You should read the following discussion and analysis of our financial condition
and results of operations together with the financial statements and related
notes that are included elsewhere in this Quarterly Report on Form 10-Q and in
our Annual Report on Form 10-K filed with the SEC on February 19, 2021. Certain
statements in this Quarterly Report on Form 10-Q are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). These statements involve a number of
risks, uncertainties and other factors that could cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking
statements. Factors that could materially affect such forward-looking statements
can be found in the section entitled "Risk Factors" in our Annual Report on Form
10-K for the year ended December 31, 2020 and elsewhere in this Form 10-Q.
Investors are urged to consider these factors carefully in evaluating any
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements made herein are only
made as of the date hereof, and we undertake no obligation to publicly update
such forward-looking statements to reflect subsequent events or circumstances.

Certain statements in the following discussions are based on non-GAAP financial
measures. A "non-GAAP financial measure" is a numerical measure of a
registrant's historical or future financial performance, financial position or
cash flows that (i) excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the statements of
comprehensive income, balance sheets or statements of cash flows of the issuer;
or (ii) includes amounts, or is subject to adjustments that have the effect of
including amounts, that are excluded from the most directly comparable measure
so calculated and presented. The Company includes non-GAAP financial measures in
this Management's Discussion and Analysis, as the Company's management believes
that these measures and the information they provide are useful to investors
because they permit investors to view the Company's performance using the same
tools that management uses and to better evaluate the Company's ongoing business
performance. In order to better align the Company's reported results with the
internal metrics used by the Company's management to evaluate business
performance as well as to provide better comparisons to prior periods and peer
data, non-GAAP measures exclude the impact of purchase accounting related to the
Acquisition. See "Reconciliation of Non-GAAP Revenues" below for more
information and reconciliations of such measures to the nearest comparable

GAAP
measures.

Overview

We are a public sector company that offers a cloud-based suite of solutions
primarily for North American state and local governments. Our six wholly-owned
subsidiaries are Bonfire, CityBase, eCivis, Open Counter, Questica and Sherpa.
Through our operating subsidiaries, we serve some of the fastest growing
segments in the government technology sector, specifically procurement,
payments, grants management, permitting, and budgeting.

We were formed on August 11, 2016 for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the "business combination"). Until the
business combination, we did not engage in any operations nor generate any
revenues. We recognized an opportunity to replace costly legacy on-premises
software systems with scalable and efficient SaaS products. Our search led to
the acquisition (the "Acquisition") of Bonfire, CityBase, eCivis, Open Counter,
Questica, and Sherpa on February 19, 2019.

Our customers are primarily located in the United States and Canada, including
counties, municipalities, special districts, law enforcement agencies and public
school districts. We plan to continue to increase our customer base by
leveraging our comprehensive product portfolio with our existing customer base,
investing in direct sales to new customers, and using relationships with other
companies that offer complementary products and services.

We have historically signed a high percentage of agreements with new customers,
as well as renewal agreements with existing customers, in the second and third
quarters of each year and usually during the last month of the quarter. This can
be attributed to buying patterns typical in the public sector. As the terms of
most of our customer agreements are measured in full year increments, agreements
initially entered into in any given month of any quarter will generally come up
for

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renewal at that same time in subsequent years. This seasonality is reflected in our invoicing and cash flows with our highest collections occurring in the second half of each calendar year.



Our variable consideration or usage fee revenue is also dependent on the payment
patterns of our customers' constituents.  Historically, a high percentage of
these usage fees have been earned in the second and fourth quarters of each
year.  This seasonality is also reflected in our revenues and cash flows during
the respective periods.

Expansion and Further Penetration of Our Customer Base.  We employ a strategy
that focuses on acquiring new customers and growing our relationships with
existing customers over time. We believe that significant opportunity exists for
us to acquire new customers as well as expand the use of our platforms by
selling additional products and increasing the number of users within our
current customers' organizations.

Investment in Growth.  We plan to continue to invest in our business so that we
can capitalize on our market opportunity. We intend to continue to grow our
sales and marketing team to acquire new customers and to increase sales to
existing customers. We intend to continue to grow our research and development
team to extend the functionality and range of our applications. We also intend
to invest in new and improved information technology solutions to support our
business. However, we expect our sales and marketing expenses and research and
development expenses as a percentage of revenues to decrease over time as we
grow our revenues and gain economies of scale by increasing our customer base
and increase sales to our existing customer base. We believe that these
investments will contribute to our long-term growth, although they may adversely
affect our profitability in the near term.

Leveraging Relationships.  We plan to continue to strengthen and expand our
relationships with technology vendors, professional services firms, and
resellers. These relationships enable us to increase the speed of deployment and
offer a wider range of integrated services to our customers. We intend to
support these existing relationships, seek additional relationships and further
expand our channel of resellers to help us increase our presence in existing
markets and to expand into new markets. Our business and results of operations
will be significantly affected by whether we succeed in leveraging and expanding
these relationships.

Market Adoption of Our Platforms.  A key focus of our sales and marketing
efforts is creating market awareness about the benefits of our cloud-based SaaS
platforms. The market for SaaS solutions is less mature than the market for
on-premise software applications, and potential customers may be slow or
unwilling to migrate from their legacy solutions. Our business and operating
results will be significantly affected by the degree to and speed with which
organizations adopt our solutions.

