change in fair value of contingent consideration

We recorded a loss of $91.2 million during the nine months ended November 30,
2021 for the change in fair value on the revaluation of our contingent
consideration associated with our restricted Series B-1 and B-2 common stock and
Sponsor Side Letter. We are required to revalue the contingent consideration at
the end of each reporting period or upon conversion and reflect in the Condensed
Consolidated Statements of Operations a gain or loss from the change in fair
value of the contingent consideration in the period in which the change
occurred. The Series B-1 common stock converted into Class A Common Stock on
June 8, 2021. We did not have restricted Series B-1 and B-2 common stock prior
to the Business Combination.

                                       41

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Provision for Income Taxes



                                    Successor             Predecessor
                                   Nine Months
                                      Ended            Nine Months Ended
                                   November 30,
($ in thousands)                       2021            November 30, 2020       $ Change       % Change
Loss before income taxes           $   (261,024 )     $           (44,286 )   $  (216,738 )          nm
Income tax benefit (expense)              3,392                   (24,073 )        27,465            nm




Loss before income taxes was $261.0 million for the nine months ended November
30, 2021, a $216.7 million increase compared to $44.3 million for the nine
months ended November 30, 2020. This increase is primarily related to the $33.7
million acquisition related expenses for the BluJay Acquisition, a loss of $48.4
million for the fair value adjustments for the warrant liability and $91.2
million associated with the fair value adjustments for the contingent
consideration liability related to the Sponsor Side Letter and restricted Series
B-1 and B-2 common stock along with the $47.1 million amortization of the fair
value adjustment to deferred revenue related to the purchase price allocation in
the Business Combination. These expenses were partially offset by $31.3 million
of lower interest expense in fiscal 2022 compared to fiscal 2021.

Income tax benefit was $3.4 million for the nine months ended November 30, 2021
compared to expense of $24.1 million for the nine months ended November 30,
2020. The change was primarily due to an increase in loss from continuing
operations included in the tax provision for November 30, 2021 that was
previously attributable to affiliates as of November 30, 2020. This benefit was
partially offset by nondeductible mark-to-market losses associated with
contingent liabilities and certain equity consideration liabilities and changes
in valuation allowances in certain jurisdictions within which we operate as well
as the impact to fiscal 2022 of losses attributable to our noncontrolling
interest in our affiliate. In accordance with ASC 740-20-45-11, we accounted for
the tax effect of the step-up in income tax basis related to transactions with
or among shareholders and recognized a deferred tax asset and corresponding
increase in stockholders' equity of $36.8 million.

Non-GAAP Financial Measures

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

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

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

                                       42

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The table below shows our non-GAAP earnings reconciled to our reported earnings, whichever is closest we GAAP measurement, for the periods indicated:


                                     Successor                Predecessor              Successor                Predecessor
                                Three Months Ended        Three Months

Nine months ended Nine months ended (in thousands of dollars)

                 November 30, 2021         November 30, 

2020 November 30, 2021 November 30, 2020
Subscription revenue

           $           106,969       $            70,374     $           219,728       $           209,013
Business Combination
adjustment (1)                               10,394                         -                  47,099                         -
Non-GAAP subscriptions
revenue                                     117,363                    70,374                 266,827                   209,013
Professional services revenue                30,033                    13,707                  61,680                    40,009
Non-GAAP revenue                $           147,396       $            84,081     $           328,507       $           249,022




(1)

Amortization of the fair value adjustment of deferred revenue related to the purchase price allocation as part of the business combination.

