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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-40575

EverCommerce Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware81-4063248
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
3601 Walnut Street, Suite 400
Denver, Colorado
80205
(Address of principal executive offices)(Zip Code)

(720) 647-4948
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.00001 par valueEVCMThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

As of August 6, 2021, there were 195,336,835 shares of the registrant’s common stock, par value $0.00001, outstanding.



TABLE OF CONTENTS

Page
Part IFINANCIAL INFORMATION



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in 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”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.



SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II. Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:

Our limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter.
Our recent growth rates may not be sustainable or indicative of future growth and we expect our growth rate to slow.
We have experienced net losses in the past and we may not achieve profitability in the future.
We may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict.
We may reduce our rate of acquisitions and may be unsuccessful in achieving continued growth through acquisitions.
Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets.
In order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings.
We may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets, which would inhibit our ability to grow and increase our profitability.
We face intense competition in each of the industries in which we operate, which could negatively impact our business, results of operations and financial condition and cause our market share to decline.
The industries in which we operate are rapidly evolving and subject to consolidation and the market for technology-enabled services that empower small- and medium-sized businesses is relatively immature and unproven.
We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations.
We are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of our payment network or payment processors, they can seek to fine us, suspend us or terminate our registrations through our bank sponsors.
If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology.
Real or perceived errors, failures or bugs in our solutions could adversely affect our business, results of operations, financial condition and growth prospects.
Unauthorized disclosure, destruction or modification of data, disruption of our software or services could expose us to liability, protracted and costly litigation and damage our reputation.
Our estimated total addressable market is subject to inherent challenges and uncertainties.
Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance and utilization of our solutions.
Our systems and our third-party providers’ systems may fail, or our third-party providers may discontinue providing their services or technology generally or to us specifically, which in either case could interrupt our business, cause us to lose business and increase our costs.
If lower margin solutions and services grow at a faster rate than our higher margin solutions and services, we may experience lower aggregate profitability and margins.
The outbreak of the novel strain of coronavirus disease has impacted, and a future pandemic, epidemic or outbreak of an infectious disease in the United States could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business.
We may be unable to adequately protect or enforce, and we may incur significant costs in enforcing or defending, our intellectual property and other proprietary rights.
We may be subject to patent, trademark and other intellectual property infringement claims, which may be time-consuming, and cause us to incur significant liability and increase our costs of doing business.
We are subject to governmental regulation and other legal obligations, including those related privacy, data protection and information security and the healthcare industry, and our actual or perceived failure to comply with such regulations and obligations could harm our business. Compliance with such laws could



also impair our efforts to maintain and expand our customer and user bases, and thereby decrease our revenue.
The parties to our sponsor stockholders agreement, who also hold a significant portion of our common stock, control the direction of our business and such parties’ ownership of our common stock prevent you and other stockholders from influencing significant decisions.
We are a “controlled company” under the corporate governance rules of The Nasdaq Stock Market and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements.



PART I — FINANCIAL INFORMATION

Condensed Consolidated Financial Statements (unaudited)

EverCommerce Inc.

Condensed Consolidated Balance Sheets
(in thousands, except per share and share amounts)
(unaudited)
June 30, December 31,
20212020
Assets
Current assets:
Cash and cash equivalents$199,470 $96,035 
Restricted cash3,111 2,303 
 Accounts receivable, net of allowance for doubtful accounts of $1.9 million and $1.0 million at June 30, 2021 and December 31, 2020, respectively
31,458 24,966 
Contract assets12,142 9,838 
Prepaid expenses and other current assets21,147 10,686 
Total current assets267,328 143,828 
Non-current assets:
Property and equipment, net14,035 14,705 
Capitalized software, net20,167 16,069 
Other non-current assets17,267 14,102 
Intangible assets, net448,309 470,729 
Goodwill719,651 668,151 
Total non-current assets1,219,429 1,183,756 
Total assets$1,486,757 $1,327,584 




















The accompanying notes are an integral part of these condensed consolidated financial statements.

1


EverCommerce Inc.

