Basis Global (BASI) DRS/ADraft registration statement (amended)

Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock.

For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit our initial public offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our Class A common stock and the distribution of this prospectus outside the United States.

Basis and Basis’s subsidiaries own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this prospectus are listed without the applicable ®, TM and SM symbols, but they will assert, to the fullest extent under applicable law, their rights to these.

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity, and market size, is based on information from various sources, including our own estimates, as well as assumptions that we have made that are based on such data and other similar sources, and on our knowledge of the market for our products and services. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the market position, market opportunity, and market size information included in this prospectus is generally reliable, information of this sort is inherently imprecise. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

This prospectus contains statistical data, estimates, and forecasts that are based on publications or reports generated by third parties such as eMarketer, Statista, App Annie, Digiday, IDC and Forrester Research, Inc. (“Forrester”), or other publicly available information, as well as other information based on our internal sources, and including the following reports that we commissioned:

We cannot assure you that advertisers, our primary customers, will continue to use our platform or increase their use of our platform, nor can we assure you that we will be able to attract a sufficient number of new customers to continue to grow our business and revenue. We generate revenue primarily through fees earned based on the number of impressions delivered for a given advertisement and platform fees that are calculated based on a percentage of a customer’s advertising inventory purchases placed through and executed on our workflow automation software. Therefore, our revenue is dependent on both the number of customers that we sign up and the amounts these customers spend. If we are unsuccessful in educating and training our customers, particularly our new or prospective customers, on how to use and maximize the benefits of our platform, then we may not be able to attract and retain these customers, nor will we be able to expand their usage and increase their advertising spend on our platform. If our customers decide not to maintain or increase their usage of our platform for any other reason, or if we fail to attract new customers, our revenue could decline, which would materially and adversely harm our business, operating results and financial condition.

We have historically derived, and currently continue to derive, a majority of our revenue from our Managed Activations services and, while our Self-Service solutions are a growing portion of our Total revenues, there can be no guarantee that our Self-Service solutions will continue to grow as effectively as a percentage of our Total revenue, nor can there be any guarantee that our Self-Services solutions will be adopted by our new or existing customers to the extent we anticipate. If we are not successful in adding new Self-Services solutions customers our operating results and financial results may be harmed.

Our customers may use competing platforms or stop using our platform. Our contracts with customers generally contain liberal termination rights after the first 90 days of a contract date and generally do not include long-term or exclusive obligations requiring customers to use our platform or maintain or increase their use of our platform. Moreover, our customers may have relationships with our competitors and be able use our competitors’ products and services without incurring significant costs or disruptions to their businesses. Our customers may also choose to decrease their overall advertising spend on our platform for any reason, including if such customers do not believe they are receiving a sufficient return on their advertising spend with us. Accordingly, we must continually work to retain existing customers and attract new customers, increase existing and prospective customers’ usage of our platform, and capture a larger share of our customers’ advertising spend.

We face intense competition in the marketplace and need to keep up with rapidly changing technology, evolving industry standards and consumer needs, regulatory changes, and the frequent introduction of new solutions by our competitors. Our future success will depend in part upon our ability to enhance our platform and to develop and introduce new features and solutions in a timely manner with competitive prices that also meet the evolving needs of existing and prospective customers. Our platform and related solutions are complex and can require a significant

As we grow our business, we expect to continue to invest in technology services and equipment. Without these improvements, our operations might suffer from unanticipated system disruptions, slow transaction processing, unreliable service levels, impaired quality, or delays in reporting accurate information regarding transactions on our platform, any of which could negatively affect our reputation and ability to attract and retain customers. In addition, the expansion and improvement of our systems and infrastructure may require us to commit substantial financial, operational, and technical resources, with no assurance that our business will grow. If we fail to respond to technological change or to adequately maintain, expand, upgrade and develop our systems and infrastructure in a timely fashion, our growth prospects and operating results could be adversely affected.

We depend on the sustained and uninterrupted performance of our products to manage our access to advertising inventory, acquire inventory for each campaign, collect, process and interpret data and optimize campaign performance in real time and provide billing information to our financial systems. If we cannot scale to meet demand, if there are errors in our execution of any of these functions, or if we experience outages, then our business may be harmed.

Our platform is complex and multifaceted, and operational and performance issues could arise from within our platform or from outside factors, such as cyberattacks or other third-party attacks. Errors, failures, vulnerabilities, or bugs have been found in the past, and may be found in the future. We also rely on third-party technology and systems for our platform to perform properly, which results in additional risks relating to compatibility and interoperability. Further, our platform is often used in connection with computing environments, utilizing different operating systems, system management software, equipment, and networking configurations, which may result in errors or failures within our platform or within these computing environments. Operational and performance issues with our platform could include the failure of our user interface, outages, errors during upgrades or patches, discrepancies in costs billed versus costs paid, unanticipated volume overwhelming our databases, server failure, or catastrophic events affecting one or more server facilities. While we have built redundancies in our systems, full redundancies do not exist. Some failures will shut our products down completely, others only partially. We provide service level agreements to some of our customers, and if our products are not available for specified amounts of time, we may be required to provide credits or other financial compensation to our customers.

Operational and performance issues with our platform could also result in negative publicity, damage to our brand and reputation, loss of or delay in market acceptance of our platform, increased costs or loss of revenue, loss of the ability to access our platform, loss of competitive position or claims by customers for losses sustained by them. Alleviating problems resulting from such issues could require significant expenditures of capital and other

Our customers have historically used our platform to purchase mobile, display, and video advertising inventory from publishers. We expect that these will continue to be significant channels used by our customers for digital advertising in the future. We also believe that our revenue growth may depend on our ability to expand within mobile, video, and, in particular, CTV, and we have been, and are continuing to, enhance our presence in these channels. We may not be able to accurately predict changes in overall advertiser demand for the channels in which we operate and we cannot assure you that our investment in any channel or channels will benefit from or influence any changes in such demand. Any decrease in the use of mobile, display, and video advertising, whether due to customers losing confidence in the value or effectiveness of such channels, regulatory restrictions or other causes, or any inability to further penetrate CTV or enter new and emerging advertising channels, could adversely affect our business, operating results, and financial condition.

Our success in the mobile channel depends upon our ability to provide advertising for mobile connected devices, the major operating systems or Internet browsers that run on them, and the thousands of applications that are downloaded onto them. The design of mobile devices, operating systems and browsers is controlled by third parties that may introduce new products or modify existing ones. In addition, cellular network carriers may affect our ability to access specified content on mobile devices. For example, Apple Inc. (“Apple”) recently announced its intent to eliminate the Identifier for Advertisers from its devices, which we, along with our competitors and other advertisers, have used to deliver targeted advertisements to consumers. While the effects of this development are uncertain and would not prevent us from operating our bidding technology on Apple devices, it could reduce the value of the ad impressions we offer. If we cannot operate effectively with popular devices, operating systems, or Internet browsers, including Apple devices and the Apple iOS operating system, our business, operating results, and financial condition would be adversely affected.

The COVID-19 pandemic has caused general business disruption worldwide beginning in January 2020. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, operating results, cash

We have experienced, and may continue to experience, a modest adverse impact on certain parts of our business following the implementation of shelter-in-place orders to mitigate the outbreak of the COVID-19 pandemic, including a lengthening of the sales cycle for some prospective customers and delays in the delivery of professional services and trainings to our customers.

We do not yet know the full extent of potential impacts on our business, operations or on the global economy as a whole, particularly if the COVID-19 pandemic, including recent and potential future COVID-19 variants such as Delta and Omicron, continues and persists for an extended period of time. Potential impacts include:

Any of the foregoing could adversely affect our business, financial condition, and operating results.

Moreover, we have seen slower growth in certain operating expenses due to reduced business travel, deferred hiring for some positions, and the virtualization or cancellation of customer and employee events. However, as a vaccine becomes widely available and people begin to return to offices and other workplaces, any positive impacts of the COVID-19 pandemic on our business may slow or decline once the impact of the pandemic tapers. For additional information on the impact of the COVID-19 pandemic on our business, see the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance—COVID-19 Pandemic."

We have experienced significant growth since we were founded in 2001 and we continue to experience significant growth. To manage our growth effectively, we must continually evaluate and evolve our organization. We must also manage our employees, operations, finances, technology and development, and capital investments

The growth and expansion of our business creates significant challenges for our management, operational, and financial resources. In the event of continued growth of our operations or in the number of our third-party relationships, our information technology systems and our internal controls and procedures may not be adequate to support our operations. To effectively manage our growth, we must continue to improve our operational, financial, and management processes and systems and to effectively expand, train, and manage our employee base. As our organization continues to grow and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative solutions. This could negatively affect our business performance.

Our historical rate of growth may not be sustainable or indicative of our future rate of growth. We believe that our continued growth in revenue, as well as our ability to improve or maintain margins and profitability, will depend upon, among other factors, our ability to address the challenges, risks, and difficulties described elsewhere in this “Risk Factors” section and the extent to which our various offerings grow and contribute to our results of operations. We cannot provide assurance that we will be able to successfully manage any such challenges or risks to our future growth. In addition, our customer base may not continue to grow or may decline due to a variety of possible risks, including increased competition, changes in the regulatory landscape, and the maturation of our business. Any of these factors could cause our revenue growth to decline and may adversely affect our margins and profitability. Failure to continue our revenue growth or margin improvement could have a material adverse effect on our business, financial condition, and results of operations. You should not rely on our historical rate of revenue growth as an indication of our future performance.