The table below shows our non-GAAP gross margin reconciled to our reported gross margin, whichever is closest we GAAP measurement, for the periods indicated:


                                  Successor             Predecessor           Successor             Predecessor
                                Three Months        Three Months Ended       Nine Months         Nine Months Ended
                                    Ended                                       Ended
                                November 30,                                November 30,
($ in thousands)                    2021             November 30, 2020          2021             November 30, 2020
Gross profit
Reported gross profit           $      64,216       $            52,222     $     130,912       $           156,212
Business Combination
adjustment (1)                         10,394                         -            47,099                         -
Depreciation and amortization          27,771                     6,994            56,823                    20,373
Non-recurring/non-operating
costs (2)                                 506                       263             1,090                       467
Share-based and unit-based
compensation (3)                          482                       239             1,012                       525
Non-GAAP gross profit           $     103,369       $            59,718     $     236,936       $           177,577
Gross margin                             46.9 %                    62.1 %            46.5 %                    62.7 %
Non-GAAP gross margin                    70.1 %                    71.0 %            72.1 %                    71.3 %




(1)
Amortization of the fair value adjustment to deferred revenue related to the
purchase price allocation in the Business Combination.
(2)
Primarily includes foreign currency exchange gain and losses and other
non-recurring expenses such as systems integrations, legal entity
simplification, advisory fees and expenses related to retention of key employees
from acquisitions.
(3)
Reflects non-cash, long-term share-based and unit-based compensation expense,
primarily related to senior management.

                                       43

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The table below shows our adjusted EBITDA reconciled to our net loss, whichever is closest we GAAP measurement, for the periods indicated:


                                  Successor             Predecessor          Successor            Predecessor
                                Three Months        Three Months Ended      Nine Months        Nine Months Ended
                                    Ended                                      Ended
                                November 30,                                 November
($ in thousands)                    2021             November 30, 2020       30, 2021          November 30, 2020
Net loss                        $     (64,289 )     $           (27,067 )   $  (257,632 )     $           (68,359 )
Adjustments:
Interest expense, net                   9,981                    16,974          22,161                    52,999
Income tax expense                    (10,764 )                   9,685          (3,392 )                  24,073
Depreciation and amortization          50,496                    17,310          91,496                    51,176
EBITDA                                (14,576 )                  16,902        (147,367 )                  59,889
EBITDA Margin                           -10.6 %                    20.1 %         -52.4 %                    24.0 %
Business Combination
adjustment (1)                         10,394                         -          47,099                         -
Acquisition-related
adjustments (2)                        33,216                     5,968          50,168                    11,354
Change in tax receivable
agreement liability (3)                 1,470                         -           4,606                         -
Loss from change in fair
value of warrant
  liability (4)                         7,232                         -          48,448                         -
Loss from change in fair
value of contingent
  consideration (5)                     1,140                         -          91,180                         -
Non-recurring/non-operating
costs (6)                               2,987                     2,982           5,486                     3,401
Share-based and unit-based
compensation (7)                        4,027                     2,403           8,961                     6,724
Adjusted EBITDA                 $      45,890       $            28,255     $   108,581       $            81,368
Adjusted EBITDA Margin                   31.1 %                    33.6 %          33.1 %                    32.7 %




(1)
Amortization of the fair value adjustment to deferred revenue related to the
purchase price allocation in the Business Combination.
(2)
Primarily includes advisory, consulting, accounting and legal expenses incurred
in connection with mergers and acquisitions activities, including related
valuation, negotiation and integration costs and capital-raising activities,
including costs related to the acquisition of Amber Road, Inc., the Business
Combination and the BluJay Acquisition.
(3)
Represents the expense related to the change in the fair value of the tax
receivable agreement liability, including interest.
(4)
Represents the fair value adjustment at each balance sheet date of the warrant
liability related to the public, private placement and forward purchase
warrants.
(5)
Represents the fair value adjustment at each balance sheet date of the
contingent consideration liability related to the restricted Series B-1 and B-2
common stock and Sponsor Side Letter.
(6)
Primarily includes foreign currency exchange gain and losses and other
non-recurring expenses such as systems integrations, legal entity simplification
and advisory fees.
(7)
Reflects non-cash, long-term share-based and unit-based compensation expense,
primarily related to senior management.

