DIGITAL TURBINE, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K)

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The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Financial Statements and the Notes thereto included in this
Annual Report on Form 10-K (the "Report"). The following discussion contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and the provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements involve substantial risks
and uncertainties. When used in this Report, the words "anticipate," "believe,"
"estimate," "expect," "will," "seeks," "should," "could," "would," "may," and
similar expressions, as they relate to our management or us, are intended to
identify such forward-looking statements. Our actual results, performance, or
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements as a result of a variety of factors, including
those set forth under "Risk Factors" in this Report, as well as those described
elsewhere in this Report and in our other public filings. The risks included are
not exhaustive and additional factors could adversely affect our business and
financial performance. We operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible
for management to predict all such risk factors, nor can management assess the
impact of all such risk factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Historical operating
results are not necessarily indicative of the trends in operating results for
any future period. We do not undertake any obligation to update any
forward-looking statements made in this Report. Accordingly, investors should
use caution in relying on past forward-looking statements, which are based on
known results and trends at the time they are made, to anticipate future results
or trends. This Report and all subsequent written and oral forward-looking
statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred
to in this section.

All dollar amounts, except share amounts, in Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations on this Form 10-K are
in thousands.

Company Overview

Digital Turbine, Inc., through its subsidiaries (collectively "Digital Turbine"
or the "Company"), is a leading, independent mobile growth platform that levels
up the landscape for advertisers, publishers, carriers, and device original
equipment manufacturers ("OEMs"). The Company offers end-to-end products and
solutions leveraging proprietary technology to all participants in the mobile
application ecosystem, enabling brand discovery and advertising, user
acquisition and engagement, and operational efficiency for advertisers. In
addition, our products and solutions provide monetization opportunities for
OEMs, carriers, and application ("app" or "apps") publishers and developers.
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RECENT DEVELOPMENTS

credit agreement


On February 3, 2021, the Company entered into a credit agreement (the "Credit
Agreement") with Bank of America, N.A. ("BoA"), which provides for a revolving
line of credit (the "Revolver") of up to $100,000 with an accordion feature
enabling the Company to increase the total amount up to $200,000. Funds are to
be used for acquisitions, working capital, and general corporate purposes. The
Credit Agreement contains customary covenants, representations, and events of
default and also requires the Company to comply with a maximum consolidated
leverage ratio and minimum fixed charge coverage ratio.

On April 29, 2021, the Company entered into an amended and restated Credit
Agreement (the "New Credit Agreement") with BoA, as a lender and administrative
agent, and a syndicate of other lenders, which provides for a revolving line of
credit of up to $400,000. The revolving line of credit matures on April 29, 2026
and contains an accordion feature enabling the Company to increase the total
amount of the revolver by $75,000 plus an amount that would enable the Company
to remain in compliance with its consolidated secured net leverage ratio, on
such terms as agreed to by the parties. The New Credit Agreement contains
customary covenants, representations, and events of default and also requires
the Company to comply with a maximum consolidated secured net leverage ratio and
minimum consolidated interest coverage ratio.

On December 29, 2021, the Company amended the New Credit Agreement (the "First
Amendment"), which provides for an increase in the revolving line of credit by
$125,000, which increased the maximum aggregate principal amount of the
revolving line of credit to $525,000. The First Amendment made no other changes
to the term or interest rates of the New Credit Agreement.

Amounts outstanding under the New Credit Agreement accrue interest at an annual
rate equal to, at the Company's election, (i) the London Inter-Bank Offered Rate
("LIBOR") plus between 1.50% and 2.25%, based on the Company's consolidated
leverage ratio, or (ii) a base rate based upon the highest of (a) the federal
funds rate plus 0.50%, (b) BoA's prime rate, or (c) LIBOR plus 1.00% plus
between 0.50% and 1.25%, based on the Company's consolidated leverage ratio.
Additionally, the New Credit Agreement is subject to an unused line of credit
fee between 0.15% and 0.35% per annum, based on the Company's consolidated
leverage ratio.

The Company's payment and performance obligations under the New Credit Agreement
and related loan documents are secured by substantially all of its personal
property assets, whether now existing or hereafter acquired, subject to certain
exclusions. If the Company acquires any real property assets with a fair market
value in excess of $5,000, it is required to grant a security interest in such
real property as well. All such security interests are required to be first
priority security interests, subject to certain permitted liens.

As of March 31, 2022, we had $524,134 drawn against the revolving line of credit
under the New Credit Agreement. The proceeds were used to finance the
acquisitions detailed below. As of March 31, 2022, we were in compliance with
the consolidated leverage ratio, interest coverage ratio, and other covenants
under the New Credit Agreement.

Acquisitions


The Company recently completed the acquisitions of Appreciate, AdColony Holding
AS ("AdColony"), and Fyber, N.V. ("Fyber") to execute on its expressed strategy
of becoming a leading end-to-end solution for mobile brand acquisition,
advertising, and monetization. The following is a summary of each of those
acquisitions:

Appreciate: On March 1, 2021, Digital Turbine, through its wholly-owned
subsidiary Digital Turbine (EMEA) Ltd. ("DT EMEA"), an Israeli company, entered
into a Share Purchase Agreement with Triapodi Ltd., an Israeli company (d/b/a
Appreciate) ("Appreciate"), the stockholder representative, and the stockholders
of Appreciate, pursuant to which DT EMEA acquired, on March 2, 2021, all of the
outstanding capital stock of Appreciate in exchange for total consideration of
$20,003 in cash (the "Appreciate Acquisition"). Under the terms of the Share
Purchase Agreement, DT EMEA entered into bonus arrangements to pay up to $6,000
in retention bonuses and performance bonuses to the founders and certain other
employees of Appreciate. None of the goodwill recognized was deductible for tax
purposes.