We have historically incurred net losses, and we may not achieve or maintain profitability in the future. Therefore, our revenue growth and levels of profitability should not be considered as indicative of future performance. For the fiscal years ended December 31, 2020 and December 31, 2019, we had net income of $3.2 million and net loss of $6.9 million, respectively. For the nine months ended September 30, 2021 and September 30, 2020, we had net income of $27.1 million and net loss of $9.9 million, respectively. As of September 30, 2021, we had an accumulated deficit of $305.5 million. We also expect our operating expenses to continue to increase in the future as we continue to invest for our future growth, including expanding our research and development function to drive further development of our platform, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, reaching customers in new geographic locations, and operating as a public company, which will negatively affect our operating results if our total revenue does not increase. In addition to the anticipated costs to grow our business, we also expect to incur significant additional legal, accounting, and other expenses as a newly public company. These efforts and additional expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses.

In future periods, our revenue or profitability could decline or grow more slowly than we expect for a number of other reasons, including reduced demand for our platform, increased competition, a decrease in the growth or reduction in size of our overall market, or if we cannot capitalize on growth opportunities. Failure to manage our growth effectively could cause our business to suffer and have an adverse effect on its financial condition and operating results.

Our quarterly and annual operating results have fluctuated in the past and we expect our future operating results to continue to fluctuate due to a variety of factors, many of which are beyond our control. Fluctuations in our operating results could cause our performance to fall below the expectations of analysts and investors, and adversely affect the price of our Class A common stock. Because our business is changing and evolving rapidly, our historical operating results may not be indicative of our future operating results. Factors that may cause our operating results to fluctuate include the following:

Based upon the factors above and others beyond our control, we have a limited ability to forecast our future revenue, costs, and expenses. If we fail to meet or exceed the operating results expectations of analysts and investors or if analysts and investors have estimates and forecasts of our future performance that are unrealistic or that we do not meet, the market price of our Class A common stock could decline. In addition, if one or more of the analysts who cover us adversely change their recommendation regarding our stock, the market price of our Class A common stock could decline.

Our revenue, cash flows, business, operating results and other key operating and performance metrics may vary from quarter to quarter due to the seasonal nature of our clients’ spending on advertising campaigns. For example, our clients tend to devote more of their advertising budgets to the fourth fiscal quarter to coincide with consumer holiday spending. Moreover, advertising inventory in the fourth fiscal quarter may be more expensive due to an increase in demand. Additionally, political advertising could cause our revenue to increase during election cycles and decrease during other periods. Our historical revenue growth has lessened the impact of seasonality; however, seasonality fluctuations have in the past, and may in the future, have a significant impact on our revenue, cash flow, business, operating results and financial condition if, for example, our growth rate declines, if seasonal spending becomes more pronounced, or if seasonality otherwise differs from its expectations.

As part of our growth strategy, we have in the past acquired, and we may acquire or invest in other businesses, assets, technologies, or talent that are complementary to and fit within our strategic goals, such as our acquisition of substantially all of the assets of QuanticMind, Inc. in February 2021. Any acquisition or investment may divert the attention of management and require us to use significant amounts of cash, issue dilutive equity securities, or incur debt. We have limited experience in acquiring other businesses. In addition, the anticipated benefits or synergies of any acquisition or investment may not be realized, and we may be exposed to unknown risks, any of which could adversely affect our business, operating results, and financial condition, including risks arising from:

Failure to appropriately mitigate these risks or other issues related to such strategic investments and acquisitions could result in reducing or completely eliminating any anticipated benefits of transactions and harm our business, operating results and financial condition.

We must maintain consistent access to attractive ad inventory. Our success depends on our ability to secure access to quality inventory on reasonable terms across a broad range of advertising networks and exchanges and social media platforms, including video, display, CTV, audio and mobile inventory. The amount, quality, and cost of inventory available to us can change at any time. A few inventory suppliers hold a significant portion of the programmatic inventory either generally or concentrated in a particular channel, such as audio and social media. In addition, we compete with companies with which we have business relationships. For example, the Google subsidiary of Alphabet Inc. (“Google”), is one of our largest advertising inventory suppliers in addition to being one of our competitors. If Google or any other competitor with attractive advertising inventory limits our access to their advertising inventory, our business could be adversely affected. If our relationships with certain of our suppliers were to cease, or if the material terms of these relationships were to change unfavorably, our business would be negatively impacted.

Our suppliers are generally not bound by long-term contracts to us. As a result, there is no guarantee that we will have access to a consistent supply of quality inventory on favorable terms. If we are unable to compete favorably for advertising inventory available on real-time advertising exchanges, or if real-time advertising exchanges decide not to make their advertising inventory available to us, we may not be able to place advertisements or find alternative sources of inventory with comparable traffic patterns and consumer demographics in a timely manner. Furthermore, the inventory that we access through real-time advertising exchanges may be of low quality or misrepresented to us, despite attempts by us and our suppliers to prevent fraud and conduct quality assurance checks.

Inventory suppliers control the bidding process, rules, and procedures for the inventory they supply, and their processes may not always work in our favor. For example, suppliers may place restrictions on the use of their inventory, including prohibiting the placement of advertisements on behalf of specific advertisers. Through the bidding process, we may not win the right to deliver advertising to the inventory that is selected through our products and may not be able to replace inventory that is no longer made available to us.

As new types of inventory become available, we will need to expend significant resources to ensure we have access to such new inventory. For example, although television advertising is a large market, only a very small percentage of it is currently purchased through digital advertising exchanges. We are investing heavily in our programmatic television offering, including by increasing our workforce and by adding new features, functions, and integrations to Basis. If the CTV market does not grow as we anticipate or we fail to successfully serve this market, our growth prospects could be harmed.

Our success depends on consistently adding valuable inventory in a cost-effective manner. If we are unable to maintain a consistent supply of quality inventory for any reason, client retention and loyalty, and our financial condition and operating results could be harmed.

In addition, the viewability of ad impressions is important to certain advertisers, because it enables them to assess the value of particular ad impressions as a means to reach a target audience. There is, however, no consensus regarding the definition of viewability or the minimum standard viewability thresholds and metrics that should apply for different ad formats. We cannot predict whether consensus views will emerge, or what they will be. Incorporating accepted viewability approaches fully into our business as they evolve will require us to incur additional costs to integrate relevant technologies and process additional information through our products. In addition, ad impressions that are well differentiated on the basis of viewability will also typically be differentiated on the basis of value, with those that are less viewable valued lower. In this context, if we are not able to effectively transact ad impressions with higher viewability and to incorporate appropriate viewability capabilities into our products, we could be competitively disadvantaged and our business, operating results, and financial condition could be adversely affected.

Our success depends, in part, on our ability to protect proprietary methods and technologies that we develop or otherwise acquire, so that we can prevent others from using our inventions and proprietary information. Establishing trade secret, copyright, trademark, domain name, and patent protection is difficult and expensive. We rely on trademark, copyright, trade secret laws, confidentiality procedures and contractual provisions to protect our proprietary methods and technologies. We have been granted trademark registrations with the United States Patent and Trademark Office and various foreign authorities for certain of our brands. While we have registered trademarks in the United States and other foreign jurisdictions, and have additional trademark applications pending, there can be no assurance that our registered trademarks will not be limited in scope or invalidated, or that trademark applications will result in trademark registrations. Even if we continue to seek trademark protection in the future, we may be unable to obtain or maintain trademark registrations for our brands. In addition, any of our trademarks or other intellectual property rights may be challenged or circumvented by others or invalidated or held unenforceable through administrative processes, including opposition proceedings, cancellation proceedings, or litigation in the United States or in foreign jurisdictions. We have not pursued patent protection on our technology. It may be possible for unauthorized third parties to copy or reverse engineer aspects of our technology or otherwise obtain and use information that we regard as proprietary, or to develop technologies similar or superior to our technology or design around our proprietary rights, despite the steps we have taken to protect our proprietary rights.

We seek to protect our trade secrets and proprietary know-how and technology through confidentiality agreements and other access control measures. While we generally enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we share confidential information, we cannot assure you that these agreements will be effective in controlling access to, or preventing unauthorized distribution, use, misuse, misappropriation, reverse engineering, or disclosure of our proprietary information, know-how, and trade secrets. Further, these agreements do not prevent our competitors or partners from independently developing offerings that are substantially equivalent or superior to ours. These agreements may be breached, and we may not have adequate remedies for any such breach. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets and know-how. Failure of such strategies to protect our technology or our intellectual property in the future could have an adverse impact on our business, financial condition and results of operations.

From time to time, we may take legal action to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others, or defend against claims of infringement. Such litigation could result in substantial costs and the diversion of limited resources and might not be successful. If we are unable to protect our proprietary rights (including aspects of our technology solution) we may find ourselves at a competitive disadvantage.

We operate in an industry with extensive intellectual property litigation. There is a risk that our products or our business and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities. We have been subject and may in the future be subject, to legal proceedings and claims alleging that we infringe or otherwise violate the intellectual property rights of third parties. Our success depends, in part, on our ability to develop and commercialize our products and services without infringing, misappropriating, or otherwise violating the intellectual property rights of third parties. However, we may not be aware if our products or services are infringing, misappropriating, or otherwise violating third-party intellectual property rights, and third parties may bring claims alleging such infringement, misappropriation, or violation. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover one or more of our products or services and there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued. Companies in the software and technology industries, including some of our current and potential competitors, are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. Moreover, the law continues to evolve and be applied and interpreted by courts in novel ways that we may not be able to adequately anticipate, and such changes may subject us to additional claims and liabilities. In addition, certain companies and rights holders seek to enforce and monetize patents or other intellectual property rights they own, have purchased, or otherwise obtained. Many potential litigants, including some of our competitors, have the ability to dedicate substantial resources to assert their intellectual property rights and to defend claims that may be brought against them. In a patent infringement claim against us, we may assert, as a defense, that we do not infringe the relevant patent claims, that the patent is invalid or both. The strength of our defenses will depend on the patents asserted, the interpretation of these patents and our ability to invalidate the asserted patents. However, we could be unsuccessful in advancing non-infringement or invalidity arguments in our defense. In the United States, issued patents enjoy a presumption of validity, and the party challenging the validity of a patent claim must present clear and convincing evidence of invalidity, which is a high burden of proof. Conversely, the patent owner need only prove infringement by a preponderance of the evidence, which is a lower burden of proof.