Key Components of our Results of Operations

Revenues



Subscription, support and maintenance. We deliver our solutions primarily as a
subscription service and provide customers with access to SaaS-related support
and updates during the term of the arrangement. Revenues are recognized ratably
over the contract term as the customer simultaneously receives and consumes the
benefits of the subscription service. Subscription fees are typically payable
within 30 days after the execution of a contract, and thereafter upon renewal.
We initially record subscription fees as contract liabilities and recognize
revenues on a straight-line basis over the term of the agreement.

Our contracts may include variable consideration in the form of usage fees, which are included in the transaction price in the period in which the usage occurs and the fee is known.


Subscription, support and maintenance revenues also includes kiosk rentals and
support or maintenance pertaining to license sales. Revenues from kiosk rentals
and support are recognized on a straight-line basis over the support period.

Revenues from subscription, support and maintenance comprised approximately 72%
and 71% of total revenues for the three months ended September 30, 2021 and 2020
and 76% and 72% for the nine months ended September 30, 2021 and 2020,
respectively.

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Professional services.   Our professional services contracts generate revenues
on a time and materials, fixed fee or subscription basis. Revenues are
recognized as the services are rendered for time and materials contracts.
Revenues are recognized when the milestones are achieved and accepted by the
customer or on a proportional performance basis for fixed fee contracts.
Revenues are recognized ratably over the contract term for subscription
contracts. The milestone method for revenue recognition is used when there is
substantive uncertainty at the date the contract is entered into regarding
whether the milestone will be achieved. Training revenues are recognized as the
services are performed. Revenues from professional services comprised
approximately 20% and 23% of total revenues for the three months ended September
30, 2021 and 2020 and 21% and 24% for the nine months ended September 30, 2021
and 2020, respectively.

License. Revenues from distinct licensed software are recognized upfront when
that software is made available to the customer, which normally coincides with
contract execution, as this is when the customer has the risks and rewards of
the right to use the software. Revenues from licenses comprised approximately
less than 1% and 5% of total revenues for the three months ended September 30,
2021 and 2020 and approximately less than 1% and 4% for the nine months ended
September 30, 2021 and 2020, respectively.

Asset sales. Revenues from asset sales are recognized when the asset, typically
a kiosk, has been received by the customer and is fully operational and ready to
accept transactions, which is when the customer obtains control and has the
risks and rewards of the asset. Asset sales comprised approximately 8% and less
than 1% of total revenues for the three months ended September 30, 2021 and 2020
and approximately 3% and less than 1% for the nine months ended September 30,
2021 and 2020, respectively.

Cost of Revenues



Cost of revenues primarily consists of salaries and benefits of personnel
relating to our hosting operations and support, implementation, and grants
research. Cost of revenues includes data center costs including depreciation of
the Company's data center assets, third-party licensing costs, consulting fees,
and the amortization of acquired technology from recent acquisitions.

Operating Expenses

Sales and marketing



Sales and marketing expenses consist primarily of personnel costs of our sales
and marketing employees, including salaries, sales commissions and incentives
and benefits, travel and related costs, outside consulting fees, marketing
programs, including lead generation, and costs of advertising and trade shows.
We defer sales commissions and amortize them ratably over the expected customer
life. We expect that sales and marketing expenses will increase as we expand our
direct sales teams and increase sales through our strategic relationships and
resellers.

Research and development

Research and development expenses consist primarily of salaries and benefits
associated with our engineering, product and quality assurance personnel.
Research and development expenses also include the cost of third-party
contractors. Other than internal-use software development costs that qualify for
capitalization, research and development costs are expensed as incurred. We
expect research and development costs to increase as we develop new solutions
and make improvements to our existing platforms.

General and administrative



General and administrative expenses consist primarily of salaries and benefits
with our executive, finance, legal, human resources, compliance and other
administrative personnel, accounting, auditing and legal professional services
fees, recruitment costs, and other corporate-related expenses. We expect that
general and administrative expenses will increase as we scale our business,

but
at a lower rate over time.



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  Table of Contents

Results of Operations

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Total revenues


Our total revenues were $16.3 million for the three months ended September 30,
2021. Excluding the $0.1 million impact of purchase accounting, our total
non-GAAP revenues for the three months ended September 30, 2021 was $16.4
million compared to $12.7 million for the three months ended September 30, 2020,
representing a 29% increase. This increase was driven by an increase in the
number of customers, an increase in the number of users added by existing
customers and an increase in the number of products purchased by existing
customers. The change in revenues for each operating segment is provided in the
following table (in thousands, except percentages):





                              Generally Accepted Accounting Principles ("GAAP")                                Non-GAAP
                            Total            Total         Increase /     Increase /      Total         Total        Increase /     Increase /
                           Revenues         Revenues       (Decrease)     (Decrease)     Revenues      Revenues      (Decrease)     (Decrease)
                             2021             2020         in Dollars        in %          2021          2020        in Dollars        in %
Procurement              $      2,690     $      2,100     $       590            28 %  $    2,690    $    2,100    $        590            28 %
Payments                        4,172            1,903           2,269           119 %       4,277         2,031           2,246           111 %
Grants Management               1,925            1,878              47             3 %       1,925         1,878              47             3 %
Permitting                        720              669              51             8 %         720           669              51             8 %
Budget                          6,750            6,037             713            12 %       6,750         6,037             713            12 %
Total                    $     16,257     $     12,587     $     3,670            29 %  $   16,362    $   12,715    $      3,647            29 %






A reconciliation of non-GAAP revenues and other non-GAAP financial measures is
included in the section titled "Reconciliation of Non-GAAP Financial Measures"
in this Quarterly Report on Form 10-Q.

