Quarterly Report for Quarter Ending May 31, 2025 (Form 10-Q)

Management's Discussion and Analysis ofFinancial Condition and Results of Operations.

This item contains a discussion of our business, including a general overview of our business, results of operations, liquidity and capital resources as well as quantitative and qualitative disclosures 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 Operationsof our 2025 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 world-class end-to-end supply chain software platform that enables the world's largest companies to transform the way they make, move and sell goods and services. Our SaaS platform spans many key strategic and operational areas including channel, planning, global trade, logistics and supply. With a cloud-native global SaaS platform purpose-built for modern supply chains, we connect manufacturing, logistics, channel and distributing partners as one multi-enterprise network. Our SaaS platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste and operate sustainably. In aggregate, we serve clients in all major countries in the world across a wide range of end-markets, including consumer goods, food and beverage, manufacturing, retail, industrial and automotive, aerospace and defense, technology and transportation, among others.

We operate in what we believe is an attractive industry with strong secular tailwinds and a total addressable market which includes significant whitespace within our current client base. This upsell opportunity within our existing client base is largely driven by their current technology solution, which is often a combination of legacy point solutions and home-grown applications which could be a combination of manual processes and spreadsheets. As manufacturing continues to evolve, supply chains have grown more complex, creating the need for a modern cloud-based solution. We believe our cloud-based, end-to-end software platform offers a differentiated and more connected solution for clients that provides all the mechanisms needed to run a fully integrated supply chain solution with visibility at every point. If our clients initially purchase portions of our software, they can add on additional modules as the need arises.

Recent Events

On May 25, 2025, we entered into the Merger Agreement to be acquired by WiseTech. Under the terms of the transaction, our stockholders will receive $3.30 per share in cash. The closing of the transaction is dependent upon and subject to customary closing conditions. See Pending Corporate Transactionsbelow for additional information.

Results of Operations

The following table is our Unaudited Condensed Consolidated Statements of Operations for the periods indicated:

Three Months Ended May 31, 2025 compared to Three Months Ended May 31, 2024

Revenue

Subscriptions revenue was $132.9 million for the three months ended May 31, 2025, a $1.5 million, or 1%, increase compared to subscriptions revenue of $131.4 million for the three months ended May 31, 2024. The increase in subscriptions revenue was primarily due to stabilization in churn and new bookings.

Professional services and other revenue were $19.7 million for the three months ended May 31, 2025 compared to $19.8 million for the three months ended May 31, 2024. Professional services and other revenue was flat during the periods.

Our subscriptions revenue as a percentage of total revenue was 87% for the first quarter of fiscal 2026 and 2025. Our professional services and other revenue as a percentage of total revenue was 13% for the first quarter of fiscal 2026 and 2025.

Cost of Revenue, Gross Profit and Gross Margin

Cost of subscriptions was $38.4 million for the three months ended May 31, 2025, a $1.3 million, or 3%, increase compared to $37.1 million for the three months ended May 31, 2024. This increase was primarily driven by a $1.7 million increase in personnel related costs and $1.1 million increase in software costs partially offset by a decrease of $1.2 million of depreciation expense when compared to the prior year.

Cost of professional services and other revenue was $16.8 million for the three months ended May 31, 2025 and 2024.

Amortization of acquired intangible assets was $23.8 million for the three months ended May 31, 2025 compared to $24.7 million for the three months ended May 31, 2024. The decrease in amortization expense was due to certain intangible assets being fully amortized.

Our subscriptions gross margin was 53% in the first quarter of fiscal 2026 and 2025.

Our professional services gross margin was 15% in the first quarter of fiscal 2026 and 2025.

Research and Development

Research and development expenses were $23.4 million for the three months ended May 31, 2025, a $1.4 million, or 6%, decrease compared to $24.8 million for the three months ended May 31, 2024. The decrease was mainly due to a $1.0 million decrease in personnel costs primarily due to an increased mix in offshore resources when compared to the prior year.

Sales and Marketing

Sales and marketing expenses were $20.2 million for the three months ended May 31, 2025, an $0.8 million, or 4%, decrease compared to $21.0 million in the prior year. The decrease was driven by a decline in marketing and personnel costs partially offset by an increase in share-based compensation as compared to the prior year.