We may also face allegations that our employees have misappropriated or divulged the intellectual property of their former employers or other third parties. Regardless of whether claims that we are infringing patents or other intellectual property rights have any merit, the claims are time consuming, divert management attention and financial resources, and are costly to evaluate and defend. Some of our competitors have substantially greater resources than we do and are able to sustain the cost of complex intellectual property litigation to a greater extent and for longer periods of time than we could. Results of these litigation matters are difficult to predict and may require us to stop offering some features, purchase licenses, which may not be available on favorable terms or at all, or modify our technology or products while we develop non-infringing substitutes, or incur significant settlement costs. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on our business, results of operations or the market price of our Class A common stock. Any of these events could have an adverse effect on our business, operating results, and financial condition.

The tax regimes we are subject to or operate under are unsettled and may be subject to significant change. Changes in tax laws (including in response to the COVID-19 pandemic) or tax rulings, or changes in interpretations of existing laws, could cause us to be subject to additional income-based taxes and non-income taxes (such as payroll, sales, use, value-added, digital tax, net worth, property and goods and services taxes), which in turn could adversely affect our financial condition and results of operations. For example, in December 2017, the U.S. federal government enacted the tax reform legislation known as the Tax Cuts and Jobs Act, or the 2017 Tax Act. The 2017 Tax Act significantly changed the existing U.S. corporate income tax laws by, among other things, lowering the U.S. corporate tax rate, implementing a partially territorial tax system, and imposing a one-time deemed repatriation tax on certain post-1986 foreign earnings. In addition, many countries in the European Union, as well as a number of

The tax laws applicable to our business, including the laws of the United States and other jurisdictions, are subject to interpretation. Our existing corporate structure has been implemented in a manner we believe is in compliance with current prevailing tax laws. In addition, we are subject to federal, state and local taxes in the United States and in numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and worldwide provision for taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain. Our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, by our earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates. The relevant taxing authorities may disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our business, with some changes possibly affecting our tax obligations in future or past years.

Sales and use, value added and similar tax laws and rates vary greatly by jurisdiction. Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable or that our presence in such jurisdictions is sufficient to require us to collect taxes, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future. Such tax assessments, penalties and interest or future requirements may adversely affect our financial condition and results of operations. Further, in June 2018, the Supreme Court held in South Dakota v. Wayfair, Inc. that states could impose sales tax collection obligations on out-of-state sellers even if those sellers lack any physical presence within the states imposing the sales taxes. Under the Wayfair decision, a person requires only a “substantial nexus” with the taxing state before the state may subject the person to sales tax collection obligations therein. An increasing number of states (both before and after the publication of the Wayfair decision) have considered or adopted laws that attempt to impose sales tax collection obligations on out-of-state sellers. The Supreme Court’s Wayfair decision has removed a significant impediment to the enactment and enforcement of these laws, and it is possible that states may seek to tax out-of-state sellers on sales that occurred in prior tax years, which could create additional administrative burdens for us, put us at a competitive disadvantage if such states do not impose similar obligations on our competitors, and decrease our future sales, which could adversely affect our business, financial condition and results of operations.

We believe our corporate culture has been a critical component of our success as we believe it fosters innovation, creativity, and teamwork across our business, helping to drive our success. We intend to expand our overall headcount and operations both domestically and internationally, with no assurance that we will be able to do so while effectively maintaining our corporate culture. As we expand and change, particularly across multiple geographies or following acquisitions, it may be difficult to preserve our corporate culture, which could reduce our ability to innovate, create, and operate effectively. In turn, the failure to preserve our culture could adversely affect our business, operating results, and financial condition by negatively affecting our ability to attract, recruit, integrate, and retain employees, continue to perform at current levels, and effectively execute our business strategy.

Our ability to maintain our competitive position is largely dependent on the services of our senior management and other key personnel. In addition, our future success depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled employees. The market for such positions is competitive. Qualified individuals are in high demand and we may incur significant costs to attract them. In addition, the loss of any of our senior management or other key employees, in particular our Founder and Chief Executive Officer, or our inability to recruit and develop mid-level managers could materially and adversely affect our ability to execute our business plan and we may be unable to find adequate replacements. Competition for qualified employees is intense in our industry, and the loss of even a few qualified employees, or an inability to attract, retain, and motivate additional highly skilled employees required for the planned expansion of our business could harm our operating results and impair our ability to grow. To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate our business effectively. All of our employees are at-will employees, meaning that they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. If we fail to retain talented senior management and other key personnel, or if we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business, financial condition, and results of operations may be materially adversely affected.

Our success depends upon the continued service of members of our senior management team and other key employees. Our Founder and Chief Executive Officer, Shawn Riegsecker, is critical to our overall management, as well as the continued development of our products and relationships with publishers, DSPs, and agencies, and our strategic direction. We do not maintain key-person insurance on any of our employees. Some of our key employees may receive significant proceeds from sales of our Class A common stock, which may reduce their motivation to continue to work for us. As a result, we may be unable to retain them, which could make it difficult to operate our business, cause us to lose expertise or know-how, and increase our recruitment and training costs.

Our success also depends on our ability to hire, train, retain, and motivate new employees. Competition for employees in our industry can be intense, and we compete for experienced personnel with many companies that have greater resources than we have. The market for talent in our key areas of operations, especially in engineering, and competition for qualified personnel is particularly intense in Chicago, where we are headquartered, as well as in New York City and Toronto, where we also maintain offices.

Market opportunity estimates and growth forecasts included in this prospectus are subject to significant uncertainty and are based on assumptions and estimates which may not prove to be accurate. The estimates and forecasts included in this prospectus relating to size and expected growth of our target market may prove to be inaccurate. Even if the markets in which we compete meet the size estimates and growth forecasts included in this prospectus, our business may not grow at similar rates, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.

We present certain operational metrics herein. We calculate these metrics using internal systems and tools that are not independently verified by any third party. These metrics may differ from estimates or similar metrics published by third parties or other companies due to differences in sources, methodologies, or the assumptions on which we rely. These metrics have a number of limitations, and our methodologies for tracking these metrics may

Natural disasters or other catastrophic events may cause damage or disruption to our operations, commerce, and the global economy, and thus could harm our business. In the event of a major earthquake, hurricane, fire, cyber-attack, war, terrorist attack, disease, such as COVID-19, power loss, telecommunications failure, or other catastrophic events, we may be unable to continue our operations, in part or in whole, and may endure reputational harm, breaches of data security, and loss of critical data, all of which could harm our business, results of operations, and financial condition. Our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disaster, such as fires, floods, severe weather, droughts, and travel-related health concerns including pandemics and epidemics. In addition, acts of terrorism, including malicious internet-based activity, could cause disruptions to the internet or the economy as a whole. Even with our disaster recovery arrangements, access to our platform could be interrupted. If our systems were to fail or be negatively impacted as a result of a natural disaster or other event, our ability to deliver our platform and solution to our customers and members would be impaired or we could lose critical data. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business, financial condition, and results of operations would be harmed.

We have implemented a disaster recovery program that allows us to move website traffic to a backup data center in the event of a catastrophe. This allows us the ability to move traffic in the event of a problem, and the ability to recover in a short period of time. However, to the extent our disaster recovery program does not effectively support the movement of traffic in a timely or complete manner in the event of a catastrophe, our business and results of operations may be harmed.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to our business, financial condition, and results of operations that may result from interruptions in access to our platform as a result of system failures.

As we grow our business, the need for business continuity planning and disaster recovery plans will grow in significance. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and tools or enhance our existing solutions, improve our operating infrastructure, or acquire complementary businesses and technologies. Accordingly, we have engaged and may continue to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and

We face intense competition in the marketplace. We compete for advertising spending against competitors that, in some cases, are also publishers or advertisers. We also compete for access to advertising inventory against a variety of competitors. Some of our existing and potential competitors are better established, benefit from greater name recognition, may have offerings and technology that we do not have, or have significantly more financial, technical, sales, and marketing resources than us. In addition, some competitors, particularly those with greater scale or a more diversified revenue base and a broader offering, have greater flexibility to offer competitive pricing and other contract terms, or bundle their product offerings with products or services that we may not be able to provide. If publishers and advertisers purchase and sell advertising inventory directly from one another or through intermediaries rather than through us, our business may suffer as a result of a reduction in advertising spend on our products. New or stronger competitors may emerge through acquisitions and industry consolidation or through development of disruptive technologies. If our offerings are not perceived as competitively differentiated, we could lose clients, market share, or be compelled to reduce our prices, thereby adversely affecting our business, operating results and financial condition.

The advertising technology industry has rapidly evolved and undergone considerable consolidation over our lifetime, and we expect these trends to continue, which may increase the capabilities and competitive posture of larger companies, particularly those that are already dominant in the advertising technology industry, and enable new or stronger competitors to emerge. We compete with other industry participants for a finite number of large advertisers in our target markets, and any consolidation of advertisers may give the resulting enterprises greater bargaining power or result in the loss of advertisers that use our products, thereby reducing our potential base of advertisers, which may adversely affect our business, operating results, and financial condition.