Total cost of revenues

Our total cost of revenues for the three months ended September 30, 2021 increased primarily as a result of costs associated with our asset sales, headcount additions to support our revenue growth and share-based compensation resulting from the grant of restricted stock units. The change in cost of revenues for each operating segment is due to the following (in thousands, except percentages):







                      Total Cost of      Total Cost of      Increase /     Increase /
                        Revenues           Revenues         (Decrease)     (Decrease)
                          2021               2020           in Dollars        in %
Procurement          $           516    $           369    $        147            40 %
Payments                       2,245              1,289             956            74 %
Grants Management                895                821              74             9 %
Permitting                       170                143              27            19 %
Budget                         2,088              1,998              90             5 %
Total                $         5,914    $         4,620    $      1,294            28 %






Procurement

Procurement's total cost of revenues increased by $0.1 million or 40% primarily
due to a $0.1 million or 45% increase in salaries and benefits driven by a 30%
increase in average headcount from September 30, 2020 to September 30, 2021.

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Payments

Payments' total cost of revenues increased by $1.0 million or 74% primarily due
to a $0.6 million increase in costs associated with our asset sales, a $0.1
million increase in bank fees, a $0.1 million increase in costs associated with
finance lease liabilities, and a $0.1 million increase in amortization of
internal-use software.

Grants Management

Grants Management's total cost of revenues increased by $0.1 million or 9% primarily due to a $0.3 million or 271% increase in the cost of third-party contractors offset by a $0.1 million or 60% decrease in royalty costs.

Permitting

Permitting's total cost of revenues was materially consistent year-over-year.

Budget



Budget's total cost of revenues increased by $0.1 million or 5% primarily due to
a $0.3 million or 34% increase in salaries and wages and a $0.2 million or 104%
increase in share-based compensation related to the issuance of restricted stock
units, partially offset by a $0.3 million or 54% decrease in royalty costs.

Operating expenses (sales and marketing, general and administrative, and research and development)



Our operating expenses (including sales and marketing, general and
administrative and research and development expenses) for the three months ended
September 30, 2021 have increased due primarily to an increase in share-based
compensation expense resulting from the issuance of restricted stock units,
salaries and wages from an increase in headcount, reestablishment of business
travel, and expansion of third-party costs to support operations. The change in
operating expenses for each operating segment is due to the following (in
thousands, except percentages):



                        Total          Total
                      Operating      Operating      Increase /     Increase /
                      Expenses       Expenses       (Decrease)     (Decrease)
                        2021           2020         in Dollars        in %
Procurement          $     2,195    $     1,940    $        255            13 %
Payments                   3,558          3,271             287             9 %
Grants Management          1,998          1,541             457            30 %
Permitting                   671            696            (25)           (4) %
Budget                     3,399          2,669             730            27 %
Corporate                  2,088          1,437             651            45 %
Total                $    13,909    $    11,554    $      2,355            20 %




Procurement

Procurement's total operating expense increased by $0.3 million or 13% due to a
$0.1 million or 28% increase in research and development expenses, a $0.1
million or 14% increase in general and administration expenses, and a $0.1
million or 5% increase in sales and marketing expenses. The increase in research
and development expenses is due to a $0.1 million or 16% increase in salaries
and wages primarily driven by a 10% increase in average headcount from September
30, 2020 to September 30, 2021. The increase in general and administration
expenses is primarily due to an increase in share-based compensation expense
resulting from the issuance of restricted stock units.  The increase in sales
and marketing costs was primarily due to an increase in third-party costs to
support marketing.

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Payments

Payments' total operating expense increased by $0.3 million or 9% primarily due
to a $0.2 million increase in commissions and a $0.1 million increase in
share-based compensation expense resulting from the issuance of restricted

stock
units.

Grants Management

Grants Management's total operating expense increased by $0.5 million or 30%
primarily due to a $0.4 million or 59% increase in sales and marketing costs and
a $0.1 million or 19% increase in general and administrative expenses. The
increase in sales and marketing costs was primarily due to a $0.2 million or 43%
increase in salaries and benefits driven by a 36% increase in average headcount
from September 30, 2020 to September 30, 2021, a $0.2 million increase in
third-party commissions expense, and a $0.1 million increase in commissions. The
increase in general and administration expenses is primarily due to a $0.1
million increase in share-based compensation expense resulting from the issuance
of restricted stock units.

Permitting

Permitting's total operating expense was materially consistent year-over-year.