Condensed Consolidated Balance Sheets (Continued)
(in thousands, except per share and share amounts)
(unaudited)
June 30, December 31,
20212020
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit
Current liabilities:
Accounts payable$11,667 $11,131 
Accrued expenses and other45,819 46,408 
Deferred revenue20,485 13,621 
Customer deposits8,318 8,247 
Current maturities of long-term debt8,000 7,294 
Total current liabilities94,289 86,701 
Non-current liabilities:
Deferred tax liability, net11,093 10,766 
Long-term deferred revenue2,652 2,297 
Long-term debt, net of current maturities and deferred financing costs758,243 691,038 
Other non-current liabilities17,113 17,626 
Total non-current liabilities789,101 721,727 
Total liabilities883,390 808,428 
Commitments and contingencies (Note 15)
Convertible Preferred Stock:
Series B convertible preferred stock, $0.00001 par value, 75,000,000 shares authorized and 72,225,754 shares issued and outstanding (liquidation preference of $760.2 million and $745.0 million) as of June 30, 2021 and December 31, 2020, respectively
760,151 745,046 
Series C convertible preferred stock, $0.00001 par value, 15,000,000 shares authorized and 7,857,142 shares issued and outstanding (liquidation preference of $109.8 million) as of June 30, 2021
109,782  
Series A convertible preferred stock, $0.00001 par value, 50,000,000 shares authorized and 44,957,786 shares issued and outstanding (liquidation preference of $163.3 million) as of June 30, 2021 and December 31, 2020
163,264 163,264 
Total convertible preferred stock1,033,197 908,310 
Stockholders’ deficit:
Common stock, $0.00001 par value, 200,000,000 and 185,000,000 shares authorized and 43,997,951 and 43,073,327 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
  
Accumulated other comprehensive income2,458 1,546 
Additional paid-in capital39,305 40,564 
Accumulated deficit(471,593)(431,264)
Total stockholders’ deficit(429,830)(389,154)
Total liabilities, convertible preferred stock and stockholders’ deficit$1,486,757 $1,327,584 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2


EverCommerce Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share and share amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021202020212020
Revenues:
Subscription and transaction fees$85,136 $51,898 $160,331 $108,396 
Marketing technology solutions31,976 23,197 57,364 38,379 
Other3,938 4,250 8,261 9,595 
Total revenues121,050 79,345 225,956 156,370 
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization presented separately below)40,856 29,080 76,530 56,892 
Sales and marketing22,802 10,629 42,491 24,233 
Product development12,047 6,208 22,372 14,660 
General and administrative31,923 18,634 54,017 39,301 
Depreciation and amortization24,224 19,310 47,921 36,148 
Total operating expenses131,852 83,861 243,331 171,234 
Operating loss(10,802)(4,516)(17,375)(14,864)
Interest and other expense, net(13,165)(10,146)(26,114)(20,897)
Net loss before income tax benefit (expense)(23,967)(14,662)(43,489)(35,761)
Income tax benefit (expense)(367)977 3,160 2,174 
Net loss$(24,334)$(13,685)$(40,329)$(33,587)
Other comprehensive income:
Foreign currency translation gains (losses), net369 427 912 (1,424)
Comprehensive loss$(23,965)$(13,258)$(39,417)$(35,011)
Net loss attributable to common stockholders:
Net loss$(24,334)$(13,685)$(40,329)$(33,587)
Adjustments to net loss (see Note 12) (13,105)(15,105)(26,210)
Net loss attributable to common stockholders$(24,334)$(26,790)$(55,434)$(59,797)
Net loss per share attributable to common stockholders:
Basic$(0.56)$(0.65)$(1.27)$(1.45)
Diluted$(0.56)$(0.65)$(1.27)$(1.45)
Weighted-average shares of common stock outstanding used in computing net loss per share attributable to common stockholders:
Basic43,732,225 41,308,527 43,483,144 41,153,761 
Diluted43,732,225 41,308,527 43,483,144 41,153,761 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


EverCommerce Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit
(in thousands)
(unaudited)
Series B Convertible Preferred
Stock
Series C Convertible Preferred
Stock
Series A Convertible Preferred
Stock
Total Convertible Preferred StockCommon StockAdditional
Paid-In Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
(Loss) Income
Total
Stockholders’ Deficit
SharesAmountSharesAmountSharesAmountSharesAmount
Balance at December 31, 2020
72,226 $745,046  $ 44,958 $163,264 $908,310 43,074 $ $40,564 $(431,264)$1,546 $(389,154)
Rollover equity in consideration of net assets acquired— — — — — — — 45 — 416 — — 416 
Stock-based compensation— — — — — — — — — 903 — — 903 
Stock option exercises— — — — — — — 223 — 735 — — 735 
Foreign currency translation gains, net— — — — — — — — — — — 543 543 
Accretion of Series B convertible preferred stock to redemption value— 15,105 — — — — 15,105 — — (15,105)— — (15,105)
Net loss— — — — — — — — — — (15,995)— (15,995)
Balance at March 31, 2021
72,226 760,151   44,958 163,264 923,415 43,342  27,513 (447,259)2,089 (417,657)
Issuance of convertible preferred stock, net  7,857 109,782   109,782      — 
Measurement period adjustment to update fair value of rollover equity       — — 310   310 
Stock-based compensation       571 — 11,201   11,201 
Stock option exercises       84 — 281   281 
Foreign currency translation gains, net           369 369 
Net loss          (24,334) (24,334)
Balance at June 30, 2021
72,226 $760,151 7,857 $109,782 44,958 $163,264 1,033,197 43,997 $ $39,305 $(471,593)$2,458 $(429,830)