As technology continues to improve and market factors continue to attract investment, competition and pricing pressure may increase and market saturation may change the competitive landscape in favor of larger competitors with greater scale, broader offerings, and financial resources to grow more quickly and strengthen their competitive position relative to us. In addition, our competitors or potential competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our products and solutions to existing and prospective customers. If we are unable to compete successfully against our current and future competitors, our business, operating results, and financial position may be adversely affected.

We depend on various technology, software, products, and services from third parties or that are available as open source, including for critical features and functionality running our day-to-day operations, including payment processing, payroll, and other professional services. Identifying, negotiating, complying with, and integrating with third-party terms and technology is complex, costly, and time-consuming. Failure by third-party providers to maintain, support, or secure their technology either generally or for us specifically, or downtime, errors, or defects in their products or services, could materially and adversely impact our administrative obligations or other areas of our operations. Having to replace any third-party providers or their technology, products, or services could result in outages or difficulties in our ability to provide our services.

Our business depends on the overall demand for advertising and on the economic health of our current and prospective publishers and advertiser. For example, due to the COVID-19 pandemic and the recession in the United States and global economy in the second quarter of 2020, advertising demand on our products decreased. Various macroeconomic factors could cause advertisers to reduce their advertising budgets, including adverse economic conditions and general uncertainty about economic recovery or growth, particularly in North America where we do most of our business; instability in political or market conditions generally; and any changes in tax treatment of advertising expenses and revenue. Reductions in overall advertising spending as a result of these factors could make it difficult to predict our revenue and could adversely affect our business, operating results, and financial condition.

Consumers can, with increasing ease, implement technologies that limit our ability to collect and use data to deliver advertisements, or otherwise limit the effectiveness of the digital advertising. Cookies may be deleted or blocked by consumers. The most commonly used Internet browsers allow consumers to modify their browser settings to block first-party cookies (placed directly by the publisher or website owner that the consumer intends to interact with) or third-party cookies (placed by parties, like us, that have no direct relationship with the consumer), and some browsers block third-party cookies by default. For example, Google has announced its intention to block the use of all third-party cookies on its Chrome browser. Additionally, Apple has adopted an “opt-in” privacy model, requiring users to voluntarily choose to receive targeted ads, which may reduce the value of ad impressions on its iOS mobile application platform. Many applications and other devices allow consumers to avoid receiving advertisements by paying for subscriptions or other downloads. Mobile devices using Android and iOS operating systems limit the ability of cookies to track consumers while they are using applications other than their web browser on the device. Consequently, fewer of our cookies or publishers’ cookies may be set in browsers or be accessible in mobile devices, which adversely affects our business.

Some consumers also download free or paid “ad blocking” software on their computers or mobile devices, not only for privacy reasons, but also to counteract the adverse effect advertisements can have on the consumer experience, including increased load times, data consumption, and screen overcrowding. Ad-blocking technologies and other privacy controls may prevent some third-party cookies, or other tracking technologies, from being stored on a consumer’s computer or mobile device. If more consumers adopt these measures, our business, operating results, and financial condition could be adversely affected. Ad-blocking technologies could have an adverse effect on our business, operating results, and financial condition if they reduce the volume or effectiveness and value of advertising. In addition, some ad blocking technologies block only ads that are targeted through use of third-party data, while allowing ads based on first-party data (i.e., data owned by the publisher). These ad blockers could place us at a disadvantage because we rely on third-party data, while some large competitors have troves of first-party data they use to direct advertising. Other technologies allow ads that are deemed “acceptable,” which could be defined in ways that place us or our advertisers at a disadvantage, particularly if such technologies are controlled or influenced by our competitors. Even if ad blockers do not ultimately have an adverse effect on our business, investor concerns about ad blockers could cause our stock price to decline.

With the growth of digital advertising and e-commerce, there is increasing awareness and concern among the general public, privacy advocates, mainstream media, governmental bodies and others regarding marketing, advertising and data privacy matters, particularly as they relate to individual privacy interests and the global reach of the online marketplace. Concerns about industry practices with regard to the collection, use, and disclosure of

We host our company-owned infrastructure at third-party data centers. Any damage to or failure of our systems generally would prevent us from operating our business. We rely on the Internet and, accordingly, depend on the continuous, reliable, and secure operation of Internet servers, related hardware and software, and network infrastructure. While we have access to our servers, we do not control our servers, all components of our network or the operations of the external data centers where our servers and components of our network are maintained. The owners of our data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our data center operators is acquired, we may be required to transfer our servers and other infrastructure to new data center facilities, and we may incur significant costs and possible service interruptions.

Problems faced by our third-party data center operations, with the telecommunications network providers with whom we contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of customers. Additionally, improving our infrastructure and expanding our capacity in anticipation of growth in new channels and formats, as well as implementing technological enhancements to our products to improve our efficiency and cost-effectiveness are key components of our business strategy, and if our data centers are unable to keep up with our growing needs for capacity, this could have an adverse effect on our business. Any changes in third-party service levels at our data centers or any errors, defects, disruptions, or other performance problems could adversely affect our reputation, expose it to liability, cause us to lose customers, or otherwise adversely affect our business, operating results, and financial condition. Service interruptions might reduce our revenue, subject us to potential liability, or adversely affect our business, operating results, and financial condition.

The ongoing effects of the COVID-19 pandemic, or the occurrence of a natural disaster, an act of terrorism, vandalism or sabotage, or other unanticipated problems at these facilities could result in interruptions in the availability of Basis, and we do not currently have a disaster recovery arrangement in place. Moreover, because we do not currently have full redundancy with respect to the services at each data center, if one of our data centers shuts down there may be a period of time that our products or services, or some of our products or services, will be unavailable to publishers served by that data center. If any of these events were to occur, our business, operating results, or financial condition could be adversely affected.

As we grow our business, we expect to continue to invest in infrastructure, including hardware and software solutions, network services and database technologies, as well as potentially increasing our reliance on open source

Maintaining the security and availability of our products, network, and internal IT systems and the security of information we hold on behalf of our customers is a critical issue for Basis and our customers. Attacks on our customers and our own network are frequent and take a variety of forms, including DDoS attacks, infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, bugs, viruses, worms, and malicious software programs. Outages and disruptions of our products, including any caused by cyberattacks, may harm our reputation and our business, operating results, and financial condition.

Our business requires the storage, transmission, and utilization of data, including personally identifiable information, much of which must be maintained on a confidential basis. These activities may make us a target of cyber-attacks by third parties seeking unauthorized access to the data we maintain, including our data and client data, or to disrupt our ability to provide our services. Any failure to prevent or mitigate security breaches and improper access to or disclosure of the data we maintain, including personal information, could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position. In addition, computer malware, viruses, social engineering, and general hacking have become more prevalent. As a result of the types and volume of data on our systems, we believe that we are a particularly attractive target for such breaches and attacks.

In recent years, the frequency, severity, sophistication of cyber-attacks, hacking, phishing schemes, computer malware, viruses, social engineering, and other intentional misconduct by computer hackers has significantly increased, and government agencies and security experts have warned about the growing risks of hackers, cyber criminals, and other potential attackers targeting information technology systems. Such third parties could attempt to gain entry to our systems for the purpose of stealing data or disrupting the systems. In addition, our security measures may also be breached due to employee error, malfeasance, system errors, or vulnerabilities, including vulnerabilities of our vendors, suppliers, their products, or otherwise. Third parties may also attempt to fraudulently induce our employees or clients into disclosing sensitive information such as usernames, passwords, or other information to gain access to our clients’ data or our data, including intellectual property and other confidential business information. We believe that it has taken appropriate measures to protect our systems from intrusion, but it cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities in our systems and attempts to exploit those vulnerabilities, physical system or facility break-ins and data thefts, or other developments will not compromise or breach the technology protecting our systems and the information it possess.

Although we have developed systems and processes that are designed to protect our data, our client data, and data transmissions to prevent data loss, and to prevent or detect security breaches, our databases may be subject to unauthorized access by third parties, and we may incur significant costs in protecting against or remediating cyber-attacks. Any security breach could result in operational disruptions that impair our ability to meet our clients’ requirements, which could result in decreased revenues. Also, whether there is an actual or a perceived breach of our security, our reputation could suffer irreparable harm, causing our current and prospective clients to reject our products and services in the future and deterring data suppliers from supplying us with data. Further, we could be forced to expend significant resources in response to a security breach, including those expended in repairing system damage, increasing cyber security protection costs by deploying additional personnel and protection technologies, and litigating and resolving legal claims or governmental inquiries and investigations, all of which could divert the attention of our management and key personnel away from our business operations. In any event, a significant security breach could materially harm our business, reputation, financial condition, and operating results.

Our clients, suppliers, and other partners are primarily responsible for the security of their information technology environments, and we rely heavily on them and other third parties to supply clean data content or to utilize our products and services in a secure manner. Each of these third parties may face risks relating to cyber security, which could disrupt their businesses and therefore materially impact our business. While we provide guidance and specific requirements in some cases, it does not directly control any of such parties’ cyber security operations, or the amount of investment they place in guarding against cyber security threats. Accordingly, we are subject to any flaw in or breaches of their systems, which could materially impact our business, operations, and financial results.

Programmatic advertising enables more precise audience targeting based on the identity and actions of the user. Targeted advertising is generally more effective and valuable than other types of advertising. We and our customers must be permitted to use data in a variety of ways in order to successfully advertise to targeted audiences. Our ability to collect, use, and share data about advertising purchase and sale transactions and user behavior and interaction with content is critical to the value of our services, and any limitation on our data practices could impair our ability to deliver effective solutions to our customers. Any restriction on the types of data we collect could make placement of advertising through our solution less valuable, with commensurate reductions in revenue.