General and Administrative

General and administrative expenses were $21.4 million for the three months ended May 31, 2025, a $1.9 million, or 8%, decrease compared to $23.3 million in the prior year. The decrease was the result of $1.4 million lower share-based compensation expense and $1.0 million lower personnel costs.

Other Operating Expenses

Acquisition and other related expenses were $5.5 million and $0.3 million for the three months ended May 31, 2025 and 2024, respectively. The increase in expenses was a result of our strategic alternatives review and the announced merger with WiseTech.

Amortization of acquired intangible assets was $5.6 million and $20.1 million for the first quarter of fiscal 2026 and 2025, respectively. The decrease in amortization expense was due to certain intangible assets being fully amortized.

Interest and Other Expense, Net

Interest and other expense, net was $20.1 million for the three months ended May 31, 2025, a $5.3 million, or 21%, decrease compared to $25.4 million in the prior year. The decrease was driven by higher realized exchange gains and lower interest expense on our debt due to normal principal payments and lower interest rates in fiscal 2026 compared to fiscal 2025.

Gain (Loss) from Change in Tax Receivable Agreement

During the three months ended May 31, 2025, we recorded a gain of $20.7 million related to the change in the fair value of the tax receivable agreement liability, including interest, compared to $4.0 million during the three months ended May 31, 2024. The Tax Receivable Agreement liability of May 31, 2025 was determined based on the negotiated amount in the TRA Amendment. The $20.7 million gain for the three months ended May 31, 2025 represented a $7.4 million gain related to the ASC 805 portion of the liability and a $13.3 million gain related to the portion of the liability accounted for under ASC 450. The $4.0 million loss for the three months ended May 31, 2024 represented the change in the ASC 805 portion of the liability.

Prior to May 31, 2025, we calculated the fair value of the Tax Receivable Agreement payments based on the expected timing of when tax attributes would be utilized. The Tax Receivable Agreement liability, related to exchanges as of the Business Combination date, has been revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in gain (loss) from change in tax receivable agreement liability in the Unaudited Condensed Consolidated Statements of Operations in the period in which the change occurred.

In addition, under ASC 450, transactions with partnership unit holders after the acquisition date have resulted in additional Tax Receivable Agreement liabilities. Prior to May 31, 2025, the ASC 450 portion of the Receivable Agreement liability was recorded on a gross undiscounted basis. During the three months ended May 31, 2024, the Tax Receivable Agreement applicable to this guidance increased by $0.5 million.

Gain from Change in Fair Value of Warrant Liability

We recorded a gain of $0.5 million during the three months ended May 31, 2025, a $3.3 million decrease compared to $3.8 million in the prior year for the change in fair value on the revaluation of our warrant liability associated with our warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Unaudited 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.

Loss from Change in Fair Value of Contingent Consideration

We recorded a loss of $12.1 million during the three months ended May 31, 2025, a $9.8 million increase compared to $2.3 million in the prior year for the change in fair value on the revaluation of our contingent consideration associated with our restricted B-2 common stock and Series 2 RCUs. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Unaudited 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.

Income Tax Provision

Income tax expense was $2.2 million, or 16.2%, for the three months ended May 31, 2025 compared to an income tax benefit of $1.9 million, or 4.3%, for the three months ended May 31, 2024. We have an income tax expense in the first quarter of fiscal 2026 due to higher deferred tax assets on entities that carry a valuation allowance as well as a projected Base Erosion and Anti-abuse (BEAT) liability.

Non-GAAP Financial Measures

This document includes 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 gross profit as gross profit excluding 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: goodwill impairment charge, indefinite-lived intangible asset impairment charge, impairment of cost method investment, right-of-use assets impairment charge, transaction-related costs, (gain) loss from change 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, goodwill impairment charge, indefinite-lived intangible asset impairment charge, impairment of cost method investment and right-of-use assets impairment charge), non-cash (for example, in the case of depreciation, amortization, (gain) loss from change in the tax receivable agreement liability, (gain) loss from changes in the fair value of the warrant liability and contingent consideration and share-based compensation) 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.