The acquisition of Appreciate delivered valuable deep ad-tech and algorithmic
expertise to help Digital Turbine execute on its broader, longer-term vision.
Deploying Appreciate's technology expertise across Digital Turbine's global
scale and reach should further benefit partners and advertisers that are a part
of the combined Company's platform.
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AdColony Holding AS: On April 29, 2021, the Company completed the acquisition of
AdColony Holding AS, a Norway company ("AdColony"), pursuant to a Share Purchase
Agreement (the "AdColony Acquisition"). The Company acquired all outstanding
capital stock of AdColony in exchange for an estimated total consideration in
the range of $400,000 to $425,000, to be paid as follows: (1) $100,000 in cash
paid at closing (subject to customary closing purchase price adjustments), (2)
$100,000 in cash to be paid six months after closing, and (3) an estimated
earn-out in the range of $200,000 to $225,000, to be paid in cash, based on
AdColony achieving certain future target net revenue, less associated cost of
goods sold (as such term is referenced in the Share Purchase Agreement), over a
12-month period ending on December 31, 2021 (the "Earn-Out Period"). Under the
terms of the earn-out, the Company would pay the seller a certain percentage of
actual net revenue (less associated cost of goods sold, as such term is
referenced in the Share Purchase Agreement) of AdColony, depending on the extent
to which AdColony achieves certain target net revenue (less associated cost of
goods sold, as such term is referenced in the Share Purchase Agreement) over the
Earn-Out Period. The earn-out payment will be made following the expiration of
the Earn-Out Period.

AdColony is a leading mobile advertising platform servicing advertisers and
publishers. AdColony's proprietary video technologies and rich media formats are
widely viewed as a best-in-class technology delivering third-party verified
viewability rates for well-known global brands. With the addition of AdColony,
the Company expanded its collective experience, reach, and suite of capabilities
to benefit mobile advertisers and publishers around the globe. Performance-based
spending trends by large, established brand advertisers present material upside
opportunities for platforms with unique technology deployable across exclusive
access to inventory.

On August 27, 2021, the Company entered into an Amendment to Share Purchase
Agreement (the "Amendment Agreement") with AdColony and Otello Corporation ASA,
a Norway company ("Otello") and AdColony's previous parent company. Pursuant to
the Amendment Agreement, the Company and Otello agreed to set a fixed dollar
amount of $204,500 for the earn-out payment obligation, to set January 15, 2022,
as the payment due date for such payment amount, and to eliminate all of the
Company's earn-out support obligations under the Share Purchase Agreement. As a
result, the Company recognized an $8,913 reduction of the earn-out payment
obligation in change in fair value of contingent consideration on the
consolidated statement of operations and comprehensive income / (loss) for the
fiscal second quarter ended September 30, 2021.

The Company paid the cash consideration amounts that were due at closing and on
October 26, 2021, with a combination of available cash-on-hand and borrowings
under the Company's senior credit facility. The payment made on October 26,
2021, was reduced to $98,175 due to an adjustment for the impact of accrued and
unpaid taxes to the net working capital acquired. The difference between the
amount due of $100,000 and amount paid resulted in an adjustment to goodwill.

On January 15, 2022the Company paid the additional price on the acquisition of AdColony from $204,500 with cash on hand available and an extra $179,000
borrowings under the new credit agreement.


The Company recognized $4,214 of costs related to the AdColony Acquisition,
which were included in general and administrative expenses on the consolidated
statement of operations and comprehensive income / (loss) for the year ended
March 31, 2022.

Fyber N.V.: On May 25, 2021, the Company completed the initial closing of the
acquisition of at least 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") among 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") were (to the Company's
knowledge) widely 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 $600,000made up 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;
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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 ordinary shares of the Company with a value equal to
$198,678issued upon closing of the acquisition;

2.1,500,000 newly issued ordinary shares of the Company with a value equal to
$92,640published on June 17, 2021;

3.1,040,364 newly issued ordinary shares of the Company with a value equal to
$64,253published on July 16, 2021;


4.59,289 shares of common stock equal in value to $3,662, to be newly-issued
during the Company's 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 revenue (revenue 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 closing amount in cash on the closing date through a combination of cash on hand and borrowings under the Company’s senior credit facility.


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 March 31, 2022, the Company determined Fyber's net revenue for the
measurement period exceeded $100,000. As a result, the Company recorded a charge
of $50,000 to change in fair value of contingent consideration on the
consolidated statement of operations and comprehensive income / (loss) for the
fiscal year ended March 31, 2022, which was also recorded in acquisition
purchase price liabilities on the consolidated balance sheet as of March 31,
2022. The Company settled the obligation through the issuance of approximately
1,200,000 shares of the Company's common stock subsequent to its fiscal year
ended March 31, 2022.

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 fiscal year ended March
31, 2022, the Company purchased an additional $18,341 of Fyber's outstanding
shares, resulting in an ownership percentage of Fyber of approximately 99.5% as
of March 31, 2022. The Company expects to complete the purchase of the remaining
outstanding Fyber shares during fiscal year 2023.

The delisting of Fyber’s remaining outstanding shares from the Frankfurt Stock Exchange was completed on August 6, 2021.


The Company recognized $18,698 of costs related to the Fyber Acquisition, which
were included in general and administrative expenses on the consolidated
statement of operations and comprehensive income / (loss) for the year ended
March 31, 2022.
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Sector reports


Prior to the acquisitions of both 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
operates through the following three segments, each of which is a reportable
segment:

•On Device Media ("ODM") - This segment is the legacy single reporting segment
of Digital Turbine prior to the AdColony and Fyber acquisitions. This segment
generates revenue from products and services that simplify the discovery and
delivery of mobile apps and content media for device end-users. The Company
provides ODM solutions to all participants in the mobile application ecosystem
who 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. This segment's product offerings are enabled through
relationships with mobile device carriers and OEMs.

•In App Media - AdColony ("IAM-A") - The Company's In App Media - AdColony
("IAM-A") segment provides a platform that allows mobile app publishers and
developers to monetize their monthly active users via display, native, and video
advertising. The IAM-A platform allows demand side platforms ("DSPs"),
advertisers, agencies, and publishers to buy and sell digital ad impressions,
primarily through programmatic, real-time bidding auctions and, in some cases,
through direct-bought/sold advertiser budgets. IAM-A also provides brand and
performance advertising services to advertisers and agencies. IAM-A customers
are primarily DSPs, advertisers and agencies and relationships with app
publishers are a key success factor.

•In App Media - Fyber ("IAM-F") - The Company's In-App Media - Fyber ("IAM-F")
segment consists of products and services to enable agencies, brands, and app
developers to reach large audiences while achieving key performance indicators
ranging from reach to frequency, cost-per-install, and return on ad spend. These
campaigns are filled via in-house developed technologies and platforms
customized to reach a wide array of audiences globally while being compatible
with industry-recognized partners around measurement, data matching, and
creative services. IAM-F customers are primarily DSPs, advertisers and agencies
and relationships with app publishers are a key success factor.