Digital advertising and in-app advertising are largely dependent on established technology companies and their operation of the most commonly used Internet browsers (Chrome, Firefox, Internet Explorer and Safari), devices and their operating systems (Android and iOS). These companies may change the operations or policies of their browsers, devices, and operating systems in a manner that fundamentally changes our ability to operate our products or collect data. Users of these browsers, devices, or operating systems may also adjust their behaviors and use of technology in ways that change our ability to collect data. Digital advertising and in-app advertising are also dependent, in part, on internet protocols and the practices of internet service providers, including IP address allocation. Changes that these providers make to their practices, or adoption of new internet protocols, may materially limit or alter the availability of data. A limitation or alteration of the availability of data in any of these or other instances may have a material impact on the advertising technology industry, which could decrease advertising budgets and subsequently reduce our revenue and adversely affect our business, operating results, and financial condition.

For example, browser providers have recently enacted (or plan to enact) changes restricting the use of third-party cookies in their browsers, which may cause instability in the digital advertising market. Execution of digital advertising relies to a significant extent on the use of cookies, pixels, and other similar technology to collect data about users and devices. Third-party cookies are owned and used by parties other than the owners of the website visited by the Internet user. We use such cookies to gather information about consumers, and for delivering digital advertising. Because we and our customers rely upon large volumes of such data collected primarily through cookies

Each third-party platform provider has broad discretion to change and interpret their terms of service and other policies with respect to the collection of data. A platform provider may alter how advertisers are able to advertise on their platform, change how the personal information of our users is made available, limit the use of personal information for advertising purposes, restrict how users can share information, or significantly increase the level of compliance or requirements necessary to use our platform. For example, in June 2020, Apple announced a plan to overhaul Identifier for Advertisers, IDFA, which anonymously profiles users for targeted advertising, as part of a new proposed application tracking transparency framework that, among other things, would require opt-in consent for certain types of tracking. The effect of such transparency and IDFA changes remains uncertain. We rely in part on IDFA to provide us with information to aid our advertisers. The proposed IDFA and transparency changes may limit our ability to collect and use IDFAs from Apple devices. Finding alternative solutions may require the incurrence of substantial costs and the expenditure of substantial resources, and to the extent we are unable to utilize IDFA or a similar offering. Additionally, Apple implemented new requirements for consumer disclosures regarding privacy and data processing practices in December 2020, which have resulted in increased compliance requirements and could result in decreased data collection on Apple’s platform. Apple has also announced a new application tracking transparency framework that would require opt-in consent for certain types of tracking. This transparency framework could have an impact on the effectiveness of our advertising practices. Any similar changes to the policies of Apple or Google may materially and adversely affect our business, financial condition, and operating results.

For in-app advertising, data regarding interactions between users and devices are tracked mostly through stable, pseudonymous mobile device identifiers that are built into the device operating system with privacy controls that allow users to express a preference with respect to data collection for advertising, including to disable the identifier. These identifiers and privacy controls are defined by the developers of the mobile operating systems and could be changed in a way that may negatively impact our business. Privacy aspects of other channels for programmatic advertising, such as over-the-top video (“OTT video”) or CTVs, are still developing. Technical or policy changes, including regulation or industry self-regulation, could harm our growth in those channels.

Limitations on our or our customers’ ability to collect and use data for advertising may impact the performance of our products.

We receive, store and process data about or related to consumers in addition to our customers, employees, and services providers. Our handling of this data is subject to a variety of federal, state, and foreign laws and regulations in addition to regulation by various government authorities and self-regulatory guidelines. Our data handling practices are also subject to contractual obligations and certain industry standards.

The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use, and storage of data relating to individuals, including the use of data for marketing, advertising, and other communications with individuals and businesses. In the United States, various laws and regulations apply to the collection, processing, disclosure, and security of certain types of data. Additionally, the U.S. Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, and security of data. If we fail to comply with any such laws or regulations, we may be subject to enforcement actions that may not only expose us to litigation, fines, and civil or criminal penalties, but may also require us to change our business practices and have an adverse effect on our business, operating results, and financial condition.

The regulatory framework for data privacy issues worldwide is currently evolving and is likely to remain uncertain for the foreseeable future. The occurrence of unanticipated events often drives the rapid adoption of legislation or regulation affecting the use, collection, or other processing of data and the manner in which we conduct our business. Restrictions could be placed upon the collection, management, aggregation, and use of information, which could result in a material increase in the cost of collecting or otherwise obtaining certain kinds of data and could limit the ways in which we may use or disclose information. In particular, interest-based advertising, or the use of data to draw inferences about a user’s interests and deliver relevant advertising to that user, and similar or related practices (sometimes referred to as behavioral advertising or personalized advertising), such as cross-device data collection and aggregation, steps taken to de-identify personal data, and to use and distribute the resulting data, including for purposes of personalization and the targeting of advertisements, have come under increased scrutiny by legislative, regulatory, and self-regulatory bodies in the United States and abroad that focus on consumer protection or data privacy. Much of this scrutiny has focused on the use of cookies and other technology to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or de-identify identities across devices and channels.

In the United States, Congress and various state legislatures, along with federal regulatory agencies have recently increased their attention on matters concerning the collection and use of consumer data. In the United States, non-sensitive consumer data generally may be used under current rules and regulations, subject to certain restrictions, so long as the person does not affirmatively “opt-out” of the collection or use of such data. If an “opt-in” model or other more restrictive regulations were to be adopted in the United States, less data would be available, and the cost of data would be higher.

California enacted legislation, the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020, along with related regulations which came into force on August 14, 2020. The CCPA creates individual privacy rights for California residents and increases the privacy and security obligations of businesses handling personal data. The CCPA is enforceable by the California Attorney General and there is also a private right of action relating to certain data security incidents. The CCPA generally requires covered businesses to, among other things, provide new disclosures to California consumers and afford California consumers new abilities to opt-out of certain sales of personal information, a concept that is defined broadly. We cannot yet fully predict the impact of the CCPA or subsequent guidance on our business or operations, but it may require us to further modify our data processing practices and policies and to incur substantial costs and expenses to comply. Decreased availability and increased costs of information could adversely affect our ability to meet our customers’ requirements and could have an adverse effect on our business, operating results, and financial condition.

Additionally, a recent California ballot initiative, the California Privacy Rights Act (“CPRA”), imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt-outs for certain uses of sensitive data and sharing of personal data starting in January 2023. As voted into law by California residents in November 2020, the CPRA could have an adverse effect on our business, operating results, and financial condition. The effects of the CCPA and CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses to comply and increase our potential exposure to regulatory enforcement or litigation.

The CCPA has encouraged “copycat” laws and in other states across the country, such as in Nevada, New Hampshire, Illinois, and Nebraska. In March 2020, Virginia passed the Consumer Data Protection Act (“CDPA”) which takes effect in January 2023. The CDPA is enforceable by the Virginia Attorney General and creates individual privacy rights for Virginia residents and increases the privacy obligations of businesses handling sensitive personal data. Similarly, Colorado passed the Colorado Privacy Act (the “CPA”), which is set to take effect on July 1, 2023. We cannot yet fully predict the impact of the CDPA, CPA, or subsequent laws on our business or operations, but they may require us to further modify our data processing practices and policies and to incur substantial costs and expenses to comply. Other proposed legislation may add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment in resources to compliance programs, and could impact strategies and availability of previously useful data and could result in increased compliance costs or changes in business practices and policies.

In Europe, the GDPR took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of EU citizens, wherever that processing occurs. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union (“EU”) that are different than those that were in place in the European Union. For example, we have been required to offer new controls to data subjects in Europe before processing data for certain aspects of our service. Failure to comply with GDPR may result in significant penalties for non-compliance of up to the greater of €20 million or 4% of an enterprise’s global annual revenue. In addition to the foregoing, a breach of the GDPR could result in regulatory investigations, reputational damage, orders to cease/change our processing of our data, enforcement notices, or assessment notices (for a compulsory audit). we may also face civil claims, including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

Further, in the European Union, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive will be replaced by an EU Regulation, known as the ePrivacy Regulation, which will significantly increase fines for non-compliance and impose burdensome requirements around obtaining consent. While the text of the ePrivacy Regulation is still under development, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. As regulators start to enforce the strict approach (which has already begun to occur in Germany, where data protection authorities have initiated a probe on third-party cookies), this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs, and subject us to additional liabilities. Any failure to achieve required data protection standards (which are not currently clear when applied to the online advertising ecosystem) may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our operating results. Because the interpretation and application of privacy and data protection laws such as the CCPA and GDPR, and the related regulations and standards, are uncertain, it is possible that these laws, regulations and standards may be interpreted and applied in manners that are, or are asserted to be, inconsistent with our data management practices or the technological features of our solutions.