The table below presents our Non-GAAP gross profit reconciled to our reported gross profit, the closest U.S. GAAP measure, for the periods indicated:

The table below presents our Adjusted EBITDA reconciled to our net loss, the closest U.S. GAAP measure, for the periods indicated:

Three Months Ended May 31, 2025 compared to Three Months Ended May 31, 2024

Gross Profit

Gross profit was $73.6 million for the three months ended May 31, 2025, a $0.9 million, or 1%, increase compared to $72.7 million for the three months ended May 31, 2024. Subscriptions gross profit was up 2% while professional services and other gross profit was down 4%. Gross margin was 48% for the first quarter of fiscal 2026 and 2025.

Non-GAAP Gross Profit

Non-GAAP gross profit was $102.4 million for the three months ended May 31, 2025, a $0.2 million decrease compared to $102.6 million for the three months ended May 31, 2024. The Non-GAAP gross margin was 67% and 68% in the first quarter of fiscal 2026 and 2025, respectively.

EBITDA

EBITDA was $45.4 million for the three months ended May 31, 2025, an $11.8 million, or 35%, increase compared to $33.6 million for the three months ended May 31, 2024. EBITDA margin was 30% for the first quarter of fiscal 2026 compared to 22% in the prior year. The increase in EBITDA and EBITDA margin was primarily related to the $24.7 million increase in the gain from change in tax receivable agreement liability and $5.3 million in lower interest expense and other, net. These increases were partially offset by the $5.2 million increase in acquisition-related expenses, $3.3 million decrease in the gain for the fair value adjustment for the warrant liability and $9.8 million increase in the loss for the fair value adjustment for the contingent consideration liability related to the restricted Series B-2 common stock as compared to prior periods.

Adjusted EBITDA

Adjusted EBITDA was $52.2 million for the three months ended May 31, 2025, a $1.5 million, or 3%, increase compared to $50.7 million for the three months ended May 31, 2024. Adjusted EBITDA margin was 34% for the first quarter of fiscal 2026 and 2025. The increase in Adjusted EBITDA was primarily a result of higher revenue and lower operating expenses compared to prior periods.

Liquidity 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 $230.2 million in cash and cash equivalents and $123.8 million of unused borrowing capacity under our 2021 Revolving Credit Facility as of May 31, 2025. See Note 11, Notes Payableto 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 arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing.

Debt

2021 Term Loan and Revolving Credit Facility

In February 2021, E2open, LLC, our subsidiary, entered into the Credit Agreement which provided for the 2021 Term Loan in the amount of $525.0 million and the 2021 Revolving Credit Facility for $75.0 million. In September 2021, the Credit Agreement was amended to include a $380.0 million incremental term loan, an increase in the letter of credit sublimit from $15.0 million to $30.0 million and an increase in the 2021 Revolving Credit Facility from $75.0 million to $155.0 million. In April 2022, the Credit Agreement was amended to include a $190.0 million incremental term loan bringing our total borrowing under the term loans to $1,095.0 million.

On April 18, 2025, E2open, LLC signed an amendment to the Credit Agreement to extend the maturity date of the 2021 Revolving Credit Facility to February 4, 2028 to coincide with the maturity date of the 2021 Term Loan. Additionally, the availability under the 2021 Revolving Credit Facility decreased from $155.0 million to $123.8 million.

E2open, LLC can request increases in the revolving commitments and additional term loan facilities, in minimum amounts of $2.0 million for each facility. Principal payments are due on the Credit Agreement the last day of February, May, August and November commencing August 2021. The Credit Agreement is payable in quarterly installments of $2.7 million.

The 2021 Term Loan has a variable interest rate resulting in an interest rate of 7.94% as of May 31, 2025 and February 28, 2025, which was based on SOFR plus 350 basis points. As of May 31, 2025 and February 28, 2025, the 2021 Term Loan had a principal balance outstanding of $1,053.5 million and $1,056.3 million, respectively. As of May 31, 2025, we had $0.2 million of accrued unpaid interest on our 2021 Term Loan recorded in accounts payable and accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. There were no outstanding borrowings, no letters of credit and $123.8 million available borrowing capacity under the 2021 Revolving Credit Facility as of May 31, 2025. There were no outstanding borrowings, no letters of credit and $155.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of February 28, 2025.