Impact of COVID-19


Our results of operations are affected by economic conditions, including
macroeconomic conditions, levels of business confidence, and consumer
confidence. Due to the continued uncertainties associated with the COVID 19
pandemic, it is difficult to predict how our business and the demand for our
service offerings will be impacted. The extent to which COVID-19 impacts our
operational and financial performance will depend in part on actions taken by
governments, individuals and businesses, including carriers and OEMs in relation
to their sales of smartphones, tablets, and other devices, and application
developers and in-app advertisers in relation to demand for advertising. If
COVID-19 continues to have a significant negative impact on global economic
conditions over a prolonged period of time, our results of operations and
financial condition could be adversely impacted. Presently, we are conducting
business as usual, with some modifications to employee travel, employee work
locations, and cancellation of certain marketing events, among other
modifications. We will continue to actively monitor the situation and may take
further actions that alter our business operations, as required, or that we
determine are in the best interests of our employees, customers, partners,
suppliers, and stockholders. See the section titles "Item 1A. Risk Factors -
Public health issues, such as major epidemic or pandemic, could adversely affect
our business or financial results" for additional information.
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                             RESULTS OF OPERATIONS

The following presents the results of our operations for the year ended March

December 31, 2022, compared to the year ended March 31, 2021. For a discussion on the

results of our operations for the year ended March 31, 2021compared to the

year ended March 31, 2020see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K

for the year ended March 31, 2021filed with SECOND on June 10, 2021. References

to “Notes” are notes to our consolidated financial statements under “Item 8.

                 Financial Statements and Supplementary Data."
Net revenue ($ in thousands)

                                              Year ended March 31,
                                              2022            2021         % of Change
             Net revenue
             On Device Media              $   502,636      $ 313,579            60.3  %
             In App Media - AdColony          169,725              -        

100.0%

             In App Media - Fyber              92,611              -        

100.0%

             Elimination                      (17,376)             -        

(100.0)%

             Total net revenue            $   747,596      $ 313,579        

138.4%

Fiscal 2022 vs. Fiscal 2021


During the year ended March 31, 2022, net revenue increased by $434,017 or
138.4% compared to the prior year. The increase was due to a combination of
continuing organic growth of the Company's legacy business (now the On Device
Media segment) and contributions from recent acquisitions. When the Company
reports revenue on a net basis, net revenue from the transaction is reported net
of the license fees and revenue share expense associated with the transaction.
Approximately $139,241 of our net revenue for the year ended March 31, 2022, was
reported net of the associated license fees and revenue share expense.

On the device stand


The Company's ODM segment generates revenue from services that deliver mobile
application media or content media to end users. This segment is the legacy
reporting segment of Digital Turbine (previously called Media Distribution) and
its customers are mobile device carriers and OEMs as well as advertisers. During
the year ended March 31, 2022, ODM revenue increased by $189,057 or 60.3%
compared to the prior year. The increase was primarily due to increased demand
for our application media and content media distribution services, which led to
higher revenue per available placement, as well as increased revenue from
advertising partners as placement across existing commercial partners expanded,
distribution with new partners expanded, and new services and features were
deployed or expanded upon. Increase in application media distribution increased
$150,132 as compared to the prior year, while content media distribution
increased $38,925 as compared to the prior year.

In App Media – AdColony

The Company’s IAM-A segment includes operations from the acquisition of AdColony and generates revenue from its platform that enables demand-side platforms (“DSPs”), advertisers, agencies and publishers to buy and sell digital ad impressions, primarily through programming, real-time auctions, and in some cases through direct buy/sell advertiser budgets. IAM-A also provides brand and performance advertising services to advertisers and agencies. Total net income for the year ended March 31, 2022 has been $169,725.


Revenue for the IAM-A segment is reported on both a gross and net (revenue, net
of license fees and revenue share expense) basis. Revenue from its brand and
performance services are reported on a gross basis as the Company acts as a
principal in the transaction and generated net revenue of $123,094 for the year
ended March 31, 2022. Revenue reported on a net basis are primarily related to
the segment's platform that enables programmatic, real-time bidding for ad
impressions as the Company acts as an agent in the transactions and had net
revenue of $46,631 for the year ended March 31, 2022. Please see Note 3,
"Acquisitions," for further information.
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In App Media – Fyber


The Company's IAM-F segment provides a platform that allows mobile app
publishers and developers to monetize their monthly active users via display,
native, and video advertising. The IAM-F platform allows demand side platforms
("DSPs"), advertisers, agencies, and publishers to buy and sell digital ad
impressions, primarily through programmatic, real-time bidding auctions and, in
some cases, through direct-bought/sold advertiser budgets. The IAM-F segment is
comprised of the Fyber Acquisition and, reports revenue on a net (revenue, net
of license fees and revenue share expense) basis as the Company acts as an agent
in the transactions. Net revenue for the year ended March 31, 2022,were $92,611
Please see Note 3, "Acquisitions," for further information.

Operating revenue and expense costs (thousands of dollars)


                                                         Year ended March 

31,

                                                         2022            

2021 % change

Revenue costs and operating expenses

  License fees and revenue share                     $   370,648      $ 178,649           107.5  %
  Other direct costs of revenue                           29,838          2,358         1,165.4  %
  Product development                                     52,723         20,119           162.1  %
  Sales and marketing                                     63,309         19,304           228.0  %
  General and administrative                             138,837         33,940           309.1  %

Total operating revenue and expense costs $655,355 $254,370

           157.6  %


Fiscal 2022 vs. Fiscal 2021


For the year ended March 31, 2022, total costs of revenue and operating expenses
increased by $400,985 compared to the year ended March 31, 2021. The increase in
total costs of revenue and operating expenses was a result of continuing organic
growth and the acquisitions of Appreciate, AdColony, and Fyber. Costs of revenue
and operating expenses included transaction costs of $26,237 for the year ended
March 31, 2022, compared to $3,413 for the year ended March 31, 2021.

License fees and revenue sharing


License fees and revenue share include amounts paid to our carrier and OEM
partners, as well as app publishers and developers who drive the revenue
generated from advertising via direct cost-per-thousand ("CPM"),
cost-per-install (CPI), cost-per-placement ("CPP"), or cost-per-acquisition
("CPA") arrangements, and are recorded as a cost of revenue. In addition, when
indirect arrangements exist through advertising aggregators (ad networks) and
revenue is shared with our carrier and app development partners, the shared
revenue is also recorded as a cost of revenue.