We are also subject to laws and regulations that dictate whether, how, and under what circumstances we can transfer, process or receive certain data that is critical to our operations, including data shared between countries or regions in which we operate and data shared among our products and services. European data protection laws, including the GDPR, generally restrict the transfer of personal information from Europe, including the European Economic Area, United Kingdom (“U.K.”) and Switzerland, to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information. One of the primary safeguards allowing U.S. companies to import personal information from Europe has been certification to the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield frameworks administered by the U.S. Department of Commerce. However, in July 2020, the Court of Justice of the European Union issued a decision invalidating the EU-U.S. Privacy Shield framework. The same decision also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the European Commission’s Standard Contractual Clauses (“SCCs”), can lawfully be used for personal information transfers from Europe to the United States or most other countries. Similarly, on September 8, 2020, the Swiss Federal Data Protection and Information Commissioner announced that the Swiss-U.S. Privacy Shield Framework is inadequate for personal information transfers from Switzerland to the United States, and also raised questions about the viability of the Standard Contractual Clauses. Authorities in the U.K. may similarly invalidate use of the EU-U.S. Privacy Shield and raise questions on the viability of the Standard Contractual Clauses as mechanisms for lawful personal information transfers to the United States and other countries. On June 4, 2021, the European Commission adopted new SCCs, which impose on companies additional obligations relating to data transfers, including the obligation to conduct a transfer impact assessment and, depending on a party’s role in the transfer, to implement additional security measures and to update internal privacy practices. If we elect to rely on the new SCCs for data transfers, we may be required to incur significant time and resources to update our contractual arrangements and to comply with new obligations. The new SCCs may increase the legal risks and liabilities under the GDPR and local EU laws associated with cross-border data transfers, and result in material increased compliance and operational costs. At present, there are few, if any, viable alternatives to the EU-U.S. Privacy Shield, Swiss-U.S. Privacy Shield, and the SCCs, all of which are

Further, the United Kingdom’s decision to leave the EU, often referred to as Brexit, has created uncertainty in data protection issues involving the U.K. For example, pursuant to a post-Brexit trade deal between the U.K. and the EU, transfers of personal information from the European Economic Area (“EEA”) to the U.K. are not considered restricted transfers under the GDPR for a period of up to six months from January 1, 2021. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers of personal information from the EEA to the U.K. to continue without restriction for a period of four years ending June 27, 2025. During these four years, the European Commission will continue to monitor the legal situation in the U.K. and can intervene if the U.K. deviates from the level of data protection in place at the time of issuance of the adequacy decision. If the adequacy decision is withdrawn or not renewed, transfers of personal information from the EEA to the U.K. will require a valid transfer mechanism and companies making such transfers may be required to implement new processes and put new agreements in place to continue making such transfers. Additionally, although the U.K. enacted a Data Protection Act in May 2018 that is designed to be consistent with the GDPR, uncertainty remains regarding how data transfers to and from the U.K. will be regulated notwithstanding Brexit. The effects of Brexit have been and are expected to continue to be far-reaching. Brexit and the perceptions as to its impact may adversely affect business activity and economic conditions globally, and could continue to contribute to instability in global financial markets. Brexit could also have the effect of disrupting the free movement of goods, services, and people between the U.K. and the EU. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which EU laws to replace or replicate. The full effects of Brexit are uncertain and will remain so until the U.K. and EU reach a definitive resolution with regards to outstanding trade and legal matters. Given these possibilities and others we may not anticipate, as well as the lack of comparable precedent, the full extent to which our business, results of operations, and financial condition could be adversely affected by Brexit is uncertain.

In addition to our legal obligations, we have committed to comply, and generally require our clients and partners to comply, with applicable self-regulatory principles, such as the Digital Advertising Alliance’s Self-Regulatory Principles for Online Behavioral Advertising in the U.S., and similar self-regulatory principles in Europe and Canada adopted by the local Digital Advertising Alliance. Trade associations and industry self-regulatory groups have also promulgated best practices and other industry standards relating to targeted advertising. Our efforts to comply with these self-regulatory principles include providing customers with notice of and a choice of when advertising is served to them based, in part, on their interests. If we or our customers or partners make mistakes in the implementation of these principles, or if self-regulatory bodies expand these guidelines or government authorities issue different guidelines regarding Internet-based advertising, or opt out mechanisms fail to work as designed, or if Internet users misunderstand our technology or our commitments with respect to these principles, we may, as a result, be subject to negative publicity, government investigation, government or private litigation, or investigation by self-regulatory bodies or other accountability groups. Any such action against us, or investigations, even if meritless, could be costly and time consuming, require us to change our business practices, cause us to divert management’s attention and our resources, and be damaging to our reputation, brand, business, operating results, and financial condition. In addition, privacy advocates and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us. We cannot yet determine the impact such future standards may have on our business.

We have been and, in the future, may be involved in disputes with agencies and their advertisers over the operation of our products, the terms of our agreements, or our billings for purchases made by them through our products. When we are unable to collect or make adjustments to our bills to customers, we incur write-offs for bad debt or reductions to revenue, which could have a material adverse effect on our operating results for the periods in which the write-offs or revenue adjustments occur. In the future, bad debt may exceed reserves for such contingencies and our bad debt exposure may increase over time. Any increase in write-offs for bad debt or reductions in revenue associated with adjustments could have a materially negative effect on our business, operating results and financial condition.

Furthermore, we are generally contractually required to pay suppliers of advertising inventory and data within a negotiated period of time, regardless of whether our customers pay us on time, or at all. While we attempt to negotiate long payment periods with our suppliers and shorter periods from our customers, we are not always successful. As a result, our accounts payable with certain suppliers may be due on shorter cycles than our accounts receivables with certain customers, requiring us to remit payments from our own funds.

This payment process will increasingly consume working capital if we continue to be successful in growing our business. In addition, like many companies in the advertising technology industry, advertising agencies are often slow to remit payment to us, which may cause us to be unable to borrow against our accounts receivables on commercially acceptable terms, our working capital availability could be reduced, and as a consequence our operating results and financial condition would be adversely impacted. Additionally, we may need to rely on borrowings to partially fund our working capital requirements.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to fund our working capital needs, if at all. If our cash flows and borrowings are insufficient to fund our working capital requirements, we may not be able to grow at the rate we currently expect or at all. In addition, in the absence of sufficient cash flows from operations, we might be unable to meet our obligations and we may therefore be at risk of default under any borrowing arrangements. We cannot assure you that it will be able to access additional financing or increase our borrowing or borrowing capacity on commercially reasonable terms or at all.

Our sales cycle, from initial contact to contract execution and implementation, can take up to 120 days or longer. As part of our sales cycle, we may incur significant expenses before we can generate any revenue from a prospective customer. We have no assurance that the substantial time and money spent on our sales efforts will generate significant revenue. If conditions in the marketplace, generally or with a specific prospective customer, change negatively, it is possible that we will be unable to recover any of these expenses. Our sales efforts involve educating our customers about the use, technical capabilities, and benefits of our products. Some of our customers undertake an evaluation process that frequently involves not only our offerings but also the offerings of our competitors. As a result, it is difficult to predict when we will obtain new customers and begin generating revenue from these new customers. Even if our sales efforts result in obtaining a new customer, the customer controls when and to what extent it uses our products and therefore the amount of revenue that we generate, and it may not sufficiently justify the expenses incurred to acquire the customer and the related training support. As a result, we may not be able to add customers, or generate revenue, as quickly as we may expect or need, which could harm our growth prospects, business, operating results, and financial condition.

We receive requests from advertisers for discounts, fee concessions or revisions, or other forms of consideration, refunds, and greater levels of pricing transparency and specificity, in some cases as a condition to maintain the relationship or to increase the advertising spend on our platform. In addition, we charge fees to publishers for use of our technology and services, typically as a percentage of the cost of media, and we may decide

Publishers and advertisers may do business with our competitors as well as with us and, in many instances may reduce or cancel their business with us or terminate our contracts without penalty, and may bypass us and transact directly with each other or through other intermediaries that compete with us. Accordingly, our business is highly vulnerable to changes in the macro environment, price competition, and development of new or more compelling offerings by our competitors, which could reduce business generally or motivate publishers or advertisers to migrate to competitors’ offerings.

Publishers and advertisers may seek to change the terms on which they do business with us, or allocate their advertising inventory or demand to our competitors who provide advertising demand and supply to them on more favorable terms or whose offerings are considered more beneficial. Supply of advertising inventory is also limited for some publishers, such as special sites or new technologies, and publishers may request higher prices, fixed price arrangements or guarantees that we cannot provide as effectively as our competitors, or that would reduce the profitability of that business. In addition, publishers sometimes place significant restrictions on the sale of their advertising inventory, such as strict security requirements, limitations on data sharing, prohibitions on advertisements from specific advertisers or specific industries, and restrictions on the use of specified creative content or format. Finally, with the proliferation of header bidding, which is the process by which multiple advertisers participate simultaneously in a digital auction to win ad space on a website, publishers’ inventory is available for purchase through multiple exchanges simultaneously. Advertisers, in turn, are free to direct their spend to us or one or more of our competitors, and increasingly are seeking price concessions, or other consideration to direct more spend towards us.

If an advertiser or group of advertisers representing a significant portion of the demand on our products, or a publisher or group of publishers representing a significant portion of the inventory available on our platform, decides to materially reduce use of our solutions, it could cause an immediate and significant decline in our revenue and profitability and harm to our business. Loss of important inventory could reduce fees from customers that cannot be shifted to other inventory sources and make it harder to differentiate us from our competitors. The number of media publishers and advertisers in the market is finite, and it could be difficult for us to replace the losses from any publishers or advertisers whose relationships with us diminish or terminate. Additionally, if we overestimate future usage, we may incur additional expenses in adding infrastructure without a commensurate increase in revenue, which would harm our profitability and other operating results.

Publishers, advertisers, and partners impose various requirements upon each other, and they, and the underlying advertisers, are subject to regulatory requirements by governments and standards bodies applicable to their activities. While we contractually limit our exposure to liability in our contracts with advertisers, we may be held liable for the failure to satisfy or facilitate the satisfaction of some of these requirements through the contracts we enter into with publishers, advertisers, and partners. These responsibilities could expose us to significant liabilities, perhaps without the ability to impose effective mitigating controls upon, or to recover from, publishers and advertisers. We could be

We require our publishers, advertisers, data providers, and partners to abide by relevant laws, rules and regulations, and restrictions by their counterparties, when transacting through us, and we generally attempt to obtain representations from advertisers that the advertising they place through us complies with applicable laws and regulations and does not violate third-party intellectual property rights, and from publishers about the quality and characteristics of the impressions they provide. We also generally receive representations from publishers, advertisers, and data providers about their privacy practices and compliance with applicable laws and regulations, including their maintenance of adequate privacy policies that disclose and permit our data collection practices. Nonetheless, there are many circumstances in which it is difficult or impossible for us to monitor or evaluate compliance by publishers, advertisers, and data providers with such representations. For example, we cannot control the content of publisher’s media properties, and we are often unable to determine exactly what information a partner collects after an ad has been placed, and how the advertiser uses any such collected information.