The accompanying notes are an integral part of these condensed consolidated financial statements.
4


EverCommerce Inc.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (Continued)
(in thousands)
(unaudited)
Series B Convertible Preferred
Stock
Series A Convertible Preferred
Stock
Total Convertible Preferred StockCommon StockAdditional
Paid-In Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
(Loss) Income
Total
Stockholders’ Deficit
SharesAmountSharesAmountSharesAmount
Balance at December 31, 2019
55,759 $527,065 44,958 $163,264 $690,329 40,731 $ $96,129 $(371,310)$342 $(274,839)
Rollover equity in consideration of net assets acquired— — — — — 127 — 618 — — 618 
Stock-based compensation— — — — — 244 — 846 — — 846 
Stock option exercises— — — — — 44 — 50 — — 50 
Foreign currency translation losses, net— — — — — — — — — (1,851)(1,851)
Accretion of Series B convertible preferred stock to redemption value— 13,105 — — 13,105 — — (13,105)— — (13,105)
Net loss— — — — — — — — (19,902)— (19,902)
Balance at March 31, 202055,759 540,170 44,958 163,264 703,434 41,146  84,538 (391,212)(1,509)(308,183)
Stock-based compensation     244 — 981   981 
Stock option exercises     4 — 6   6 
Foreign currency translation gains, net        — 427 427 
Accretion of Series B convertible preferred stock to redemption value 13,105   13,105   (13,105)— — (13,105)
Net loss        (13,685)— (13,685)
Balance at June 30, 2020
55,759 $553,275 44,958 $163,264 $716,539 41,394 $ $72,420 $(404,897)$(1,082)$(333,559)
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


EverCommerce Inc.

Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
June 30,
20212020
Cash flows provided by operating activities:
Net loss$(40,329)$(33,587)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization47,921 36,148 
Amortization of discount on long-term debt3,234 1,848 
Amortization of deferred financing costs on long-term debt120 95 
Amortization of costs and fees on credit facility commitments291 612 
Deferred taxes(3,284)486 
Bad debt expense1,030 1,349 
Paid-in-kind interest on long-term debt200 186 
Stock-based compensation expense12,104 1,827 
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable, net(7,068)(679)
Prepaid expenses and other current assets(13,482)1,047 
Other non-current assets(3,004)(4,943)
Accounts payable398 2,333 
Accrued expenses and other(982)(2,679)
Deferred revenue7,151 1,880 
Customer deposits and other long-term liabilities(468)3,750 
Net cash provided by operating activities3,832 9,673 
Cash flows used in investing activities:
Purchases of property and equipment(1,136)(4,181)
Capitalization of software costs(5,672)(4,361)
Payment of contingent consideration (2,000)
Acquisition of companies, net of cash acquired(69,017)(100,734)
Net cash used in investing activities(75,825)(111,276)
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


EverCommerce Inc.

Condensed Consolidated Statements of Cash Flows (Continued)
(in thousands)
(unaudited)

Six Months Ended
June 30,
20212020
Cash flows provided by financing activities:
Payments on long-term debt(4,015)(2,651)
Proceeds from long-term debt69,216 135,652 
Exercise of stock options1,016 56 
Proceeds from preferred stock issuance, net109,782  
Net cash provided by financing activities175,999 133,057 
Effect of foreign currency exchange rate changes on cash237 (6)
Net increase in cash and cash equivalents and restricted cash104,243 31,448 
Cash and cash equivalents and restricted cash:
Beginning of period98,338 57,344 
End of period$202,581 $88,792 
Supplemental disclosures of cash flow information:
Cash paid for interest$21,888 $15,586 
Cash paid for income taxes$583 $394 
Supplemental disclosures of noncash investing and financing activities:
Rollover equity in consideration of net assets acquired$726 $618 
Fair value of earnout in consideration of net assets acquired$ $2,455 
Accretion of Series B convertible preferred stock to redemption value$15,105 $26,210 