Budget



Budget's total operating expenses increased by $0.7 million or 27% primarily due
to a $0.5 million or 53% increase in general and administrative expenses and a
$0.2 million or 34% increase in research and development expenses.  The increase
in general and administrative expenses was due to a $0.7 million increase in
share-based compensation expense, partially offset by a $0.1 million or 30%
decrease in salaries and wages and a $0.1 million or 16% decrease in third-party
costs.  The increase in research and development expenses was due to a $0.1
million increase in salaries and wages and a $0.1 million or 114% increase in
share-based compensation expense resulting from the issuance of restricted stock
units.  The increase in salaries and wages was primarily driven by a declining
U.S. dollar relative to the Canadian dollar.

Corporate



Corporate expenses are primarily comprised of outside services including legal,
accounting and consulting fees, payroll and related expenses, corporate
insurance, and share-based compensation.  Corporate expenses increased by $0.7
million or 45% due primarily to a $0.5 million or 237% increase in salaries and
wages and a $0.2 million increase in share-based compensation expense.  The
increase in salaries and wages was primarily due to a 200% increase in average
headcount from September 30, 2020 to September 30, 2021.

Other operating expenses

Amortization of intangible assets



Amortization of intangible assets consists of the amortization of finite lived
intangibles resulting from the Acquisition as described in Note 4 of the notes
to our condensed consolidated financial statements.

Acquisition costs



Acquisition costs consists primarily of Acquisition transaction costs, capital
market advisory fees, and bonuses incurred as a result of the transaction or a
change in control.

Restructuring costs

On March 30, 2020, the Company implemented a global restructuring plan which
resulted in an approximate 10% reduction of the Company's workforce.  This
action was intended to streamline the Company's operational reporting and reduce
operating cash outflows.  The Company recorded pre-tax restructuring charges of
approximately $3.7 million which

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was comprised of one-time employee termination benefits paid over a weighted average period of approximately 10 months.

Change in fair value of contingent consideration

The change in fair value of contingent consideration consists of any adjustments to the contingent consideration liability since the Acquisition.

Other income (expense)

Interest income (expense)

Interest income (expense) is primarily comprised of the investments held by GTY Corporate, offset by interest under the November 2020 Credit Facility.

Loss on repurchase/issuance of shares



Loss on repurchase/issuance of shares is comprised of the difference in fair
value between the price in which shares are issued and the market value on the
date of grant.

Change in fair value of warrant liability

Change in fair value between the current price of the Company's warrants and the previously reported price.



Other income (loss)

Other income (loss) is comprised primarily of unrealized gains and losses associated with transactions in currencies that are not denominated in U.S. Dollars.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020



Total revenues

Our total revenues were $43.8 million for the nine months ended September 30,
2021. Excluding the $0.4 million impact of purchase accounting, our total
non-GAAP revenues for the nine months ended September 30, 2021 was $44.2
million compared to $35.6 million for the nine months ended September 30, 2020,
representing a 24% increase. This increase was driven by an increase in the
number of customers, an increase in the number of users added by existing
customers and an increase in the number of products purchased by existing
customers. The change in revenues for each operating segment is provided in the
following table (in thousands, except percentages):




                           Generally Accepted Accounting Principles ("GAAP")                                  Non-GAAP


                         Total           Total          Increase /     Increase /       Total          Total        Increase /     Increase /
                        Revenues        Revenues        (Decrease)     (Decrease)      Revenues       Revenues     (Decrease)      (Decrease)
                          2021            2020          in Dollars        in %           2021           2020        in Dollars        in %
Procurement           $      7,791    $      5,503     $      2,288             42 %  $     7,791    $    5,526    $      2,265             41 %
Payments                     9,220           5,957            3,263             55 %        9,551         6,352           3,199             50 %

Grants Management            5,509           4,831              678        

    14 %        5,509         4,851             658             14 %
Permitting                   2,058           1,907              151              8 %        2,058         1,907             151              8 %
Budget                      19,255          16,829            2,426             14 %       19,255        16,980           2,275             13 %
Total                 $     43,833    $     35,027     $      8,806             25 %  $    44,164    $   35,616    $      8,548             24 %






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Total cost of revenues



Our total cost of revenues for the nine months ended September 30, 2021
increased primarily as a result of headcount additions to support our revenue
growth and share-based compensation resulting from the grant of restricted stock
units. The change in cost of revenues for each operating segment is due to the
following (in thousands, except percentages):




`
                      Total Cost      Total Cost
                         of              of           Increase /     Increase /
                       Revenues        Revenues       (Decrease)     (Decrease)
                         2021            2020         in Dollars        in %
Procurement          $      1,481    $      1,120    $        361            32 %
Payments                    5,738           4,419           1,319            30 %
Grants Management           2,190           2,274            (84)           (4) %
Permitting                    492             427              65            15 %
Budget                      5,971           5,301             670            13 %
Total                $     15,872    $     13,541    $      2,331            17 %




Procurement

Procurement's total cost of revenues increased by $0.4 million or 32% primarily
due to a $0.3 million or 31% increase in salaries and benefits and a $0.1
million increase in amortization of internal-use software. The increase in
salaries and benefits was primarily driven by a declining U.S. dollar and a 13%
increase in average headcount from September 30, 2020 to September 30, 2021.