Beginning in March 2023, we entered into zero-cost interest rate collars to reduce our exposure to the variability of our interest rate associated with our outstanding debt. By keeping interest rates within the executed bands, or caps and floors, of the collars, we are able to reduce exposure to the interest rate risk. Effective March 31, 2023, we entered into an interest rate collar with a notional amount of $200.0 million and a maturity date of March 31, 2026. The executed cap was 4.75% and the floor was 2.57%. Effective April 6, 2023, an additional interest rate collar was executed with a notional amount of $100.0 million and a maturity date of March 31, 2026. The executed cap was 4.50% and the floor was 2.56%.

Cash Flows

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

Three Months Ended May 31, 2025 compared to Three Months Ended May 31, 2024

As of May 31, 2025, our consolidated cash, cash equivalents and restricted cash was $240.0 million, a $27.9 million increase from our balance of $212.1 million as of February 28, 2025.

Net cash provided by operating activities for the three months ended May 31, 2025 was $41.8 million compared to $35.9 million for the three months ended May 31, 2024. The $5.9 million increase in cash was primarily driven by an increase in subscriptions revenue and changes in working capital items in fiscal 2026.

Net cash used in investing activities was $7.3 million and $6.1 million for the three months ended May 31, 2025 and 2024, respectively, which primarily represented cash used for the development of our software platform.

Net cash used in financing activities was $3.9 million and $3.0 million for the three months ended May 31, 2025 and 2024, respectively. Repayments under the 2021 Term Loan were consistent between periods at $2.8 million. We paid $0.5 million in debt issue costs associated with the amendment of our Credit Agreement in fiscal 2026. We paid $0.2 million in additional finance lease payments in fiscal 2026 than in fiscal 2025. Additionally, we received $0.2 million from the exercise of stock options in fiscal 2025.

Tax Receivable Agreement

Concurrently with the completion of the Business Combination, we entered into the Tax Receivable Agreement with certain selling equity holders of E2open Holdings. The Tax Receivable Agreement provides for the payment by the Company of 85% of certain tax benefits that are realized or deemed realized as a result of increases in tax, utilization of pre-existing tax attributes of certain sellers and realization of additional 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. During the year ended February 28, 2025, we paid $1.8 million to Tax Receivable Agreement holders of E2open Holdings. We did not make any payments to Tax Receivable Agreement holders of E2open Holdings during the three months ended May 31, 2025.

On May 25, 2025, the TRA Amendment was signed in connection with the Merger Agreement with WiseTech. Under the TRA Amendment, the parties to the Tax Receivable Agreement will receive an aggregate of $52.5 million with the closing of the transaction with WiseTech in full satisfaction of our obligations under the Tax Receivable Agreement. This amount represents a reduction from what was contractually obligated to be paid under the change of control provisions of the Tax Receivable Agreement without the TRA Amendment. Any payments that were otherwise scheduled under the Tax Receivable Agreement prior to the closing of the transaction will not occur in accordance with the TRA Amendment.

As of May 31, 2025 and February 28, 2025, we had a current Tax Receivable Agreement liability of $42.7 million and $4.2 million, respectively, which was recorded in accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets. As of May 31, 2025, the full amount of the Tax Receivable Agreement liability was considered current under the TRA Amendment as it is payable upon closing of the merger transaction, which is expected to close by the end of the calendar year 2025. The determination of the current and long-term portion as of February 28, 2025 was based on management's estimate of taxable income for the fiscal year and the determination that a Tax Receivable Agreement liability payment was due and payable within the next twelve months.

The liability related to the Tax Receivable Agreement as of February 28, 2025 assumed (1) a corporate tax rate of 23.8%, (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, (e) changes in the tax law and (f) changes in the discount rate, the likely tax savings we will realize and the resulting amounts we are likely to pay to the selling equity holders of E2open Holdings pursuant to the Tax Receivable Agreement are uncertain. Interest accrues on the portion of the Tax Receivable Agreement liability recorded under ASC 805 at SOFR plus the applicable spread for the quarter. The portion of the Tax Receivable Agreement liability under ASC 450 was recorded on a gross undiscounted basis. These transactions, such as a conversion of Common Units to Class A Common Stock, result in a change in the Tax Receivable Agreement liability and a charge to equity.