The accompanying notes are an integral part of these condensed consolidated financial statements.
7

EverCommerce Inc.
June 30, 2021
Notes to Condensed Consolidated Financial Statements
Note 1. Nature of the Business

EverCommerce Inc. and subsidiaries (the “Company” or “EverCommerce”) is a leading provider of integrated software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve over 500,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services. Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as construction contractors and home maintenance technicians, to physician practices and therapists in the health services industry, to personal trainers and salon owners in the fitness and wellness sectors. Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly nuanced demands, as well as highly complementary solutions that complete end-to-end offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences. See Note 3 for additional information on acquired subsidiaries. The Company was incorporated in Delaware on September 29, 2016, and began operations on October 17, 2016 (Inception). The Company is headquartered in Denver, Colorado, and has operations across the United States, Canada, Jordan, United Kingdom and Australia. The Company changed its name from PaySimple Holdings, Inc. to EverCommerce Inc. as of December 14, 2020.

Note 2. Summary of Significant Accounting Policies
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2020 and the related notes contained in the Company’s final prospectus for its initial public offering of its common stock (“IPO”) dated as of June 30, 2021 and filed with the SEC pursuant to Rule 424(b)(4) on July 6, 2021 (the “Prospectus”). The December 31, 2020 condensed consolidated balance sheet was derived from our audited consolidated financial statements as of that date. Our unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. All intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes in accounting policies during the six months ended June 30, 2021 from those disclosed in the annual consolidated financial statements for the year ended December 31, 2020 and the related notes appearing in our Prospectus, other than as noted below in Accounting Pronouncements Issued and Adopted.

The operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results expected for the full year ending December 31, 2021.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited condensed consolidated financial statements, including the accompanying notes. The Company bases its estimates on historical factors, current circumstances, and the experience and judgment of management. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates. Significant estimates reflected in the consolidated financial statements include revenue recognition, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, assumptions underlying the fair value used in the
8

EverCommerce Inc.
June 30, 2021
Notes to Condensed Consolidated Financial Statements
calculation of stock-based compensation, valuation of intangible assets and goodwill and useful lives of tangible and intangible assets, among others.
Recently Issued Accounting Pronouncements not yet Adopted
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which is intended to improve financial reporting about leasing transactions. The ASU affects all companies that lease assets such as real estate and equipment for a period for more than 12 months, and will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The updated standard will be effective for annual reporting periods beginning after December 15, 2021. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company’s accounts receivable and contract assets. This updated standard will be effective for annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements.
Accounting Pronouncements Issued and Adopted
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this ASU for the six months ended June 30, 2021 and it did not have a material impact on its financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 eliminates the cash conversion and beneficial conversation feature models in ASC 470-20 that require an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity. Instead, an issuer will account for these securities as a single unit of account, unless the conversion feature meets certain criteria. As further discussed in Note 10 the Company issued Series C Convertible Preferred Stock (“Series C”) during the three months ended June 30, 2021. As a result of adopting ASU 2020-06, the Company was not required to determine whether bifurcation of an embedded conversion feature from the host instruments was necessary.
Note 3. Acquisitions
2021 Acquisitions
During the six months ended June 30, 2021, the Company completed two business acquisitions in conjunction with the execution of its long-term plans and objectives in building a service commerce platform supporting the success of SMBs. Both of the acquisitions qualified as business combinations under ASC Topic 805, Business Combinations (“ASC 805”). Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition date fair values, with any excess consideration recognized as goodwill. Goodwill primarily represents the value associated with the assembled workforce, and expected synergies subsumed into goodwill.
Assets acquired and liabilities assumed in connection with each acquisition have been recorded at their fair values. Fair values were determined by management using the assistance of third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the income approach—relief from royalty method for developed technology and trade name, the income approach—excess earnings method for customer
9