Payments


Payments' total cost of revenues increased by $1.3 million or 30% primarily due
to a $0.7 million increase in costs associated with our asset sales, a $0.5
million increase in bank fees and a $0.2 million increase in amortization of
internal-use software, partially offset by a $0.1 million decrease in costs
associated with kiosk operations.

Grants Management


Grants Management's total cost of revenues decreased by $0.1 million or 4%
primarily due to a $0.2 million decrease in royalties, offset by a $0.1 million
increase in share-based compensation expense associated with the issuance of
restricted stock units.

Permitting

Permitting's total cost of revenues increased by $0.1 million primarily due to a $0.1 million or 15% increase in salaries and wages due to a 20% increase in headcount from September 30, 2020 to September 30, 2021.

Budget


Budget's total cost of revenues increased by $0.7 million or 13% primarily due
to a $0.7 million or 24% increase in salaries and wages and a $0.4 million
increase in share-based compensation expense, partially offset by a $0.5 million
decrease in royalties. The increase in salaries and wages is primarily due to a
23% increase in average headcount from September 30, 2020 to September 30,

2021.

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Operating expenses (sales and marketing, general and administrative, and research and development)



Our operating expenses (including sales and marketing, general and
administrative and research and development expenses) for the nine months ended
September 30, 2021 have decreased due primarily to the restructuring plan
implemented in March 2020. The change in operating expenses for each operating
segment is due to the following (in thousands, except percentages):






                      Operating      Operating      Increase /     Increase /
                      Expenses       Expenses       (Decrease)     (Decrease)
                        2021           2020         in Dollars        in %
Procurement          $     6,420    $     6,259    $        161             3 %
Payments                   9,429         11,526         (2,097)          (18) %
Grants Management          5,435          4,816             619            13 %
Permitting                 1,959          2,300           (341)          (15) %
Budget                     8,799          7,974             825            10 %
Corporate                  5,935          5,511             424             8 %
Total                $    37,977    $    38,386    $      (409)           (1) %




Procurement

Procurement's total operating expense increased by $0.2 million or 3% primarily
due to a $0.4 million or 33% increase in research and development expenses and a
$0.2 million or 16% increase in general and administrative expenses, partially
offset by a $0.4 million or 12% decrease in sales and marketing expenses.  The
$0.4 million increase in research and development expenses was primarily driven
by a $0.3 million decrease in internal-use software capitalization and a $0.1
million increase in share-based compensation resulting from the issuance of
restricted stock units.  The $0.2 million increase in general and administrative
expenses is due to a $0.1 million or 9% increase in salaries and wages and a
$0.1 million increase in share-based compensation expense.  The increase in
salaries and wages was driven by a 9% increase in average headcount from
September 30, 2020 to September 30, 2021.  The $0.4 million decrease in sales
and marketing expenses was due primarily to a $0.2 million or 8% decrease in
salaries and wages and a $0.2 million decrease in share-based compensation
expense.  The $0.2 million decrease in salaries and wages is due primarily to a
9% decrease in average headcount from September 30, 2020 to September 30, 2021.


Payments

Payments' total operating expense decreased by $2.1 million or 18% primarily due
to a $1.0 million or 23% decrease in research and development expenses, a $0.8
million or 29% decrease in sales and marketing expenses and $0.3 million or 7%
decrease in general and administrative expenses.  The $1.0 million decrease in
research and development expenses is primarily due to a $0.8 million or 21%
decrease in salaries and wages and a $0.2 million decrease in share-based
compensation expense.  The decrease in salaries and wages was driven primarily
by a 15% decrease in average headcount from September 30, 2020 to September 30,
2021.  The $0.8 million decrease in sales and marketing expenses is due to a
$0.8 million decrease in share-based compensation expense.  The $0.3 million
decrease in general and administrative expenses is primarily due to a $0.4
million decrease in share-based compensation expense.

Grants Management



Grants Management's total operating expense increased by $0.6 million or 13%
primarily due to a $0.7 million or 43% increase in sales and marketing costs and
a $0.1 million or 9% increase in research and development expenses, partially
offset by a $0.2 million or 11% decrease in general and administrative expense.
The $0.7 million in increase in sales and marketing is mainly due to a $0.3
million increase in third-party commissions expense, a $0.3 million or 23%
increase in salaries and a $0.2 million increase in commissions. The increase in
research and development expenses is due primarily due to a $0.1 million or 6%
increase in salaries and wages driven by a 3% increase in average headcount from
September 30, 2020 to September 30, 2021. The $0.2 million decrease in general
and administrative expenses is primarily due to a $0.2 million decrease in

rent
expense.

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Permitting

Permitting's total operating expenses decreased by $0.3 million or 15% primarily
due a $0.2 million or 24% decrease in sales and marketing expenses and a $0.1
million or 34% decrease in general and administrative expenses. The $0.2 million
decrease in sales and marketing is primarily due to a $0.2 million or 32%
decrease in salaries and benefits driven by a 22% decrease in average headcount
from September 30, 2020 to September 30, 2021.   The $0.1 million decrease in
general and administrative costs is primarily due to a $0.1 million decrease in
salaries and wages.