If publishers, advertisers, data providers, or partners fail to abide by relevant laws, rules and regulations, or contract requirements when transacting over our platforms, or after such a transaction is completed, we could potentially face liability to consumers for such misuse. Potential sources of liability to consumers include malicious activities, such as the introduction of malware into consumers’ computers through advertisements served through us, and code that redirects consumers to sites other than the ones consumers sought to visit, potentially resulting in malware downloads or use charges from the redirect site. Publishers may have terms of use in place with their consumers that disclaim or limit their potential liabilities to such consumers, or pursuant to which consumers waive rights to bring class-action lawsuits against the publishers related to advertisements. Similarly, if such misconduct results in enforcement action by a regulatory body or other governmental authority, we could become involved in a potentially time-consuming and costly investigation or we could be subject to some form of sanction or penalty. We may not be able to secure adequate indemnification against such harms or otherwise protect ourselves, and our insurance policies may not adequately cover such claims and losses.

We use software licensed to us by third-party authors under “open source” licenses and we expect to continue to utilize open source software in the future. The use of open source software may entail greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. To the extent that we depend upon the successful operation of the open source software we use, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our products, delay the introduction of new solutions, result in a failure of our products, and injure our reputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks, and, as a result, make our systems more vulnerable to data breaches. Furthermore, some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software with open source software in a specific manner, we could, under some open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar solutions with lower development effort and time and ultimately put us at a competitive disadvantage.

Although we monitor our use of open source software to avoid subjecting ourselves to conditions we do not intend to apply, we cannot assure you that our processes for controlling our use of open source software on our platforms will be effective. If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties in order to continue operating our platforms on terms that are not economically feasible, to re-engineer our platforms or the supporting computational infrastructure or to discontinue our use of such code, or to make generally available, in source code form, portions of our proprietary code.

We host our platform using third-party service providers, including two providers of cloud infrastructure services, one of which is Amazon Web Services (“AWS”). We do not have control over the operations of the facilities of AWS and other third-party providers that we use. We therefore depend on our third-party cloud providers’ ability to protect their data centers against damage or interruption from natural disasters, power or telecommunications failures, criminal acts, and similar events. Our operations depend on protecting the cloud infrastructure hosted by such providers by maintaining their respective configuration, architecture, and interconnection specifications, as well as the information stored in these virtual data centers and which third-party internet service providers transmit. We have the past experienced service disruptions, and we cannot assure you that we will not experience interruptions or delays in our service in the future. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data storage services we use. Although we have disaster recovery plans that utilize multiple data storage locations, any incident affecting their infrastructure that may be caused by fire, flood, severe storm, earthquake, hurricane, cybersecurity attacks, power loss, telecommunications failures, unauthorized intrusion, computer viruses and disabling devices, natural disasters, military actions, terrorist attacks, and other similar events beyond our control could negatively affect our platform, including any disruptions in light of increased usage during the COVID-19 pandemic. In the event that AWS’ or any other third-party provider’s systems or service abilities are hindered by any of the events discussed above, our ability to operate our platform may be impaired and data may be compromised. All of the aforementioned risks may be augmented if our or our partners’ business continuity and disaster recovery plans prove to be inadequate. The facilities also could be subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other misconduct, all of which could lead to data theft or misappropriation. Any prolonged service disruption affecting our platform for any of the foregoing reasons could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise harm our business. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.

Our platform is accessed by many customers, often at the same time. As we continue to expand the number of our customers and products available to our customers, there may be interruptions or delays in service. In addition, the failure of data centers, third-party internet service providers, or other third-party service providers to meet our capacity requirements could result in interruptions or delays in access to our platform or impede our ability to grow our business and scale our operations. If our third-party infrastructure service agreements are terminated, or there is a lapse of service, or there is interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform as well as delays and additional expense in arranging new facilities and services

Our Class B common stock will have ten votes per share, and our Class A common stock will have one vote per share. Our directors, officers, and holders of more than 5% of our common stock, and their respective affiliates, hold

Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as transfers effected for estate planning purposes. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term. As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.

Various business challenges and opportunities may require additional funds, including the need to respond to competitive threats or market evolution by developing new solutions and improving our operating infrastructure through additional hiring or acquisition of complementary businesses or technologies, or both. In addition, we could incur significant expenses or shortfalls in anticipated cash generated as a result of unanticipated events in our business or competitive, regulatory, or other changes in our market, or longer payment cycles required or imposed by advertisers. As a result, we have entered into, and may in the future enter into, credit facilities such as our revolving line of credit, which contain restrictions that limit our flexibility in operating our business.

Our available cash and cash equivalents, any cash we may generate from operations, and our available line of credit under our Amended and Restated Credit Agreement may not be adequate to meet our capital needs, and therefore we may need to engage in equity or debt financings to secure additional funds. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it or we are unable to renew our revolving line of credit when it matures or enter into a new one, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business may be adversely affected.

If we do raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, if we issue debt, the holders of that debt would have prior claims on our assets, and in case of insolvency, the claims of creditors would be satisfied before distribution of value to equity holders, which would result in significant reduction or total loss of the value of our equity.

Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of our business. We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

Our international operations and expansion plans create challenges associated with supporting a rapidly growing business across a multitude of cultures, customs, monetary, legal and regulatory systems, and commercial infrastructures. we have a limited operating history outside of the United States and Canada, and our ability to manage and expand our business and conduct our operations internationally requires considerable attention and resources.

We have personnel in the U.S., Canada, Mexico, and Argentina, and we are continuing to expand our international operations. Some of the countries into which we are expanding, or potentially may expand, present heightened risks with respect to compliance with anti-corruption laws, trade sanctions, export controls and other laws. Our teams in locations outside the United States are substantially smaller than some of our teams in the United States. To the extent we are unable to effectively engage with non-U.S. advertising agencies or international divisions of U.S. agencies due to our limited sales force capacity, or we are unable to secure quality non-U.S. ad inventory and data on reasonable terms, we may be unable to effectively grow in international markets.

Our international operations and expansion subject it to a variety of additional risks, including:

We may incur significant operating expenses as a result of our international operations and expansion, and we may not be successful. Our international business also subjects it to the impact of differing regulatory requirements, costs and difficulties in managing a distributed workforce, and potentially adverse tax consequences in the U.S. and abroad. If our international activities were found to be in violation of any existing or future international laws or

The trading price of our Class A common stock following the closing of this offering is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “—Risks Related to our Business and Industry” and the following:

These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low. As a result, you may suffer a loss on your investment.

Following periods of market volatility, stockholders may institute securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

Prior to this offering, there has been no public market or active private market for our Class A common stock. We have applied to list our Class A common stock on the Nasdaq. However, an active trading market may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the market price of your shares of Class A common stock. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers, and principal stockholders, or the perception that these sales might occur, could cause the market price of our Class A common stock to decline.

All of the shares of Class A common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act (including any shares that may be purchased by any of our affiliates in this offering). The remaining shares of our Class A common stock are subject to the lock-up agreement or market stand-off agreements described below.

Subject to certain exceptions, we, all of our directors and executive officers, and substantially all of the holders of our Class A common stock, or securities exercisable for or convertible into our Class A common stock outstanding immediately prior to this offering, are subject to market stand-off agreements or have agreed not to offer, sell, or agree to sell, directly or indirectly, any shares of common stock without the permission of each of Goldman Sachs & Co. LLC, BofA Securities, Inc. and RBC Capital Markets, LLC, on behalf of the underwriters, for a period of        days from the date of this prospectus. When the lock-up period expires, we and our securityholders subject to a lock-up agreement or market stand-off agreement will be able to sell our shares in the public market. In addition, the underwriters may, in their sole discretion, release all or some portion of the shares

We will have broad discretion in the application of the net proceeds to us from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. If we do not use the net proceeds that we receive in this offering effectively, our business, financial condition, operating results, and prospects could be harmed, and the market price of our Class A common stock could decline. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade interest-bearing securities such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government that may not generate a high yield for our stockholders. These investments may not yield a favorable return to our investors.

The initial public offering price is substantially higher than the pro forma net tangible book value per share of our Class A common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchase shares of our Class A common stock in this offering, based on the midpoint of the offering price range set forth on the cover page of this prospectus, and the issuance of shares of common stock in this offering, you will experience immediate dilution of $        per share, the difference between the price per share you pay for our Class A common stock and its pro forma net tangible book value per share as of September 30, 2021. Furthermore, if the underwriters exercise their option to purchase additional shares, if outstanding stock options are exercised, if we issue awards to our employees under our equity incentive plans, or if

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock subsequent to the completion of this offering, in adverse publicity or in other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of our indices, including the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Also in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of our indices. Under such announced policies, the dual class structure of our stock would make it ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to track those indices would not invest in our Class A common stock. These policies are relatively new and it is unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from such indices, but it is possible they may depress valuations, compared to similar companies that are included. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

The restated certificate and restated bylaws, to become effective at the closing of this offering, and Delaware law contain or will contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors. Among other things, the restated certificate and/or our bylaws will include the following provisions:

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding Class A common stock and Class B common stock, from engaging in certain business

Any provision of our restated certificate and restated bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.