Three months completed November 30, 2021 compared to the three months ended November 30, 2020

Non-GAAP subscription revenue


                                        Successor                Predecessor
                                   Three Months Ended        Three Months Ended
($ in thousands)                    November 30, 2021         November 30, 2020        $ Change        % Change
Non-GAAP subscriptions revenue     $           117,363       $            70,374     $     46,989             67 %




Non-GAAP subscriptions revenue was $117.4 million for the three months ended
November 30, 2021, a $47.0 million, or 67%, increase compared to $70.4 million
for the three months ended November 30, 2020. The increase in Non-GAAP
subscriptions revenue relates to the BluJay Acquisition and new organic
subscription sales predominately driven by increases in products utilized across
our customer portfolio alongside strategic partnership initiatives.

                                       44

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Non-GAAP Revenue



                        Successor                Predecessor
                   Three Months Ended        Three Months Ended
($ in thousands)    November 30, 2021         November 30, 2020      $ Change       % Change
Non-GAAP revenue   $           147,396       $            84,081     $  63,315             75 %




Non-GAAP revenue was $147.4 million for the three months ended November 30,
2021, a $63.3 million, or 75%, increase compared to $84.1 million for the three
months ended November 30, 2020. The increase in Non-GAAP revenue was mainly due
to the $47.0 million increase in our subscriptions revenue related to the BluJay
Acquisition and new organic sales driven by increases in products utilized
across our current customer portfolio. Additionally, $16.3 million of the
increase was due to an increase in our professional services revenue primarily
related to the BluJay Acquisition, new subscription sales and customers delaying
projects in fiscal year 2021 due to the COVID-19 pandemic, which resulted in
favorable year-over-year growth.

Gross Profit



                        Successor                 Predecessor
                    Three Months Ended        Three Months Ended
($ in thousands)    November 30, 2021          November 30, 2020      $ Change       % Change
Gross profit       $             64,216       $            52,222     $  11,994             23 %
Gross margin                       46.9 %                    62.1 %




Gross profit was $64.2 million for the three months ended November 30, 2021, a
$12.0 million, or 23%, increase compared to $52.2 million for three months ended
November 30, 2020. The increase in gross profit was primarily due to the BluJay
Acquisition partially offset by the $10.4 million amortization of the fair value
adjustment to deferred revenue related to the purchase price allocation in the
Business Combination. Gross margin was 47% for the third quarter of fiscal 2022
compared to 62% for the third quarter of fiscal 2021.

Non-GAAP Gross Profit



                                     Successor             Predecessor
                                   Three Months        Three Months Ended
                                       Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020        $ Change        % Change
Non-GAAP gross profit              $     103,369       $            59,718     $     43,651             73 %
Non-GAAP gross margin                       70.1 %                    71.0 %




Non-GAAP gross profit was $103.4 million for the three months ended November 30,
2021, a $43.7 million, or 73%, increase compared to $59.7 million for the three
months ended November 30, 2020. The increase in adjusted gross profit was due to
increase in Non-GAAP subscriptions revenue and professional services revenue as
discussed above. The Non-GAAP gross margin was slightly down in the third
quarter of fiscal 2022 at 70% compared to 71% in the third quarter of fiscal
2021.

EBITDA



                        Successor                Predecessor
                   Three Months Ended        Three Months Ended
($ in thousands)    November 30, 2021         November 30, 2020      $ Change      % Change
EBITDA             $           (14,576 )     $            16,902     $ (31,478 )         nm
EBITDA margin                    -10.6 %                    20.1 %




                                       45
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EBITDA was a loss of $14.6 million for the three months ended November 30, 2021,
a $31.5 million decrease compared to $16.9 million for three months ended
November 30, 2020. EBITDA margins decreased to a negative 11% for the third
quarter of fiscal 2022 compared to 20% in the prior year. The decrease in EBITDA
and EBITDA margin was primarily related to the $10.4 million amortization of the
fair value adjustment to deferred revenue related to the purchase price
allocation in the Business Combination, the loss of $7.2 million for the fair
value adjustment for the warrant liability and loss of $1.1 million associated
with the fair value adjustment for the contingent consideration liability
related to the restricted Series B-2 common stock and the additional $27.2
million of acquisition related expenses incurred during the third quarter of
fiscal 2022 mainly related to the BluJay Acquisition, partially offset by higher
revenues in fiscal 2022.