Budget

Budget's total operating expenses increased by $0.8 million or 10% primarily due
to a $0.5 million or 10% increase in general and administrative expenses, and a
$0.3 million or 20% increase in research and development expenses. These
increases are primarily due to an increase in share-based compensation expense
resulting from the issuance of restricted stock units.

Corporate



Corporate expenses are primarily comprised of outside services including legal,
accounting and consulting fees, payroll and related expenses, corporate
insurance, and share-based compensation.  Corporate expenses increased by $0.4
million or 8% due primarily due to a $0.2 million increase in insurance expense
and a $0.2 million or 22% increase in salaries and wages.

Other operating expenses

Amortization of intangible assets



Amortization of intangible assets consists of the amortization of finite lived
intangibles resulting from the Acquisition as described in Note 4 of the notes
to our condensed consolidated financial statements.

Acquisition costs



Acquisition costs consists primarily of Acquisition transaction costs, capital
market advisory fees, and bonuses incurred as a result of the transaction or a
change in control.

Restructuring costs

On March 30, 2020, the Company implemented a global restructuring plan which
resulted in an approximate 10% reduction of the Company's workforce.  This
action was intended to streamline the Company's operational reporting and reduce
operating cash outflows.  The Company recorded pre-tax restructuring charges of
approximately $3.7 million which was comprised of one-time employee termination
benefits paid over a weighted average period of approximately 10 months.

Change in fair value of contingent consideration

The change in fair value of contingent consideration consists of any adjustments to the contingent consideration liability since the Acquisition.

Other income (expense)

Interest income (expense)

Interest income (expense) is primarily comprised of the investments held by GTY Corporate, offset by interest under the November 2020 Credit Facility.



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Loss on repurchase/issuance of shares



Loss on repurchase/issuance of shares is comprised of the difference in fair
value between the price in which shares are issued and the market value on the
date of grant.

Change in fair value of warrant liability

Change in fair value between the current price of the Company's warrants and the previously reported price.



Other income (loss)

Other income (loss) is comprised primarily of unrealized gains and losses associated with transactions in currencies that are not denominated in U.S. Dollars.

Reconciliation of Non-GAAP Revenues



To supplement our condensed consolidated financial statements, which are
prepared in accordance with U.S. generally accepted accounting principles, or
GAAP, we have provided certain financial measures that have not been prepared in
accordance with GAAP ("non-GAAP financial measures"), which include (i) non-GAAP
revenues, (ii) non-GAAP gross profit and non-GAAP gross margin and (iii)
non-GAAP loss from operations.

We use these non-GAAP financial measures internally in analyzing our financial
results and believe that these metrics are useful to investors, as a supplement
to the corresponding GAAP measure, in evaluating our ongoing operational
performance and trends. However, it is important to note that particular items
we exclude from, or include in, our non-GAAP financial measures may differ from
the items excluded from, or included in, similar non-GAAP financial measures
used by other companies in the same industry. Non-GAAP financial measures should
not be considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. Investors are encouraged to review
the reconciliation of these non-GAAP financial measures to their most directly
comparable GAAP financial measures.

Non-GAAP Revenues. Non-GAAP revenues are defined as GAAP revenues adjusted for
the impact of purchase accounting resulting from a company's business
combination which reduced its acquired contract liabilities to fair value. The
Company believes that presenting non-GAAP revenues is useful to investors as it
eliminates the impact of the purchase accounting adjustments to revenues to
allow for a direct comparison between current and future periods.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is
defined as GAAP gross profit adjusted for the impact of purchase accounting
resulting from a company's business combination and share-based compensation
included in cost of revenues. Non-GAAP gross margin is defined as non-GAAP gross
profit divided by non-GAAP revenues. The Company believes that presenting
non-GAAP gross profit and margin is useful to investors as it eliminates the
impact of the purchase accounting adjustments to allow for a direct comparison
between periods.

Non-GAAP Loss from Operations. Non-GAAP loss from operations is defined as GAAP
loss from operations adjusted for the impact of purchase accounting to revenues
resulting from a company's business combination, the amortization of acquired
intangible assets, share-based compensation, acquisition related costs, goodwill
impairment expense, restructuring charges and the change in fair value of
contingent consideration. The Company believes that presenting non-GAAP loss
from operations is useful to investors as it eliminates the impact of certain
non-cash and acquisition related expenses to allow a direct comparison of loss
from operations between all periods presented.