License fees and revenue share increased by $191,999 to $370,648 for the year
ended March 31, 2022, and was 49.6% as a percentage of total net revenue
compared to $178,649, or 57.0% of total net revenue, for the year ended March
31, 2021.

The increase in license fees and revenue share was attributable to the increase
in total net revenue over the same period as these costs are paid as a
percentage of our revenue. The decrease in license fees and revenue share as a
percentage of total net revenue was primarily due to our recent acquisitions,
which report revenue on a net basis for certain product lines.

Other direct revenue costs

Other direct revenue costs primarily include hosting expenses directly related to revenue generation and amortization expense recognized under ASC 985-20, Costs of Computer Software for Sale, Lease, or Otherwise Commercialization.


Other direct costs of revenue increased to $29,838 for the year ended March 31,
2022, and was 4.0% as a percentage of total net revenue compared to $2,358, or
0.8% of total net revenue, for the year ended March 31, 2021.

The increase in other direct costs of revenue for the year ended March 31, 2022,
compared to the prior year, was primarily driven by our recent acquisitions and
continued growth for the legacy On Device Media segment, both of which
contributed to significant increases in hosting costs.
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Product development

Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of personnel.


Product development expenses increased by $32,604 to $52,723 for the year ended
March 31, 2022, and was 7.1% as a percentage of total net revenue compared to
$20,119, or 6.4% of total net revenue, for the year ended March 31, 2021. For
the years ended March 31, 2022 and 2021, product development expenses included
acquisition-related costs of $2,699 and $92, respectively. Excluding
acquisition-related costs, product development expenses as a percentage of total
net revenue was relatively consistent, increasing to 6.7% for the fiscal year
ended March 31, 2022, from 6.4% for fiscal year ended and March 31, 2021.

The increase in product development expenses for the year ended March 31, 2022,
compared to the prior year, was primarily attributable to higher product
development headcount, both organically and through our recent acquisitions, and
incremental third-party development costs due to increased development
activities to support revenue growth.

Sales and Marketing

Sales and marketing expenses represent the costs of sales and marketing personnel, advertising and marketing campaigns and campaign management.


Sales and marketing expenses increased by $44,005 to $63,309 for the year ended
March 31, 2022, and was 8.5% as a percentage of total net revenue compared to
$19,304, or 6.2% of total net revenue, for the year ended March 31, 2021. For
the year ended March 31, 2022, sales and marketing expenses included $512 of
acquisition-related costs. Excluding acquisition-related costs, sales and
marketing expenses as a percentage of total net revenue was 8.4% for the year
ended March 31, 2022.

The increase in sales and marketing expenses for the year ended March 31, 2022,
compared to the prior year, was primarily due to our recent acquisitions and
additional headcount in existing markets to support the Company's continued
expansion of its global footprint. The increase in sales and marketing expenses
as a percentage of total net revenue was primarily due to higher-leverage sales
and marketing resources, advertising and marketing campaigns, and campaign
management as total net revenue grew at a higher rate.

general and administrative


General and administrative expenses represent management, finance, and support
personnel costs in both the parent and subsidiary companies, which include
professional services and consulting costs, in addition to other costs such as
rent, stock-based compensation, and depreciation and amortization expense.

General and administrative expenses increased by $104,897 to $138,837 for the
year ended March 31, 2022, and was 18.6% as a percentage of total net revenue
compared to $33,940, or 10.8% of total net revenue, for the year ended March 31,
2021. For the years ended March 31, 2022 and 2021, general and administrative
expenses included acquisition-related costs of $23,026 and $3,321, respectively.
Excluding acquisition-related costs, general and administrative expenses as a
percentage of total net revenue was 15.5% and 9.8% for the fiscal years ended
March 31, 2022 and 2021, respectively.

The increase in general and administrative expenses for the year ended March 31,
2022, compared to the prior year, was primarily due to the recent acquisitions
of AdColony and Fyber. In addition, general and administrative expenses
increased due to higher employee-related expenses, including stock-based
compensation, primarily from higher headcount to support the Company's growth,
higher professional service costs, and an increase in amortization of intangible
assets and depreciation for capitalized internal-use software due to the recent
acquisitions.
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Interest and other income / (expenses), net (in thousands of dollars)


                                                          Year ended March 

31,

                                                          2022            2021         % of Change
Interest and other income / (expense), net
Change in fair value of contingent consideration      $   (41,087)     $ (15,751)         (160.9) %
Interest expense, net                                      (8,495)        (1,003)         (747.0) %
Loss on extinguishment of debt                                  -           (452)          100.0  %
Foreign exchange transaction gain                           2,062              -           100.0  %
Other income / (expense), net                                (749)          

(146) (413.0)% Total interest and other income / (expense), net ($48,269) ($17,352) (178.2)%

Fiscal 2022 vs. Fiscal 2021


Total interest and other income / (expense), net, for the years ended March 31,
2022 and 2021, was approximately $48,269 and $17,352, respectively, an increase
in net expense of $30,917.

Change in fair value of contingent consideration


For the years ended March 31, 2022 and 2021, the Company recorded charges for
changes in fair value of contingent consideration of $41,087 and $15,751,
respectively. The change in fair value of contingent consideration for the
fiscal year ended March 31, 2022, was due to a charge of $50,000 for the
increase in the fair value of the Fyber earn-out, offset by reduction in the
fair value of the AdColony earn-out of $8,913. The change in fair value of
contingent consideration for the fiscal year ended March 31, 2021 related to the
Mobile Posse acquisition.

Interest income / (expense), net


For the years ended March 31, 2022 and 2021, the Company recorded net interest
expense of $8,495 and $1,003, respectively, an increase of $7,492 or 747.0%. The
increase was primarily due to borrowings under the New Credit Agreement with BoA
and interest on the loans we assumed through our acquisition of Fyber. The
increase in borrowings was primarily due to the recently completed acquisitions.
Interest expense also includes the amortization of debt issuance costs related
to our New Credit Agreement.

Gain on foreign exchange transaction


The foreign exchange transaction gain of $2,062 was primarily attributable to
fluctuations in foreign exchange rates for trade accounts receivables and
payables denominated in currencies other than the functional currency of foreign
entities.

Cash and capital resources


Our primary sources of liquidity are cash from operations and debt. As of March
31, 2022, we had cash in total of approximately $127,162 and $866 available to
draw under the New Credit Agreement with BoA. The maturity date of the New
Credit Agreement is April 29, 2026, and the outstanding balance of $524,134 is
classified as long-term debt, net of debt issuance costs of $3,349, on our
consolidated balance sheet as of March 31, 2022.