Adjusted EBITDA



                                     Successor             Predecessor
                                   Three Months
                                       Ended           Three Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020        $ Change        % Change
Adjusted EBITDA                    $      45,890       $            28,255     $     17,635              62 %
Adjusted EBITDA margin                      31.1 %                    33.6 %




Adjusted EBITDA was $45.9 million for the three months ended November 30, 2021,
a $17.6 million, or 62%, increase compared to $28.3 million for the three months
ended November 30, 2020. Adjusted EBITDA margin was lower at 31% for the third
quarter of fiscal 2022 compared to 34% for the third quarter of fiscal 2021. The
Adjusted EBITDA decline was primarily due to public company costs and the BluJay
Acquisition for which synergy savings are not fully realized.

Nine month period ended November 30, 2021 compared to the nine months ended November 30, 2020

Non-GAAP subscription revenue


                                        Successor                Predecessor
                                    Nine Months Ended         Nine Months Ended
($ in thousands)                    November 30, 2021         November 30, 2020        $ Change        % Change
Non-GAAP subscriptions revenue     $           266,827       $           209,013     $     57,814             28 %




Non-GAAP subscriptions revenue was $266.8 million for the nine months ended
November 30, 2021, a $57.8 million, or 28%, increase compared to $209.0 million
for the nine months ended November 30, 2020. The increase in Non-GAAP
subscriptions revenue relates to the BluJay Acquisition and new organic
subscription sales predominately driven by increases in products utilized across
our customer portfolio alongside strategic partnership initiatives.

Non-GAAP Revenue



                        Successor                Predecessor
                    Nine Months Ended         Nine Months Ended
($ in thousands)    November 30, 2021         November 30, 2020      $ Change       % Change
Non-GAAP revenue   $           328,507       $           249,022     $  79,485             32 %




Non-GAAP revenue was $328.5 million for the nine months ended November 30, 2021,
a $79.5 million, or 32%, increase compared to $249.0 million for the nine months
ended November 30, 2020. The increase in Non-GAAP revenue was mainly due to the
$57.8 million increase in our subscriptions revenue related to the BluJay
Acquisition and new organic sales driven by increases in products utilized
across our current customer portfolio. Additionally, $21.7 million of the
increase was due to an increase in our professional services revenue primarily
related to the BluJay Acquisition, new subscription sales and customers delaying
projects in fiscal year 2021 due to the COVID-19 pandemic, which resulted in
favorable year-over-year.

                                       46
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Gross Profit



                        Successor                Predecessor
                    Nine Months Ended         Nine Months Ended
($ in thousands)    November 30, 2021         November 30, 2020      $ Change      % Change
Gross profit       $           130,912       $           156,212     $ (25,300 )         -16 %
Gross margin                      46.5 %                    62.7 %




Gross profit was $131.0 million for the nine months ended November 30, 2021, a
$25.3 million, or 16%, decrease compared to $156.2 million for nine months ended
November 30, 2020. The decrease in gross profit was primarily due to the $47.1
million amortization of the fair value adjustment to deferred revenue related to
the purchase price allocation in the Business Combination. Gross margin was 47%
for the first nine months of fiscal 2022 compared to 63% for the first nine
months of fiscal 2021.

Non-GAAP Gross Profit



                                     Successor             Predecessor
                                    Nine Months         Nine Months Ended
                                       Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020        $ Change        % Change
Non-GAAP gross profit              $     236,936       $           177,577     $     59,359             33 %
Non-GAAP gross margin                       72.1 %                    71.3 %




Non-GAAP gross profit was $236.9 million for the nine months ended November 30,
2021, a $59.4 million, or 33%, increase compared to $177.6 million for the nine
months ended November 30, 2020. The increase in adjusted gross profit was due to
increase in Non-GAAP subscriptions revenue and professional services revenue as
discussed above. The Non-GAAP gross margin increased to 72% for the first nine
months of fiscal 2022 from 71% for the first nine months of fiscal 2021.