The liability recorded on the balance sheet as of May 31, 2025 and February 28, 2025 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 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. The TRA Amendment would result in such an exchange upon closing the transaction with WiseTech and a $9.8 million obligation would be created upon this exchange. The $52.5 million settlement in the TRA Amendment is inclusive of this amount.

Warrant Liability

As of May 31, 2025 and February 28, 2025, there were an aggregate of 29,079,872 warrants outstanding. Each warrant entitles its holder to purchase one share of our Class A Common Stock at an exercise price of $11.50 per share. The warrants are recorded as a liability in warrant liability on the Condensed Consolidated Balance Sheets with a balance of $0.1 million and $0.6 million as of May 31, 2025 and February 28, 2025, respectively. During the three months ended May 31, 2025 and 2024, a gain of $0.5 million and $3.8 million was recognized in gain from change in fair value of the warrant liability in the Unaudited Condensed Consolidated Statements of Operations, respectively.

Contingent Consideration

The contingent consideration liability was $17.2 million and $5.1 million as of May 31, 2025 and February 28, 2025, respectively. The fair value remeasurements resulted in a loss of $12.1 million and $2.3 million for the three months ended May 31, 2025 and 2024, respectively. The change in the contingent consideration is recognized in gain (loss) from change in fair value of the contingent consideration in the Unaudited Condensed Consolidated Statements of Operations. The contingent liability represents the Series B-2 common stock and Series 2 RCUs.

Leases

We account for leases in accordance with ASC 842,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.

Our non-cancelable operating leases for our office spaces and vehicles have various expiration dates through September 2031. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of May 31, 2025 were: $5.2 million for June 1, 2025 through February 28, 2026, $5.4 million for fiscal 2027, $3.1 million for fiscal 2028, $1.5 million for fiscal 2029, $0.8 million for fiscal 2030 and $0.7 million thereafter. These numbers include interest of $1.9 million.

Our non-cancelable financing lease arrangements relate to software and computer equipment and have various expiration dates through November 2028. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of May 31, 2025 were: $1.8 million for June 1, 2025 through February 28, 2026, $1.9 million for fiscal 2027, $1.0 million for fiscal 2028 and $0.6 million for fiscal 2029. These numbers include interest of $0.5 million.

Global Business Services Agreement

On December 27, 2024, we entered into a Master Service Agreement (MSA) with a third party which will provide certain global business services, transformation advisory services and digital solutions for us in an effort to drive long-term transformation and efficiencies for its internal processes. The term of the agreement is seven years. The MSA can be terminated after twelve months with at least 180-days' notice and payment of the applicable termination fee, which ranged from $2.5 million to $17.0 million depending upon the reason and timing of the termination. On June 19, 2025, an amendment to the MSA was signed and termination fees were adjusted to a range of $4.0 million to $13.2 million depending on the reason and timing of the termination.

Pending Corporate Transactions

On May 25, 2025, we entered into the Merger Agreement to be acquired by WiseTech. Under the terms of the transaction, our stockholders will receive $3.30 per share.

Effect on Capital Stock

At the closing of the transaction, each issued and outstanding share of Class A Common Stock, Series B-1 common stock, Series B-2 common stock, Common Units and Series 2 RCUs will be converted into the right to receive cash equal to $3.30. The Class V Common Stock will be cancelled and extinguished without any conversion or consideration paid.

Additionally, the outstanding warrants will automatically cease to represent a warrant exercisable for our Class A Common Stock and will become exercisable in exchange for the Warrant Price, or $11.50 per share, for $3.30 in accordance with the terms of the Warrant Agreement. If a registered holder under the Warrant Agreement properly exercises a warrant within 30 days following the public disclosure of the completion of the proposed merger with WiseTech, the Warrant Price with respect to such exercise shall be reduced by an amount equal to the difference of (a) the Warrant Price in effect prior to such reduction minus (b) (1) $3.30 minus (2) the Black-Scholes Warrant Value (as defined in the Warrant Agreement).