Our ability to meet our debt service obligations and to fund working capital,
capital expenditures, and investments in our business will depend upon our
future performance, which will be subject to financial, business, and other
factors affecting our operations, many of which are beyond our control,
availability of borrowing capacity under our credit facility, and our ability to
access the capital markets. For example, these factors could include general and
regional economic, financial, competitive, legislative, regulatory, and other
factors. We cannot ensure that we will generate cash flow from operations, or
that future borrowings or the capital markets will be available, in an amount
sufficient to enable us to pay our debt or to fund our other liquidity needs. We
could face substantial liquidity problems and could be forced to reduce or delay
investments and capital expenditures or to dispose of material assets or
operations, seek additional indebtedness or equity capital, or restructure or
refinance our indebtedness. We may not be able to effect any such alternative
measures on commercially reasonable terms or at all and, even if successful,
those alternative actions may not allow us to meet our scheduled debt service
obligations.
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The Company believes it will generate sufficient cash flow from operations and
has the liquidity and capital resources to meet its business requirements for at
least twelve months from the filing date of this Annual Report on Form 10-K.

Outstanding guaranteed debt


The Company's outstanding secured indebtedness under the New Credit Agreement is
$524,134 as of March 31, 2022. See "Recent Developments - Credit Agreement" for
additional information on the New Credit Agreement. The Company's ability to
borrow additional amounts under its New Credit Agreement could have significant
negative consequences, including:

•increasing the Company's vulnerability to general adverse economic and industry
conditions;
•limiting the Company's ability to obtain additional financing;
•violating a financial covenant, potentially resulting in the indebtedness to be
paid back immediately and thus negatively impacting our liquidity;
•requiring additional financial covenant measurement consents or default waivers
without enhanced financial performance in the short term;
•requiring the use of a substantial portion of any cash flow from operations to
service indebtedness, thereby reducing the amount of cash flow available for
other purposes, including capital expenditures;
•limiting the Company's flexibility in planning for, or reacting to, changes in
the Company's business and the industry in which it competes, including by
virtue of the requirement that the Company remain in compliance with certain
negative operating covenants included in the credit arrangements under which the
Company will be obligated as well as meeting certain reporting requirements; and
•placing the Company at a possible competitive disadvantage to less leveraged
competitors that are larger and may have better access to capital resources.

Our credit facility also contains a maximum consolidated secured net leverage
ratio and minimum consolidated interest coverage ratio. There can be no
assurance we will continue to satisfy these ratio covenants. If we fail to
satisfy these covenants, the lender may declare a default, which could lead to
acceleration of the debt maturity. Any such default would have a material
adverse effect on the Company.

The collateral pledged to secure our secured debt, consisting of substantially
all of our and our U.S. subsidiaries' assets, would be available to the secured
creditor in a foreclosure, in addition to many other remedies. Accordingly, any
adverse change in our ability to service our secured debt could result in an
event of default, cross default, and foreclosure or forced sale. Depending on
the value of the assets, there could be little, if any, assets available for
common stockholders in any foreclosure or forced sale.

Debt supported by acquisition of Fyber


As a part of the Fyber Acquisition, the Company assumed $25,789 of debt
previously held by Fyber. This debt was comprised of amounts drawn against three
separate revolving lines of credit. The Company settled two of the three
revolving lines of credit, resulting in payments of $13,289, during the year
ended March 31, 2022. Details for the remaining line of credit can be found in
Note 9, "Debt," of the consolidated financial statements. The remaining
revolving line of credit from Bank Leumi matures on June 15, 2022. The balance
of $12,500 on this line of credit is classified as short-term debt on the
consolidated balance sheet as of March 31, 2022.

Acquisition Purchase Price Liability


The Company recognized an acquisition purchase price liability of $50,000 on its
consolidated balance sheet as of March 31, 2022, for the contingent earn-out
consideration for the Fyber Acquisition. The Company settled the obligation
through the issuance of approximately 1,200,000 shares of the Company's common
stock subsequent to its fiscal year ended March 31, 2022.

Hosting agreements


The Company enters into hosting agreements with service providers and in some
cases, those agreements include minimum commitments that require the Company to
purchase a minimum amount of service over a specified time period ("the minimum
commitment period"). The minimum commitment period is generally one-year in
duration and the hosting agreements include multiple minimum commitment periods.
Our minimum purchase commitments under these hosting agreements total
approximately $212,572 over the next five years.
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Summary of cash flows (in thousands of dollars)

                                                                    Year ended March 31,
                                                                   2022                2021               % of Change
                                                                       (in thousands)
Consolidated statements of cash flows data:
Net cash provided by operating activities                     $    84,738          $  62,795                       34.9  %
Business acquisitions, net of cash acquired                      (148,722)           (28,604)                    (419.9) %
Capital expenditures                                              (23,280)            (9,204)                    (152.9) %
Net cash used in investing activities                            (172,002)           (37,808)                    (354.9) %
Payment of contingent consideration                                     -            (16,956)                     100.0  %
Proceeds from borrowings                                          549,060             15,000                    3,560.4  %
Payment of debt issuance costs                                     (4,064)              (469)                    (766.5) %
Payment of deferred business acquisition consideration           (302,676)                 -                     (100.0) %
Options and warrants exercised                                      4,300              7,209                      (40.4) %

Payment of withholding taxes for the net in-equity settlement of equity awards

                                                   (8,605)                 -                     (100.0) %
Repayment of debt obligations                                     (52,772)           (20,000)                    (163.9) %

Net cash provided by / (used in) financing activities $185,243

       $ (15,216)                   1,317.4  %


Operating Activities

Cash provided by operating activities was $84,738 for the year ended March 31,
2022, compared to $62,795 for the year ended March 31, 2021. The increase of
$21,943 was due to the following:

• Increase of $117,428 due to higher non-cash charges primarily for depreciation and amortization, change in fair value of contingent consideration and stock-based compensation expense. These increases are mainly due to the impact of the AdColony and Fyber’s acquisitions on post-acquisition operating activities; partially offset by


•$76,170 decrease for changes in operating assets and liabilities, primarily due
to higher net working capital to support the Company's growth, and the payout of
compensation related to the AdColony and Fyber acquisitions and the Company's
annual incentive plan; and a

•Decrease of $19,315 in net earnings.