EBITDA



                        Successor                Predecessor
                    Nine Months Ended         Nine Months Ended
($ in thousands)    November 30, 2021         November 30, 2020       $ Change      % Change
EBITDA             $          (147,367 )     $            59,889     $ (207,256 )         nm
EBITDA margin                    -52.4 %                    24.0 %




EBITDA was a loss of $147.4 million for the nine months ended November 30, 2021,
a $207.3 million decrease compared to $59.9 million for the nine months ended
November 30, 2020. EBITDA margins decreased to a negative 52% for the first nine
months of fiscal 2022 compared to 24% in the prior year. The decrease in EBITDA
and EBITDA margin was primarily related to the $47.1 million amortization of the
fair value adjustment to deferred revenue related to the purchase price
allocation in the Business Combination, a loss of $48.4 million for the fair
value adjustment for the warrant liability and a loss of $91.2 million
associated with the fair value adjustment for the contingent consideration
liability related to the Sponsor Side Letter and restricted Series B-1 and B-2
common stock and the additional $33.7 million of acquisition related expenses
incurred during fiscal 2022 related to the BluJay Acquisition, partially offset
by higher revenues in fiscal 2022.

Adjusted EBITDA



                                     Successor             Predecessor
                                    Nine Months
                                       Ended            Nine Months Ended
                                   November 30,
($ in thousands)                       2021             November 30, 2020        $ Change        % Change
Adjusted EBITDA                    $     108,581       $            81,368     $     27,213              33 %
Adjusted EBITDA margin                      33.1 %                    32.7 %




                                       47
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Adjusted EBITDA was $108.6 million for the nine months ended November 30, 2021,
a $27.2 million, or 33%, increase compared to $81.4 million for the nine months
ended November 30, 2020. Adjusted EBITDA margins were consistent at 33% for the
first nine months of fiscal 2022 and 2021.

Cash and capital resources

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

We had $56.5 million in cash and cash equivalents and $155.0 million of unused
borrowing capacity under our 2021 Revolving Credit Facility as of November 30,
2021. See Note 10, Notes Payable to the Notes to the Unaudited Condensed
Consolidated Financial Statements. We believe our existing cash and cash
equivalents, cash provided by operating activities and, if necessary, the
borrowing capacity under our 2021 Revolving Credit Facility will be sufficient
to meet our working capital, debt repayment and capital expenditure requirements
for at least the next twelve months.

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

Debt

2021 Term Loan and Revolving Credit Facility

At February 4, 2021in the context of the Business Combination, E2open, LLCour subsidiary, took out the 2021 Term Loan for $525.0 million and the 2021 Revolving Credit Facility for $75.0 million. At September 1, 2021in connection with the acquisition of BluJay, the 2021 credit agreement was amended to include a
$380.0 million additional term loan, an increase in the letter of credit sub-limit of $15.0 million at $30.0 million and an increase in the 2021 revolving credit facility of $75.0 million at $155.0 million.

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

The 2021 Term Loan has a variable interest rate which was 4.00% and 3.69% as of
November 30, 2021 and February 28, 2021, respectively. Principal payments of
$1.3 million are due on the last day of each February, May, August and November
commencing August 2021. As of November 30, 2021 and February 28, 2021, the 2021
Term Loan had a principal balance outstanding of $901.4 million and $525.0
million, respectively, and there were no amounts drawn on the 2021 Revolving
Credit Facility.