Treatment of Company Equity Awards

At the closing of the transaction, each outstanding option with an exercise price less than $3.30 will be cancelled and converted into the right to receive cash equal to the excess of $3.30 over the option's exercise price per share. Each outstanding option with an exercise price equal to or greater than $3.30 or where the performance-based vesting conditions are not satisfied as a result of the transaction, will be cancelled at the closing of the transaction with no cash payment made.

Any restricted stock unit (RSU) that is vested but unsettled immediately prior to the closing of the transaction, is held by a non-employee board of director or advisory board member, vests in connection with the transaction or is held by an award holder whose aggregate unvested RSUs has a value of $10,000 or less will be cancelled and converted into the right to receive cash equal to $3.30 per share.

All other outstanding RSUs will be cancelled and exchanged for WiseTech restricted stock unit awards covering a number of ordinary shares equal to the product of the equity award ratio and the number of Class A Common Stock underlying the RSU with any resulting fractional shares rounded down to the nearest whole share. If WiseTech determines that converting the RSUs into WiseTech restricted stock unit awards is impracticable, such RSUs will instead be converted into the right to receive cash equal to $3.30 per share.

For the performance-based RSUs, the revenue growth performance target will be deemed achieved at 100% and the stock price condition will be measured using a value of $3.30. Any performance-based vesting conditions that are not satisfied will result in the cancellation of the associated performance-based RSUs.

At the time of the transaction, each performance-based RSU with a time-vesting component that accelerates, or each performance-based RSU with no time-vesting component, will be converted into the right to receive cash equal to $3.30 per share. All other performance-based RSUs will be cancelled and exchanged for WiseTech restricted stock unit awards covering a number of ordinary shares equal to the product of the equity award ratio and the number of Class A Common Stock underlying the performance-based RSU, with any resulting fractional shares rounded down to the nearest whole share. If WiseTech determines that converting the performance-based RSUs into WiseTech restricted stock unit awards is impracticable, such performance-based RSUs will instead be converted into the right to receive cash equal to $3.30 per share.

Termination Rights and Termination Fees

The Merger Agreement between us and WiseTech contains certain customary termination rights including if the proposed merger is not completed on or before the Termination Date, unless WiseTech, under certain circumstances in its sole discretion, has extended the Termination Date to May 26, 2026. In the case of termination, we will be required to pay WiseTech a termination fee of $37.5 million and WiseTech is also required to pay us a termination fee of $75.0 million under certain conditions.

Tax Receivable Agreement Amendment

The Tax Receivable Agreement was amended in connection with the Merger Agreement. See Note 10, Tax Receivable Agreementfor additional details. Under the TRA Amendment, the parties to the Tax Receivable Agreement will receive an aggregate of $52.5 million in cash in connection with the closing of the transaction with WiseTech in full satisfaction of our obligations under the Tax Receivable Agreement. This amount represents a reduction from what we otherwise would have been contractually obligated to pay under the change of control provisions of the Tax Receivable Agreement without the TRA Amendment. Any payments that were otherwise scheduled under the Tax Receivable Agreement prior to the closing of the transaction will not occur in accordance with the TRA Amendment.

Closing Conditions and Status

The closing of the transaction is dependent upon and subject to several closing conditions, including:

Pursuant to the rules adopted by the SEC, we prepared and filed with the SEC on July 2, 2025, a Preliminary Information Statement on Schedule 14C containing more information about the Merger Agreement and proposed merger with WiseTech.

During the three months ended May 31, 2025 and 2024, we incurred expenses of $5.5 million and $0.3 million related to the strategic review and sale of the Company. These expenses are included in acquisition-related expenses on the Unaudited Condensed Consolidated Statements of Operations.

The aggregate financial advisor fees associated with the transaction are not to exceed $33.1 million. Upon announcement of the transaction, $2.1 million of the financial advisor fees became payable, with the remainder of the fees contingent upon the closing of the transaction.

The transaction is expected to close by the end of calendar 2025.

Critical Accounting Policies and Estimates

Our unaudited 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 unaudited condensed 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 2025 Form 10-K.

There have been no changes to our critical accounting policies and estimates during the three months ended May 31, 2025 from those previously disclosed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operationsin our 2025 Form 10-K.

Recent Accounting Pronouncements

Recently issued accounting pronouncements are described in Note 3, Accounting Standardsto the Notes to the Unaudited Condensed Consolidated Financial Statements.