Investing activities


For the year ended March 31, 2022, net cash used in investing activities was
approximately $172,002, comprised of cash expenditures for business
acquisitions, net of cash acquired, of $148,722 and capital expenditures related
mostly to internally-developed software of $23,280. For the year ended March 31,
2021, net cash used in investing activities was approximately $37,808, comprised
of cash expenditures for business acquisitions, net of cash acquired, of $28,604
and capital expenditures related mostly to internally-developed software of
$9,204. The $120,118 increase in cash expenditures for business acquisitions was
due to our acquisitions of AdColony and Fyber during the year ended March 31,
2022, as compared to our acquisition of Mobile Posse, Inc., during the year
ended March 31, 2021. The $14,076 increase in capital expenditures was due to a
combination of continued investments in product development for our legacy ODM
business as well as development activities at our AdColony and Fyber
Acquisitions.

Fundraising activities


For the year ended March 31, 2022, net cash provided by financing activities was
approximately $185,243, comprised of proceeds from borrowings of $549,060
primarily used for the acquisitions of AdColony and Fyber, and options exercised
of $4,300, partially offset by payment of deferred business acquisition
consideration of $302,676, repayment of debt obligations of $52,772, payment of
withholding taxes for net share settlement of equity awards of $8,605, and
payment of debt issuance costs of $4,064. For the year ended March 31, 2021, net
cash used in financing activities was approximately $15,216, comprised of
payment of contingent consideration of $16,956 related to the Mobile Posse
acquisition and repayment of debt obligations of $20,000, offset by proceeds
from borrowings of $15,000 and proceeds from the exercise of stock options of
$7,209.
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Significant Accounting Policies and Estimates


The discussion and analysis of our financial condition and results of operations
are based on our financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles ("GAAP"). The preparation of
these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenue, expenses, and
related disclosures of contingent assets and liabilities. On an ongoing basis,
we evaluate our estimates, including those related to contingencies, litigation,
and goodwill and intangible assets acquired from our acquisitions. We base our
estimates on historical experience and on various other assumptions that we
believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

We believe that the following critical accounting policies affect our most significant judgments and estimates used in the preparation of our financial statements.


Revenue Recognition

We generate revenue from transactions for the purchase and sale of digital
advertising inventory through our various platforms and service offerings.
Generally, our revenue is based on a percentage of the ad spend through our
platforms, although for certain service offerings, we receive a fixed
cost-per-thousand ("CPM") or cost-per-install ("CPI") for ad impressions sold or
app installs completed. We recognize revenue upon fulfillment of our performance
obligation to our customers, which generally occurs at the point in time when an
ad is rendered or an end consumer action, such as an app install, is completed.

ODM – Carriers and OEMs


We enter contracts with carriers and OEMs for our ODM segment to help the
customer control, manage, and monetize the mobile device through the marketing
of application slots or advertisement space/inventory to advertisers and
delivering the applications or advertisements to the mobile device. The Company
generally offers these services under a revenue share model or, to a lesser
extent, a customer contract per-device license fee model for a two-to-four-year
software as a service ("SaaS") license agreement. These agreements typically
include the following services: the access to a SaaS platform, hosting, solution
features, and general support and maintenance. The Company has concluded that
each promised service is delivered concurrently, interdependently, and
continuously with all other promised services over the contract term and, as
such, has concluded these promises are a single performance obligation that is
delivered to the customer over a series of distinct service periods over the
contract term. The Company meets the criteria for overtime recognition because
the customer simultaneously receives and consumes the benefits provided by the
Company's performance as the Company performs, and the same method would be used
to measure progress over each distinct service period. The fees for such
services are not known at contract inception but are measurable during each
distinct service period. The Company's contracts do not include advance
non-refundable fees. The Company's fees for these services are based upon a
revenue-share arrangement with the carrier or OEM. Both parties have agreed to
share the revenue earned from third-party advertisers, discussed below, for
these services.

ODM – Third Party Advertisers


The Company generally offers these services through cost-per-install ("CPI"),
cost-per-placement ("CPP"), and/or cost-per-action ("CPA") arrangements with
third-party advertisers, developers, agencies, and advertising aggregators,
generally in the form of insertion orders. The insertion orders specify the type
of arrangement and additional terms such as advertising campaign budgets and
timelines as well as any constraints on advertising types. These customer
contracts can be open ended with regard to length of time and can renew
automatically unless terminated; however, specific advertising campaigns are
generally short-term in nature. These agreements typically include the delivery
of applications to home screens of mobile devices. Access to inventory of
application slots is allocated by carriers or OEMs in the contracts identified
above. The Company controls these application slots and markets it on behalf of
the carriers and OEMs to the advertisers. The Company has concluded that the
performance obligation within the contract is complete upon delivery of the
application to the device. Revenue recognition related to CPI and CPA
arrangements is dependent upon an action of the end user. As a result, the
transaction price is variable and is fully constrained until an install or
action occurs.
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ODM- Programmatic Advertising and targeted media outreach


The Company generally offers these services under CPM impression arrangements
and page-view arrangements. Through its mobile phone first screen applications
and mobile web portals, the Company markets ad space/inventory within its
content products for display advertising. The ad space/inventory is allocated to
the Company through arrangement with the carrier or OEM in the contracts
discussed above. The Company controls this ad space/inventory and markets it on
behalf of the carriers and OEMs to the advertisers. The Company's advertising
customers can bid on each individual display ad and the highest bid wins the
right to fill each ad impression. Advertising agencies acting on the behalf of
advertisers bid on the ad placement via the Company's advertising exchange
customers. When the bid is won, the ad will be received and placed on the mobile
device by the Company. The entire process happens almost instantaneously and on
a continuous basis. The advertising exchanges bill and collect from the winning
bidders and provide daily and monthly reports of the activity to the Company.
The Company has concluded that the performance obligation is satisfied at the
point in time upon delivery of the advertisement to the device based on the
impressions or page-view arrangement, as defined in the contract.

Through its mobile phone first screen applications and mobile web portals, the
Company's software platform also recommends sponsored content to mobile phone
users and drives web traffic to a customer's website. The Company markets this
content to content sponsors, such as Outbrain or Taboola, similarly to the
marketing of ad space/inventory. This sponsored content takes the form of
articles, graphics, pictures, and similar content. The Company has concluded
that the performance obligation within the contract is complete upon delivery of
the content to the mobile device.

