Risk Factors Update Summary

• ASU 2023-07 is effective for the annual period beginning on January 1, 2024 and interim periods beginning on January 1, 2025. Early adoption is permitted.
• Added a detailed policy for the Recovery of Erroneously Awarded Compensation, effective October 2, 2023.
• Increased limitations on visas for international students may impact our operations and liquidity.
• Acquired intangible assets increased by $35.6 million from 2022 to 2023, totaling $108.2 million.
• Business combinations with StudyLink and Cohort Go were described, including total purchase consideration and contingent consideration details.
• The company acquired StudyLink for an estimated total aggregate purchase price of approximately $35.5 million.
• General and administrative costs increased significantly from $32 million to $107 million.
• Revenue increased by $88 million from 2022 to 2023, reaching $403.1 million, a 43.9% growth.
• Professional fees increased significantly from $3.4 million to $5.7 million, a change of $2.3 million or 67.6%.
• The Company raised $260.1 million through a Follow-On Public Offering, selling 8 million shares at $32.00 per share.
• ASU 2023-09 requires additional disclosure on income taxes, effective for the annual period beginning on January 1, 2025.
• Change in borrowing terminology from "ABR borrowings" to "loans" and "Eurodollar Term SOFR borrowings" to "Borrowings." This change affects the interest rates applied to borrowings.
• The Company incurred $0.6 million in transaction costs in 2021, a significant increase from $0.3 million in 2020.
• Defined terms like "Clawback Eligible Incentive Compensation" and "Erroneously Awarded Compensation" for clarity.
• General and administrative costs rose from $4.3 million to $5.7 million, an increase of $1.4 million or 32.6%.
• Total costs and operating expenses rose from $147 million to $424 million.
• The company completed a follow-on offering, receiving $260.1 million in net proceeds from the sale of 8,000,000 shares of common stock.
• Allowance for credit losses changes were detailed, including provisions, write-offs, and ending balances.
• Net losses increased from $39.3 million in 2022 to $8.6 million in 2023.
• Total payment volume surged by approximately 33% to over $24 billion during 2023.
• Interest expense decreased from $2.5 million to $1.2 million, a reduction of $1.3 million or 52%.
• Adjustment in the applicable rate based on liquidity and net leverage ratio, now ranging from 0.75% to 2.25%, impacting interest costs.
• Loss from operations decreased from $21.5 million to $4.4 million.
• Selling and marketing expenses rose by $29.1 million, a 37.1% increase, driven by various factors.
• Revenue growth challenges due to volatility in banking sectors and reliance on limited partners.
• Stock-based compensation expense increased by $12.7 million from 2022 to 2023, totaling $43.7 million.
• The Company executed the First Amendment to the Revolving Credit Facility, transitioning from the LIBOR to the SOFR benchmark rate.
• Revenue disaggregated by geographical area and major solutions was updated, with significant changes in revenue values.
• Contract costs and capitalized sales incentives were updated, with changes in amounts capitalized and amortized.
• Goodwill related to acquisitions increased by $4.5 million from 2021 to 2022, reaching $121.6 million.
• Outlined the Committee's authority to determine and recover Erroneously Awarded Compensation from Executive Officers.
• The company's total payment volume increased by approximately 33% from $18.1 billion in 2022 to $24.0 billion in 2023.
• Changes in deferred revenue recognition were noted, with revenue recognized from amounts included in deferred revenue.
• Interest income increased from $3.2 million to $13.3 million.
• The company's annual net dollar-based retention rate decreased from approximately 140% in 2022 to approximately 125% in 2023.
• Cash and cash equivalents increased from $349.2 million to $654.6 million, a rise of $305.4 million.
• Technology and development expenses increased by $19 million, a 60.7% rise, due to personnel and other costs.
• Increase in outstanding indebtedness under the LSA from $25.0 million to $25.0 million as of December 31, 2020.
• Amortization expense increased by $2.4 million from 2022 to 2023, reaching $11.5 million.
• Change in the date of acquisition of StudyLink Cohort Solutions Pty Ltd. from July 13, 2022, to November 3, 2023.
• Stock-based compensation expense surged by $3.4 million, a 128.9% increase, attributed to equity grants.
• Net loss decreased from $8.6 million to $4.2 million.
• The company's federal NOL carryforwards decreased from approximately $119 million to $86 million, with state NOL carryforwards decreasing from approximately $165 million to $101 million.
• Total assets grew from $639.8 million to $1,079.7 million, an increase of $439.9 million.
• Revenue increased from $289.4 million to $403.1 million, a rise of $113.7 million or 39.3%.
• Professional fees increased by $5.3 million, a 108.2% rise, due to third-party commissions and consulting fees.
• Exclusion of StudyLink Cohort Go from the internal control assessment for financial reporting as of December 31, 2023.
• Interest expense decreased from $372,000 to $0.
• The company's gross profit increased from $174.9 million to $247.4 million.
• Total stockholders' equity rose from $482.2 million to $786.1 million, an increase of $303.9 million.
• The company's adjusted EBITDA increased from $14.9 million to $22.8 million.
• Amortization of intangible assets rose by $1.5 million, a 62.5% increase, due to acquired customer relationships.
• Weighted average common shares outstanding increased from 107.9 million to 114.8 million.
• Adjustment in the number of shares available for future issuance under the 2021 Plan from 6,128,465 to 6,525,093.
• Amendment to the Transition Agreement with Michael Ellis on February 23, 2024, correcting a scrivener's error in the number of shares underlying the Third Option.