Cash Flows

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



                                                         Successor             Predecessor
                                                        Nine Months
                                                           Ended            Nine Months Ended
                                                       November 30,
($ in thousands)                                           2021             November 30, 2020
Net cash provided by operating activities              $      28,182       $            30,054
Net cash used in investing activities                       (798,859 )                 (12,048 )

Net cash provided by (used in) financing activities 632,987

             (8,078 )
Effect of exchange rate changes on cash and cash
equivalents                                                    1,657                       101
Net (decrease) increase in cash, cash equivalents
and restricted cash                                         (136,033 )                  10,029
Cash, cash equivalents and restricted cash at
beginning of period                                          207,542                    48,428
Cash, cash equivalents and restricted cash at end of
period                                                 $      71,509       $            58,457




                                       48
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Nine month period ended November 30, 2021 compared to the nine months ended November 30, 2020

As of November 30, 2021, our consolidated cash, cash equivalents and restricted
cash was $71.5 million, a $136.0 million decrease from our balance of $207.5
million as of February 28, 2021.

Net cash provided by operating activities for the nine months ended November 30,
2021 was $28.2 million compared to $30.1 million for the nine months ended
November 30, 2020. The $1.9 million decrease in cash was primarily driven by
expenses related to the BluJay Acquisition offset by additional revenue from
BluJay, organic growth and customers delaying projects in fiscal year 2021 due
to the COVID-19 pandemic.

Net cash used in investing activities was $798.9 million and $12.0 million for
the nine months ended November 30, 2021 and 2020, respectively. During fiscal
year 2022, $774.2 million was used for the BluJay Acquisition. During the nine
months of fiscal year 2022 and 2021, $24.6 million and $12.0 million were used
for the acquisition of property and software related to our data centers,
respectively.

Net cash provided by financing activities for the nine months ended November 30,
2021 was $633.0 million compared to net cash used of $8.1 million for nine
months ended November 30, 2020. The increase in cash provided by financing
activities was mainly due to the $300.0 million in PIPE investment proceeds,
additional borrowings of $380.0 million for the BluJay Acquisition and $15.0
million under the 2021 Revolving Credit Facility in fiscal 2022. We only
borrowed $15.6 million during the first nine months of fiscal 2021. During the
first nine months of fiscal 2021 we received $3.4 million of proceeds from the
sale of membership units. We repaid $3.0 million more in debt in fiscal 2021
than in fiscal 2022. The repayment of financing lease obligations was $1.3
million higher in fiscal 2022 than in fiscal 2021. Additionally, we paid $2.5
million for the repurchase of common stock to pay withholding taxes, $16.8
million for the repurchase of Common Units upon conversion, $7.1 million of
offering costs associated with the PIPE investment financing and $10.4 million
in debt issuance costs related to the additional borrowings in fiscal 2022.

Agreement on tax claims

Concurrently with the completion of the Business Combination, we entered into
the Tax Receivable Agreement with certain selling equity holders of E2open
Holdings. Pursuant to the Tax Receivable Agreement, we will pay certain sellers,
as applicable, 85% of the tax savings that we realize from increases in the tax
basis in E2open Holdings' assets as a result of the sale of E2open Holdings'
equity interests, the future exchange of the Common Units for shares of Class A
Common Stock (or cash), certain pre-existing tax attributes of certain sellers
and certain other tax benefits related to entering into the Tax Receivable
Agreement including tax benefits attributable to payments under the Tax
Receivable Agreement. The term of the Tax Receivable Agreement will continue
until all such tax benefits have been utilized or expired unless we exercise our
right to terminate the Tax Receivable Agreement for an amount representing the
present value of anticipated future tax benefits under the Tax Receivable
Agreement or certain other acceleration events occur. We will retain the benefit
of the remaining 15% of these cash savings.

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

The liability related to the Tax Receivable Agreement was $67.9 million as of
November 30, 2021, consisting of Tax Receivable liabilities recorded under ASC
805 of $54.7 million and $13.2 million under ASC 450, assuming (1) a constant
corporate tax rate of 24.1%, (2) no dispositions of corporate subsidiaries, (3)
no material changes in tax law and (4) we do not elect an early termination of
the Tax Receivable Agreement. However, due to the uncertainty of various
factors, including: (a) the timing and value of future exchanges, (b) the amount
and timing of our future taxable income, (c) changes in our tax rate, (d) no
future dispositions of any corporate stock and (e) changes in the tax law, the
likely tax savings we will realize and the resulting amounts we are likely to
pay to the E2open Sellers pursuant to the Tax Receivable Agreement are
uncertain. Additionally, interest will accrue on the portion of the Tax
Receivable Agreement liability recorded under ASC 805 at a rate of LIBOR plus
100 basis points. The portion of the Tax Receivable Agreement liability under
ASC 450 is recorded on a gross undiscounted basis.