IAM-A and IAM-F – Marketplace


The Company, through its IAM-A and IAM-F segments, provides platforms that allow
demand-side platforms ("DSPs") and publishers to buy and sell ad inventory,
respectively, in a programmatic, real-time bidding ("RTB") auction. The Company
generally contracts with DSPs through an RTB Ad Exchange Agreement ("Exchange
Agreement"). It also separately contracts with publishers through an advertising
insertion order or service order to provide access to its auction platform and
the ad inventory available through the platform. The auction is held when ad
inventory becomes available. The Company will send bid requests to various DSPs,
which may choose to bid on the available ad inventory. Once a DSP wins an
auction, it must deliver an ad, which is generally served through the Company's
software development kits ("SDK"). The entire auction process is nearly
instantaneous. The Company bills the DSPs based on the total number of
impressions and the bid price. It then remits the payment to the publishers, net
of a revenue share agreed with the publisher that is generally a percentage of
the DSPs' total spending with the publisher through the platform.

IAM-A – Brand and performance


The Company, through its IAM-A segment for its Brand and Performance offerings,
contracts directly with advertisers or agencies. through insertion orders, that
require the Company to fulfill advertising campaigns by identifying and
purchasing targeted ad inventory and serving ads on behalf of the advertiser.
The insertion orders or addendum communications provide advertising campaign
details, such as campaign start and end date, target demographics, maximum
budget, and rate. Rates are generally based on an end user action (CPI) or on a
CPM basis. Revenue is recognized based on the rate and the number of impressions
or end user actions at the time the ad is rendered, or when the end user action
is completed.

Principal vs Agent Reporting

The determination of whether we act as a principal or as an agent in a
transaction requires significant judgement and is based on our assessment of the
terms of customer arrangements and the relevant accounting guidance. When we are
the principal in a transaction, revenue is reported on a gross basis, which is
the amount billed to DSPs, advertisers, and agencies. When we are an agent in a
transaction, revenue is reported net of license fees and revenue share paid to
app publishers or developers.
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The Company has determined that it is a principal for its advertiser services
for application management and programmatic advertising and targeted media
delivery when it controls the application slots or ad space/inventory. This is
because it has been allocated such slots or space from the carrier or OEM and is
responsible for marketing or monetizing the slots or space. The advertisers look
to the Company to acquire such slots or space, and the Company's software is
used to deliver the applications, ads or content to the mobile device. The
Company also may manage application or ad campaigns of advertisers associated
with these services. If the applications or advertisements are not delivered to
the mobile device or the Company doesn't comply with certain policies of the
advertiser, the Company would be responsible and would have to indemnify the
customer for these issues. The Company also has discretion in setting the price
of the slots or space based on market conditions, collects the transaction
prices, and remits the revenue-share percentage of the transaction price to the
carrier or OEM.

The Company recognizes the transaction price received from advertisers, content
providers, or websites gross and the carrier or OEM share of such transaction
price as costs of revenue - license fees and revenue share - in the accompanying
consolidated statements of operations and comprehensive income / (loss).

The carrier or OEM may have the right to market and sell application slots or ad
space to advertisers using the Company's software. The carrier or OEM will share
revenue with the Company when it does so. The Company recognizes the revenue
shared by the carrier or OEM on a net basis as the Company is not considered the
primary obligor in these transactions.

The Company has determined that it is a principal for its Brand and Performance
offerings as the advertisers or agencies provide parameters for their target
audiences, as well as a budget for ad campaigns. Once an advertiser or
advertising agency provides its specifications, the Company has the discretion
to fulfill the campaign by utilizing its data and proprietary technology. The
Company controls the service because it has the ultimate discretion in
purchasing ad inventory; and once an ad inventory slot is purchased, filling
that ad inventory slot. As a result, the Company reports the revenue billed to
advertisers and agencies on a gross basis and revenue shares paid to publishers
as license fees and revenue share.

The Company has determined that it is an agent in transactions on its
Marketplace platforms. The Company acts as an intermediary between DSPs and
publishers by providing access to a platform and the SDKs that allow both
parties to transact in the buying and selling of ad inventory. The transaction
price is determined through a real-time auction and the Company has no pricing
discretion or obligation related to the fulfillment of the advertising delivery.

Software development costs


The Company applies the principles of FASB ASC 985-20, Accounting for the Costs
of Computer Software to Be Sold, Leased, or Otherwise Marketed ("ASC 985-20").
ASC 985-20 requires that software development costs incurred in conjunction with
product development be charged to research and development expense until
technological feasibility is established. Thereafter, until the product is
released for sale, software development costs must be capitalized and reported
at the lower of the unamortized cost or net realizable value of the related
product. At this time, we do not invest significant capital into the research
and development phase of new products and features as the technological
feasibility aspect of our platform products has either already been met or is
met very quickly.

The Company has adopted the "tested working model" approach to establish
technological feasibility for its products. Under this approach, the Company
does not consider a product in development to have passed the technological
feasibility milestone until the Company has completed a model of the product
that contains essentially all the functionality and features of the final
product and has tested the model to ensure that it works as expected.

The Company considers the following factors in determining whether costs can be
capitalized: the emerging nature of the mobile market; the gradual evolution of
the wireless carrier platforms and devices for which it develops products; the
lack of pre-orders or sales history for its products; the uncertainty regarding
a product's revenue-generating potential; its lack of control over the carrier
distribution channel resulting in uncertainty as to when, if ever, a product
will be available for sale; and its historical practice of canceling products at
any stage of the development process.

After products and features are released, all product maintenance costs are expensed.


The Company also applies the principles of FASB ASC 350-40, Accounting for the
Cost of Computer Software Developed or Obtained for Internal Use ("ASC 350-40").
ASC 350-40 requires that software development costs incurred before the
preliminary project stage be expensed as incurred. We capitalize development
costs related to these software applications once the preliminary project stage
is complete and it is probable that the project will be completed, and the
software will be used to perform the functions intended.
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Income taxes


The Company accounts for income taxes in accordance with FASB ASC 740-10,
Accounting for Income Taxes ("ASC 740-10"), which requires recognition of
deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in its financial statements or tax returns. Under
ASC 740-10, the Company determines deferred tax assets and liabilities for
temporary differences between the financial reporting basis and the tax basis of
assets and liabilities, along with net operating losses, if it is more likely
than not the tax benefits will be realized using the enacted tax rates in effect
for the year in which it expects the differences to reverse. To the extent a
deferred tax asset cannot be recognized, a valuation allowance is established,
if necessary.