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Below is a reconciliation of non-GAAP revenues, non-GAAP gross profit and non-GAAP gross margin and non-GAAP loss from operations to their most directly comparable GAAP financial measures (in thousands, except percentages):






                                                                       Three Months Ended
                                                         September 30,       June 30      September 30,
                                                              2021            2021             2020
Revenues                                                $         16,257    $  14,317    $         12,587
Purchase accounting adjustment to revenue                            105   

      104                 128
Non-GAAP Revenues                                       $         16,362    $  14,421    $         12,715

Gross Profit                                            $         10,343    $   9,101    $          7,967

Purchase accounting adjustment to revenue                            105          104                 128
Share-based compensation                                             447   

      363                 225
Non-GAAP Gross Profit                                   $         10,895    $   9,568    $          8,320

Gross Margin                                                          64 %         64 %                63 %
Non-GAAP Gross Margin                                                 67 %         66 %                65 %

Loss from operations                                    $        (8,469)    $ (7,921)    $        (7,272)
Purchase accounting adjustment to revenue                            105          104                 128
Amortization of intangibles                                        3,668        3,644               3,683
Share-based compensation                                           3,336        1,868               2,024
Restructuring charges                                                  -            -                   2
Change in fair value of contingent consideration                   1,235        1,250                   -
Non-GAAP Loss from operations                           $          (125)   
$ (1,055)    $        (1,435)















                                                               Nine Months Ended September 30,
                                                                  2021                  2020
Revenues                                                              43,833                35,027
Purchase accounting adjustment to revenue                                331                   589
Non-GAAP Revenues                                           $         44,164      $         35,616

Gross Profit                                                          27,961                21,486
Purchase accounting adjustment to revenue                                331                   589
Share-based compensation                                               1,102                   575
Non-GAAP Gross Profit                                       $         29,394      $         22,650

Gross Margin                                                              64 %                  61 %
Non-GAAP Gross Margin                                                     67 %                  64 %

Loss from operations                                        $       (24,526)      $       (31,593)
Purchase accounting adjustment to revenue                                331                   589
Amortization of intangibles                                           10,911                10,998
Share-based compensation                                               7,027                 6,338
Restructuring charges                                                      -                 3,666
Change in fair value of contingent consideration                       3,599                    29
Non-GAAP Loss from Operations                               $        (2,658)      $        (9,973)


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Below is a reconciliation of non-GAAP revenues to revenues by operating segment:




                                                       Three Months Ended September 30,
                                                                Grants                                     Total
                               Procurement      Payments      Management      Permitting      Budget     Revenues
Revenues 2021                 $       2,690    $    4,172    $      1,925    $        720    $  6,750    $  16,257
Purchase accounting
adjustment to revenues                    -           105               -               -           -          105

Non-GAAP Revenues 2021 $ 2,690 $ 4,277 $ 1,925

$ 720 $ 6,750 $ 16,362


Revenues 2020                 $       2,100    $    1,903    $      1,878    $        669    $  6,037    $  12,587
Purchase accounting
adjustment to revenues                    -           128               -               -           -          128

Non-GAAP Revenues 2020 $ 2,100 $ 2,031 $ 1,878

 $        669    $  6,037    $  12,715

                  % change               28 %         111 %             3 %             8 %        12 %         29 %

                                                        Nine Months Ended September 30,
                                                                Grants                                     Total
                               Procurement      Payments      Management      Permitting      Budget     Revenues
Revenues 2021                 $       7,791    $    9,220    $      5,509    $      2,058    $ 19,255    $  43,833
Purchase accounting
adjustment to revenues                    -           331               -               -           -          331

Non-GAAP Revenues 2021 $ 7,791 $ 9,551 $ 5,509

$ 2,058 $ 19,255 $ 44,164


Revenues 2020                 $       5,503    $    5,957    $      4,831    $      1,907    $ 16,829    $  35,027
Purchase accounting
adjustment to revenues                   23           395              20               -         151          589

Non-GAAP Revenues 2020 $ 5,526 $ 6,352 $ 4,851

 $      1,907    $ 16,980    $  35,616

                  % change               41 %          50 %            14 %             8 %        13 %         24 %



Liquidity and Capital Resources



As of September 30, 2021, we had a cash balance of approximately $15.3 million.
From the date of the Acquisition through  September 30, 2021, our liquidity
needs have been satisfied through proceeds from the January-February 2020
private investment in public equity, or PIPE, transactions, proceeds from our
initial public offering that were released in February 2019 from the trust
account established in connection with such offering for the benefit of our
shareholders, proceeds from our June 2019 registered direct offering, proceeds
from our February 2020 and November 2020 credit facilities, proceeds from
issuances of stock under our at-the-market offering program, and loan proceeds
in April-May 2020 from the Paycheck Protection Program.

Our unaudited condensed consolidated financial statements have been prepared
assuming that we will continue as a going concern, which contemplates continuity
of operations, realization of assets, and liquidation of liabilities in the
normal course of business.

We are attempting to further expand our customer base, scale up production of
various products; and increase revenues; however, our cash position may not be
sufficient to support our daily operations through the next twelve months from
the date of filing this 10-Q. Our ability to continue as a going concern is
dependent upon our ability to raise additional funds by way of a public or
private offering and our ability to further generate sufficient revenues. While
we believe in the viability of our platforms, and in our ability to raise
additional funds by way of a public or private offering, there can be no
assurances to that effect.

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COVID-19 Update

In December 2019, the emergence of a novel coronavirus, or COVID-19, was
reported and in March 2020, the World Health Organization, or WHO, characterized
COVID-19 as a pandemic. We responded by immediately restricting non-essential
travel and enabled work-from-home protocols. Shortly thereafter, and in line
with guidance provided by government agencies and international organizations,
we restricted all travel, mandated a work-from-home policy across our global
workforce, and moved all in-person customer-facing events to virtual ones.