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

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

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

Conversion of contingent consideration

The contingent consideration liability was $67.0 million and $150.8 million as
of November 30, 2021 and February 28, 2021, respectively. The fair value
remeasurements resulted in a loss of $1.1 million and $91.2 million for the
three and nine months ended November 30, 2021, respectively. There was no gain
or loss for the three and nine months ended November 30, 2020 as the contingent
consideration liability was not recorded until February 4, 2021. The contingent
liability represents the Series B-1 common stock, Series B-2 common stock,
Series 1 RCUs and Series 2 RCUs.

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

Leases

Effective March 1, 2021, we began accounting for leases in accordance with ASC
842, Leases, which requires lessees to recognize lease liabilities and ROU
assets on the balance sheet for contracts that provide lessees with the right to
control the use of identified assets for periods of greater than 12 months. Upon
adoption of ASC 842, we recognized an operating lease liability of $23.0
million, a ROU operating asset of $22.4 million and no change to retained
earnings.

Our non-cancelable operating leases for our office spaces have various
expiration dates through August 2029. Under these leases, our undiscounted
future cash flows utilized in the calculation of the lease liabilities as of
November 30, 2021 were: $2.7 million for December 1, 2021 through February 28,
2022, $8.2 million for fiscal 2023, $6.9 million for fiscal 2024, $4.9 million
for fiscal 2025, $3.0 million for fiscal 2026 and $4.1 million thereafter. These
numbers include interest of $2.5 million.

Our non-cancelable financing lease arrangements relate to software and computer
equipment as well as vehicles and have various expiration dates through June
2025. We have the right to purchase the software and computer equipment anytime
during the lease or upon lease completion. We do not have the right to purchase
the vehicles. Under these leases, our undiscounted future cash flows utilized in
the calculation of the lease liabilities as of November 30, 2021 were: $0.4
million for December 1, 2021 through February 28, 2022, $2.3 million for fiscal
2023 and $2.1 million for fiscal 2024. These numbers include interest of $0.3
million.

Off-balance sheet arrangements

We are responsible for reimbursement of outstanding obligations related to any
letters of credit issued under our $30.0 million available letters of credit
accessible under our $155.0 million 2021 Revolving Credit Facility. We do not
have any other material off-balance sheet arrangements or contingent
commitments. There were no outstanding letters of credit or borrowings under the
2021 Revolving Credit Facility as of November 30, 2021 and February 28, 2021.

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Critical accounting policies and estimates

Our condensed consolidated financial statements have been prepared in accordance
with U.S. GAAP. Preparation of the financial statements requires management to
make judgments, estimates and assumptions that impact the reported amount of
revenue and expenses, assets and liabilities and the disclosure of contingent
assets and liabilities. We consider an accounting judgment, estimate or
assumption to be critical when (1) the estimate or assumption is complex in
nature or requires a high degree of judgment and (2) the use of different
judgments, estimates and assumptions could have a material impact on our
consolidated financial statements. Our significant accounting policies are
described in Note 2, Summary of Significant Accounting Policies to the Notes to
the Consolidated Financial Statements in our 2021 Form 10-K.

There have been no changes to our critical accounting policies and estimates
during the three and nine months ended November 30, 2021 from those previously
disclosed in Part II, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations in our 2021 Annual Report.

Recent accounting pronouncements

For more information on recent accounting pronouncements and our expected impact, see Note 2, Accounting Standards in the Notes to the Condensed Consolidated Financial Statements.

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