The Company is required to evaluate its ability to realize its deferred tax
assets using all available evidence, both positive and negative, and determine
if a valuation allowance is needed. Further, ASC 740-10-30-18 outlines the four
possible sources of taxable income that may be available to realize a tax
benefit for deductible temporary differences and carry-forwards. The sources of
taxable income are listed below from least to most subjective:

•Future reversals of existing taxable temporary differences
•Future taxable income exclusive of reversing temporary differences and
carryforwards
•Taxable income in prior carryback year(s) if carryback is permitted under the
tax law
•Tax-planning strategies that would, if necessary, be implemented to, for
example:
•Accelerate taxable amounts to utilize expiring carryforwards
•Change the character of taxable or deductible amounts from ordinary income or
loss to capital gain or loss
•Switch from tax-exempt to taxable investments

ASC 740-10 prescribes that a company should use a more-likely-than-not
recognition threshold based on the technical merits of the tax position taken.
Tax positions that meet the more-likely-than-not recognition threshold should be
measured as the largest amount of the tax benefits, determined on a cumulative
probability basis, which is more likely than not to be realized upon ultimate
settlement in the financial statements. We recognize interest and penalties
related to income tax matters as a component of the provision for income taxes.

The Company's income is subject to taxation in both the United States and
foreign jurisdictions. Significant judgment is required in evaluating the
Company's tax positions and determining its provision for income taxes. The
Company establishes reserves for income tax-related uncertainties based on
estimates of whether, and the extent to which, additional taxes will be due.
These reserves for tax contingencies are established when the Company believes
that positions do not meet the more-likely-than-not recognition threshold. The
Company adjusts uncertain tax liabilities in light of changing facts and
circumstances, such as the outcome of a tax audit or lapse of a statute of
limitations. The provision for income taxes includes the impact of uncertain tax
liabilities and changes in liabilities that are considered appropriate.

Stock-based compensation

We have applied FASB ASC 718, Share-Based Payment (“ASC 718”) and therefore recognize stock-based compensation expense for all of our stock-based awards.


Under ASC 718, we estimate the fair value of stock options granted using the
Black-Scholes model. The fair value for awards that are expected to vest is
amortized on a straight-line basis over the requisite service period of the
award, which is generally the option vesting term. The amount of expense
recognized represents the expense associated with the stock options we expect to
vest, based on an estimated rate of forfeitures. This rate of forfeitures is
updated, as necessary, and any adjustments needed to recognize the fair value of
options that vest or are forfeited are recorded.

The Black-Scholes model, used to estimate the fair value of an award, requires
the input of subjective assumptions, including the expected volatility of our
common stock, interest rates, dividend rates, and an option's expected life. As
a result, the financial statements include amounts that are based on our best
estimates and judgments for the expenses recognized for stock-based
compensation.

The Company grants restricted stock units ("RSUs") subject to performance
conditions that vest based on the satisfaction of the conditions of the award.
The fair value of performance-based awards is determined using the market
closing price on the grant date as well as the Company's judgment of likely
future performance, which impacts the total number of RSUs that will be issued
to the employees.
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Business combinations


We allocate the fair value of purchase consideration to the tangible assets
acquired, liabilities assumed, and intangible assets acquired based on their
estimated fair values. The excess of the fair value of purchase consideration
over the fair values of these identifiable assets and liabilities is recorded as
goodwill. Such valuations require management to make significant estimates and
assumptions, especially with respect to intangible assets. Significant estimates
in valuing certain intangible assets include, but are not limited to, estimated
replacement costs and future expected cash flows from acquired users, acquired
technology, acquired patents, and acquired trade names from a market participant
perspective. Management's estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain and unpredictable
and, as a result, actual results may differ from estimates. Allocation of
purchase consideration to identifiable assets and liabilities affects Company
amortization expense, as acquired finite-lived intangible assets are amortized
over the useful life, whereas any indefinite lived intangible assets, including
goodwill, are not amortized. During the measurement period, which is not to
exceed one year from the acquisition date, we may record adjustments to the
assets acquired and liabilities assumed, with the corresponding offset to
goodwill. Upon the conclusion of the measurement period, any subsequent
adjustments are recorded to earnings.

Good will and indefinite life intangible assets


Goodwill represents the excess of acquisition cost over fair value of net assets
of businesses acquired. In accordance with FASB ASC 350-20, Goodwill and Other
Intangible Assets, the values assigned to goodwill and indefinite-lived
intangible assets are not amortized to expense, but rather they are evaluated,
at least on an annual basis, to determine if there are potential impairments.

For goodwill and indefinite-lived intangible assets, we complete what is
referred to as the "Step 0" analysis, which involves evaluating qualitative
factors including macroeconomic conditions, industry and market considerations,
cost factors, and overall financial performance. If our "Step 0" analysis
indicates it is more likely than not the fair value is less than the carrying
amount, we would perform a quantitative two-step impairment test.

The quantitative analysis compares the fair value of our reporting unit or
indefinite-lived intangible assets to their carrying amounts and an impairment
loss is recognized equivalent to the excess of the carrying amount over the fair
value. Fair value is determined based on discounted cash flows, market
multiples, or appraised values, as appropriate. Discounted cash flow analysis
requires assumptions about the timing and amount of future cash inflows and
outflows, risk, the cost of capital, and terminal values. Each of these factors
can significantly affect the value of the intangible asset. The estimates of
future cash flows, based on reasonable and supportable assumptions and
projections, require management's judgment.

Any changes in key assumptions about the Company's businesses and their
prospects, or changes in market conditions, could result in an impairment
charge. Some of the more significant estimates and assumptions inherent in the
intangible asset valuation process include: the timing and amount of projected
future cash flows; the discount rate selected to measure the risks inherent in
the future cash flows; and the assessment of the asset's life cycle and the
competitive trends impacting the asset, including consideration of any
technical, legal or regulatory trends.

In the years ended March 31, 2022 and 2021, the Company determined there were no
indicators of impairment of goodwill. See Note 5, "Goodwill and Intangible
Assets," to the Company's consolidated financial statements in Part II, Item 8
of this Annual Report on Form 10-K. In performing the related valuation
analyses, the Company used various valuation methodologies including
probability-weighted discounted cash flows, comparable transaction analysis, and
market capitalization and comparable company multiple comparison.

Recently issued accounting pronouncements


Recent accounting pronouncements are detailed in Note 2, "Basis of Presentation
and Summary of Significant Accounting Policies," to our consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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