Business Combination & Acquisitions (Tables)

9 Months Ended

Sep. 30, 2022

Reverse Recapitalization [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table summarizes the fair value of the aggregate consideration paid for Order2Cash (in thousands):

Cash paid at close (1)	$	59,878
Deferred purchase price (2)	586
Total purchase consideration	$	60,464

(1)Cash paid at close represents the gross contractual amounts paid. Net cash paid, which accounts for cash acquired of $0.4 million, was $59.5 million and is reflected as an investing activity on the Condensed Consolidated Statements of Cash Flows.

(2)An additional $0.6 million is payable within four years of the closing date upon achievement of certain conditions. This amount is recognized as purchase price. Refer to Note 13 - Fair Value Measurements for information on determining the fair value.

The following table summarizes the fair value of the aggregate consideration paid for iController (in thousands):

Cash paid at close (1)	$	57,020
Contingent consideration (2)	5,085
Deferred purchase price (3)	579
Total purchase consideration	$	62,684

(1)The cash paid at close represents the gross contractual amounts paid. Net cash paid, which accounts for cash acquired of $0.2 million, was $56.8 million and is reflected as an investing activity on the Condensed Consolidated Statements of Cash Flows.

(2)The acquisition of iController included contingent consideration to be paid in cash to the seller based on the amount and timing of iController’s achievement of certain recurring revenue growth targets over a three-year period subsequent to the acquisition date. The fair value of this contingent consideration on the closing date was $5.1 million, which was recognized as purchase price. Refer to Note 13 - Fair Value Measurements for information on determining the fair value.

(3)The deferred purchase price was paid in the first quarter of 2022 upon completion of certain conditions.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the acquisition of Order2Cash (in thousands):

Assets:
Cash and cash equivalents	$	422
Accounts receivable	2,189
Property and equipment	184
Operating lease right-of-use assets	569
Goodwill (1)	40,838
Intangible assets (2)	27,238
Total assets	$	71,440
Liabilities:
Accounts payable	$	861
Accrued expenses and other current liabilities	1,510
Operating lease liabilities	569
Deferred revenue	1,226
Deferred taxes	6,810
Total liabilities	10,976
Net assets acquired	$	60,464

(1)Goodwill represents the expected revenue synergies from combining Order2Cash with Billtrust, as well as the value of the acquired workforce. The goodwill is not expected to be deductible for income tax purposes.

(2)All of the intangible assets are expected to be finite lived.

The following table summarizes the final allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the acquisition of iController (in thousands):

Assets:
Cash and cash equivalents	$	187
Accounts receivable	1,217
Property and equipment	439
Operating lease right-of-use assets	651
Goodwill (1)	52,386
Intangible assets (2)	17,385
Other assets (current and non-current)	76
Total assets	$	72,341
Liabilities:
Accounts payable	$	524
Accrued expenses and other current liabilities	641
Operating lease liabilities, net of current portion	917
Deferred revenue	3,775
Deferred taxes	3,800
Total liabilities	9,657
Net assets acquired	$	62,684

(1)Goodwill represents the expected revenue synergies from combining iController with Billtrust, as well as the value of the acquired workforce. The goodwill is not deductible for income tax purposes.

(2)All of the intangible assets are finite-lived.

Schedule of Acquired Finite-Lived Intangible Assets by Major Class

Based on the preliminary valuation, the intangible assets acquired were (in thousands):

	Fair Value		Useful Life (in Years)
Customer relationships	$	22,471	13 - 14
Developed technology	3,405		5
Trade names	1,362		6
Total intangible assets	$	27,238

Based on the valuation, the intangible assets acquired were (in thousands):

	Fair Value		Useful Life (in Years)
Customer relationships	$	14,256	15
Developed technology	2,202		6
Trade names	927		6
Total intangible assets	$	17,385

Schedule of Business Acquisition, Pro Forma Information

As a result, the following unaudited pro forma financial information is presented as if Order2Cash had been acquired by the Company on January 1, 2021 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Pro forma total revenue	$	51,362	$	43,343	$	147,621	$	131,676
Pro forma net loss	$	(21,092)	$	(10,732)	$	(65,271)	$	(47,188)

Schedule of Reverse Recapitalization

The following table reconciles the elements of the Business Combination, accounted for as a reverse recapitalization, to the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders' Equity for the nine months ended September 30, 2021 (in thousands):

	Reverse Recapitalization
Cash - South Mountain (net of redemptions and non-contingent expenses)	$	240,670
Cash - PIPE investors	200,000
Cash electing shares of Legacy Billtrust shareholders	(90,061)
Fees to underwriters and other transaction costs	(19,936)
Net cash received from reverse recapitalization	330,673
Net assets acquired and other adjustments	255
Net contributions from reverse recapitalization	$	330,928

The number of shares of Class 1 and Class 2 common stock of BTRS Holdings Inc. issued immediately following the consummation of the Business Combination, accounted for as a reverse recapitalization, is summarized as follows (in thousands):

	Number of Shares
Common Stock outstanding prior to Business Combination	25,000
South Mountain founder shares	5,500
Redemption of South Mountain shares	(2)
Common stock of South Mountain	30,498
Shares issued from PIPE	20,000
Legacy Billtrust shareholders' shares purchased for cash	(9,006)
Recapitalization shares	41,492
Legacy Billtrust stockholders' shares	103,774
Total shares	145,266

Schedule of Contingent Consideration Liabilities

The following table is a reconciliation of the liability balance at the BCA Closing Date and the changes therein for the nine months ended September 30, 2021 (in thousands):

	Earnout Shares		Sponsor Vesting Shares		Total
Fair value on Closing Date	$	191,095	$	39,900	$	230,995
Fair value adjustment (1)	8,246		1,780		10,026
Amount paid for tax withholding	(4,013)		—		(4,013)
Amount reclassified to equity	(195,328)		(41,680)		(237,008)
Balance, March 31, 2021	$	—	$	—	$	—

(1) Included in change in fair value of financial instruments on the Condensed Consolidated Statements of Operations.