EverCommerce Inc.
June 30, 2021
Notes to Condensed Consolidated Financial Statements
relationships and the comparative business valuation method for non-compete agreements. A Monte Carlo simulation was used as the valuation method to determine the fair value of earnout liabilities. A number of assumptions and estimates were involved in the application of these valuation methods, including revenue forecasts, expected competition, costs of revenues, obsolescence, tax rates, capital spending, discount rates and working capital changes. Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated revenues and cost synergies available to a market participant.
The Company’s condensed consolidated results of operations include $2.7 million of acquisition related transaction costs in general and administrative expense for acquisitions consummated during the six months ended June 30, 2021.
Each acquisition allows for an adjustment to the purchase price to be made subsequent to the transaction closing date based on the actual amount of working capital and cash delivered to the Company. The consideration paid and purchase price allocations disclosed reflect the effects of these adjustments.
The allocation of purchase consideration related to all 2021 acquisitions is considered preliminary.
The following table summarizes the estimated fair values of consideration transferred, assets acquired and liabilities assumed for each acquisition during the six months ended June 30, 2021:
BriostackPulseMTotal
(in thousands)
Cash$34,441 $34,593 $69,034 
Rollover equity726  726 
Total consideration$35,167 $34,593 $69,760 
Net assets acquired:
Cash and cash equivalents$17 $ $17 
Accounts receivable, trade156  156 
Other receivables221 151 372 
Prepaid expenses and other current assets53 32 85 
Property and equipment22 4 26 
Other non-current assets144 3 147 
Intangible—developed technology1,360 2,380 3,740 
Intangible—customer relationships4,800 12,510 17,310 
Intangible—trade name390 260 650 
Intangible—non-compete agreements23 10 33 
Goodwill28,263 23,029 51,292 
Accounts payable(20)(113)(133)
Other current liabilities(28) (28)
Accrued expenses and other(206)(99)(305)
Deferred tax liability (3,538)(3,538)
Deferred revenue(28)(36)(64)
Total net assets acquired$35,167 $34,593 $69,760 

10

EverCommerce Inc.
June 30, 2021
Notes to Condensed Consolidated Financial Statements
Briostack

On January 19, 2021, the Company acquired 100% of the interest of Briostack LLC dba Briostack (“Briostack”), a provider of operational management software to pest control businesses, for $35.2 million. Under the terms of the purchase agreement, certain members of Briostack received 45,454 shares of common stock rollover equity. The Company assessed the fair value of the shares at $0.7 million by applying a market approach. The fair value of the rollover equity is reflected in the total consideration above.
PulseM

On March 17, 2021, the Company acquired 100% of the interest of Speetra, Inc. dba PulseM (“PulseM”), a provider of enterprise-level reputation management software for small businesses, for $34.6 million.
2020 Acquisitions
During 2020 and in the six months ended June 30, 2020, the Company completed nine and four business acquisitions, respectively, in conjunction with the execution of its long-term plans and objectives in building a service commerce platform supporting the success of SMBs. All of the acquisitions qualified as business combinations under ASC 805. Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition date fair values, with any excess consideration recognized as goodwill. Goodwill primarily represents the value associated with the assembled workforce, and expected synergies subsumed into goodwill.
Assets acquired and liabilities assumed in connection with each acquisition have been recorded at their fair values. Fair values were determined by management using the assistance of third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the income approach—relief from royalty method for developed technology and trade name, the income approach—excess earnings method for customer relationships and the comparative business valuation method for non-compete agreements. A Monte Carlo simulation was used as the valuation method to determine the fair value of earnout liabilities. A number of assumptions and estimates were involved in the application of these valuation methods, including revenue forecasts, expected competition, costs of revenues, obsolescence, tax rates, capital spending, discount rates and working capital changes. Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated revenues and cost synergies available to a market participant.
The Company’s condensed consolidated results of operations include $15.5 million of acquisition related transaction costs in general and administrative expense for acquisitions consummated in 2020, with $4.9 million incurred in the six months ended June 30, 2020.
Each acquisition allows for an adjustment to the purchase price to be made subsequent to the transaction closing date based on the actual amount of working capital and cash delivered to the Company. The consideration paid and purchase price allocations disclosed reflect the effects of these adjustments.
The allocation of purchase consideration related to certain 2020 acquisitions is considered preliminary with provisional amounts related to tax-related and other items.
11

EverCommerce Inc.
June 30, 2021
Notes to Condensed Consolidated Financial Statements
The following table summarizes the estimated fair values of consideration transferred, assets acquired and liabilities assumed for each acquisition in 2020:
RemodelingQiigoAlertMDInvoice Simple
(in thousands)
Cash$25,909 $21,564 $21,853 $32,507 
Rollover equity 618   
Fair value of earnout2,455    
Total consideration$28,364 $22,182 $21,853 $32,507 
Net assets acquired:
Cash and cash equivalents$520 $3 $ $598 
Accounts receivable, trade3,401 320 510 688 
Other receivables6   271 
Contract assets85 249   
Prepaid expenses and other current assets95 74 11 57 
Property and equipment65 114 58 184 
Other non-current assets 757   
Intangible—developed technology1,480 2,120 2,030 1,530 
Intangible—customer relationships