As a result of the pandemic, we saw certain new and existing customers since
March 2020 halt, defer or decrease investment in infrastructure; other customers
postpone the implementation of projects, thus causing delays in services
revenue; and an impact on new business pipeline and large deals. Although
conditions have improved, we expect that certain of our current and potential
customers will continue to take actions to reduce operating expenses and
moderate cash flows during the remainder of 2021, including by delaying sales
and requesting extended billing and payment terms.

The broader implications of the global emergence of COVID-19 on our business,
operating results, and overall financial performance, remain uncertain and
they depend on certain developments, including the duration and spread of the
outbreak, the emergence and prevalence of COVID-19 variants, vaccination rates,
the impact on our customers and our sales cycles, impact on our partners or
employees, and impact on the economic environment and financial markets, all of
which are uncertain and cannot be predicted. We are conducting business as usual
with certain continuing limitations to employee travel, employee work locations,
and marketing events, among other modifications. We will continue to actively
monitor the situation and may take further actions that alter our business
operations, as may be required by evolving guidance from public health officials
and federal, state, or local authorities, or that we determine are in the best
interests of our employees, customers, partners, suppliers, and stockholders.

Historical Cash Flows



The following table sets forth a summary of our cash flows for the periods
indicated:





                                             Nine Months Ended     Nine Months Ended
                                              September 30,         September 30,
                                                   2021                  2020

Net cash used in operating activities       $           (4,623)   $        

(13,530)


Net cash used in investing activities       $             (203)   $        

(2,850)


Net cash provided by (used in) financing
activities                                  $           (2,601)   $            14,136



Net Cash Used In Operating Activities

Our net loss and cash flows from operating activities are significantly influenced by the Acquisition and our investments in headcount and infrastructure to support anticipated growth.



For the nine months ended September 30, 2021, net cash used in operations was
$4.6 million resulting from our net loss of $33.0 million and changes in
operating assets and liabilities of $2.2 million, offset by net non-cash
expenses of $30.6 million. The $30.6 million of non-cash expenses was comprised
of $10.9 million of amortization of intangible assets acquired as a result of
the Acquisition, $7.0 million from share-based compensation resulting from our
issuance of stock options and restricted stock units, a $5.3 million loss
associated with the redemption of common stock, a $4.0 million change in fair
value of warrant liability, and a $3.6 million change in contingent
consideration, offset by a $3.2 million gain on extinguishment of debt. The
changes in operating assets and liabilities of $2.2 million was comprised
primarily of a $1.6 million increase in prepaid expenses and other assets, a
$1.5 million decrease in accounts payable and accrued liabilities, a $1.1
million increase in accounts receivable, and a $0.9 million decrease in
operating lease liabilities, offset by a $2.9 million increase in deferred
revenue.


For the nine months ended September 30, 2020, net cash used in operations was
$13.5 million resulting from our net loss of $28.5 million and changes in
operating assets and liabilities of $0.7 million, offset by net non-cash
expenses of $15.6 million. The $15.6 million of non-cash expenses was comprised
of $11.0 million of amortization of intangible assets

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acquired as a result of the Acquisition, $6.3 million from share-based
compensation resulting from our issuance of stock options and restricted stock
units and a $1.4 million loss on issuance of shares, offset by $3.1 million
change in fair value of warrant liability and $2.1 million of deferred tax
benefits related to the tax and book basis difference on the amortization of
intangible assets. The changes in operating assets and liabilities of $0.7
million was comprised primarily of a $1.4 million increase in accounts
receivable, a $1.2 million decrease in accounts payable and a $1.6 million
increase in prepaid expenses, offset by a $4.7 million increase in contract and
other long-term liabilities.

Net Cash Used In Investing Activities

Our primary investing activities have consisted of capital expenditures.

For the nine months ended September 30, 2021, cash used in investing activities was $0.2 million resulting from capital expenditures.



For the nine months ended September 30, 2020, cash used in investing activities
was $2.9 million resulting largely from $2.5 million of capital expenditures
associated with lease improvements and furniture purchases at Questica's new
facility.

Net Cash Provided By (Used in) Financing Activities



For the nine months ended September 30, 2021, cash used in financing activities
was $2.6 million primarily due to $8.0 million in redemptions of common shares,
$0.8 million in contingent consideration payments, and $0.5 million in
repayments of finance lease liabilities, offset by $6.8 million in proceeds from
the issuance of common stock.


For the nine months ended September 30, 2020, cash provided by financing
activities was $14.1 million primarily due to $11.3 million of proceeds from the
issuance of our term loan, net of issuance costs and $3.2 million of proceeds
from loans provided under the Payment Protection Program, offset by $0.4 million
in repayments of finance lease obligations.



Critical Accounting Policies and Use of Estimates

See Note 3 of the notes to our unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

The impact of recently issued accounting standards is set forth in Note 3, Summary of Significant Accounting Policies, of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

Contractual Obligations and Commitments



As of September 30, 2021, there were no significant changes to our contractual
obligations from those presented as of December 31, 2020 in our Annual Report on
Form 10-K filed with the SEC on February 19, 2021.

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