Our restated certificate of incorporation, which will become effective prior to the completion of this offering, will provide that, unless we consent in writing to the selection of an alternative forum, the (a) Court of Chancery (“Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action, suit or proceeding brought on our behalf; (ii) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, stockholders, employees or agents to us or to our stockholders; (iii) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, the restated certificate or restated bylaws; or (iv) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (b) subject to the foregoing, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, such forum selection provisions shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in the restated certificate to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, our restated certificate and restated bylaws will provide that the federal district courts of the United States of America shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

These exclusive forum provisions may (i) increase the costs for an investor and/or (ii) limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find either exclusive forum provision in our restated certificate to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition, and results of operations.

If our existing stockholders sell substantial amounts of our Class A common stock in the public market following this offering, the market price of our Class A common stock could decrease significantly. The perception in the public market that our existing stockholders might sell shares of Class A common stock could also depress our market price. Our executive officers and directors and certain of our stockholders are subject to the lock-up agreements described under “Underwriting” and the Rule 144 holding period requirements described under “Shares Eligible for Future Sale.” After these lock-up periods have expired, the holding periods have elapsed and, in the case of restricted stock, the shares have vested, additional shares will be eligible for sale in the public market. The market price of shares of our Class A common stock may drop significantly when the restrictions on resale by our existing stockholders lapse. A decline in the price of shares of our Class A common stock might impede our ability to raise capital through the issuance of additional shares of our Class A common stock or other equity securities.

In addition, following the expiration of the lock-up agreements referred to above, certain stockholders will be entitled, under our investors’ rights agreement, to require us to register shares owned by them for public sale in the United States. We also expect to file a registration statement to register shares reserved for future issuance under our equity compensation plans. As a result, subject to the satisfaction of applicable exercise periods and the expiration or waiver of lock-up agreements referred to above, the shares issued upon exercise of outstanding stock options will be available for immediate resale in the United States in the open market. Sales of our Class A common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales could also cause the trading price of our Class A common stock to fall and make it more difficult for you to sell shares of our Class A common stock.

Additionally, certain of our employees, executive officers, and directors may enter into Rule 10b5-1 trading plans providing for sales of shares of our Class A common stock from time to time. Under a Rule 10b5-1 trading plan, a broker executes trades pursuant to parameters established by the employee, director, or officer when entering into the plan, without further direction from the employee, officer, or director. A Rule 10b5-1 trading plan may be amended or terminated in some circumstances. Our employees, executive officers, and directors also may buy or sell additional shares outside of a Rule 10b5-1 trading plan when they are not in possession of material, nonpublic information, subject to the expiration of the lock-up agreements and Rule 144 requirements referred to above.

In the future, we may sell Class A common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner we determine from time to time. We expect to issue securities to employees and directors pursuant to our equity incentive plans. If we sell common stock, convertible securities, or other equity securities in subsequent transactions, or common stock is issued pursuant to equity incentive plans, our investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences, and privileges senior to those of holders of our common stock, including our Class A common stockholders.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the Nasdaq. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure

Our current controls and any new controls we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results, may result in a restatement of our financial statements for prior periods, cause us to fail to meet our reporting obligations, and could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in the periodic reports we will file with the SEC. However, while we remain an “emerging growth company,” we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our Class A common stock. We are not currently required to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, and we are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.

Upon becoming a public company, and particularly after we are no longer an “emerging growth company,” significant resources and management oversight will be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business, financial condition and operating results.

We are an “emerging growth company” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements and (iii) exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not approved previously. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this prospectus.

We could be an emerging growth company for up to five fiscal years following the completion of this offering. However, certain circumstances could cause us to lose that status earlier, including the date on which we are deemed to be a “large accelerated filer,” under applicable SEC rules, if we have total annual gross revenue of $1.07 billion or more, or if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Accordingly, our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an “emerging growth company” or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act, upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

As a public company, we will incur legal, accounting, and other expenses that we did not previously incur. We will become subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act, the listing requirements of the Nasdaq and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly after it is no longer an “emerging growth company.” The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business, financial condition, operating results, cash flows, and prospects. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert our management’s attention from implementing our growth strategy, which could prevent us from improving our business, financial condition, operating results, cash flows, and prospects. we have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. The measures we take, however, may not be sufficient to satisfy our obligations as a public company. Additionally, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage. These additional obligations could have a material adverse effect on our business, financial condition, operating results, cash flows, and prospects.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of our management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities in their application and practice, regulatory authorities may initiate legal proceedings against Basis, and there could be a material adverse effect on our business, financial condition, operating results, cash flows, and prospects.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could adversely affect our business, operating results, or financial condition. Additionally, the dramatic increase in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.

The trading market for our Class A common stock will depend in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price

This prospectus includes forward-looking statements regarding, among other things our plans, strategies and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “forecast,” “intend” “may,” “might,” “plan,” “possible,” “potential,” “project,” “scheduled,” “seek,” “should,” “will” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements contained in this prospectus include, but are not limited to, statements about the ability of Basis to:

In addition, statements of belief and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and 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 you are cautioned not to unduly rely upon these statements.

We estimate that the net proceeds from the sale of shares of our Class A common stock in this offering at an assumed initial public offering price of $       per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses, will be approximately $      million, or $     million if the underwriters exercise their option to purchase additional shares in full.

A $1.00 increase or decrease in the assumed initial public offering price of $     per share would increase or decrease, as applicable, the net proceeds that we receive from this offering by approximately $      million, assuming the number of shares of our Class A common stock offered by us remains the same, and after deducting the underwriting discounts and commissions. Similarly, each increase or decrease of 1.0 million shares in the number of shares of our Class A common stock offered by us would increase or decrease, as applicable, the net proceeds that we receive from this offering by approximately $       million, assuming that the assumed initial public offering price of $           remains the same, and after deducting the underwriting discounts and commissions.

We currently intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, for working capital and other general corporate purposes. We may also use a portion of the proceeds for the acquisition of, or investment in, technologies, solutions, or businesses that complement our business. However, we do not have agreements or commitments for any acquisitions or investments outside the ordinary course of business at this time. See the section titled “Use of Proceeds” for additional information.

We cannot specify with certainty the particular uses of the net proceeds that we will receive from this offering or the amounts we actually spend on the uses set forth above. Our management will have broad discretion in the application of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the proceeds.

Pending these uses, we intend to invest the net proceeds from this offering in short-term, investment-grade interest-bearing securities such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government.

We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Additionally, our ability to pay dividends or make distributions is limited by certain restrictions in connection with the Amended and Restated Credit Agreement. For additional information regarding the Amended and Restated Credit Agreement, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Line of Credit.”) Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant.

The following table sets forth cash and cash equivalents, as well as our capitalization, as of September 30, 2021 as follows:

The pro forma information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with our consolidated financial statements and related notes, and the sections titled “Summary Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

If the underwriters exercise their option to purchase additional shares in full, our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity (deficit), and capitalization outstanding as of September 30, 2021 would be $      million, $      million, $      million and     , respectively.

The number of shares of our Class A common stock and Class B common stock that will be outstanding after this offering is based upon         shares of our Class A common stock outstanding and         shares of our Class B common stock outstanding (after giving effect to the automatic conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of                       shares of our               common stock immediately prior to the completion of this offering), in each case, as of September 30, 2021, and excludes:

Our 2022 Plan and ESPP each provide for automatic annual increases in the number of shares reserved thereunder, and our 2022 Plan also provides for increases to the number of shares of our       common stock that may be granted thereunder based on shares under our 2011 Plan that expire, are forfeited, or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefits and Stock Plans.”

If you invest in our Class A common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the pro forma as adjusted net tangible book value per share of our Class A common stock immediately after this offering.

As of , 2021, our historical net tangible book value was $ million, or $ per share of our common stock. Our historical net tangible book value represents the amount of our total tangible assets less our total liabilities and convertible preferred shares. Historical net tangible book value per share represents historical net tangible book value divided by our common stock outstanding as of , 2021.

As of          , 2021, our pro forma net tangible book value was $          million, or $          per share of our            common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our            common stock outstanding as of           , 2021, after giving effect to (i) the automatic conversion of all outstanding shares of our convertible preferred stock into            shares of our               common stock and (ii) the filing and effectiveness of our restated certificate of incorporation that will become effective immediately prior to the completion of this offering.

After giving effect to the sale of shares of our Class A common stock in this offering at an assumed initial public offering price of $          per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses, our pro forma as adjusted net tangible book value as of          , 2021 would have been $          million, or $          per share. This represents an immediate increase in pro forma net tangible book value of $          per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $          per share to investors purchasing shares of our Class A common stock in this offering at the assumed initial public offering price.

The following table illustrates this dilution on a per share basis to new investors:

The dilution information discussed above is illustrative only and will change based on the actual initial offering price and other terms of this offering determined at pricing. A $1.00 increase or decrease in the assumed initial public offering price of $          per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share after this offering by $          per share and would increase or decrease, as applicable, the dilution per share to new investors in this offering by $          per share, assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions. Similarly, each increase or decrease of 1.0 million shares in the number of shares of Class A common stock offered would increase or decrease, as applicable, the pro forma as adjusted net tangible book value per share after this offering by $          per share and would increase or decrease the dilution to new investors by $          per share, assuming the assumed initial public offering price, which is the midpoint of the offering price range set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions. The pro forma as adjusted information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their option to purchase additional shares in full, the pro forma as adjusted net tangible book value per share of our Class A common stock after giving effect to this offering would be $            per share, and the dilution in pro forma as adjusted net tangible book value per share to investors in this offering would be $             per share.

The following table summarizes, on a pro forma as adjusted basis as of             , 2021, after giving effect to (i) the pro forma adjustments described above and (ii) the redesignation of our outstanding common stock as Class        common stock, the difference between existing stockholders and new investors purchasing shares of Class A common stock in this offering with respect to the number of shares purchased from us, the total consideration paid to us, and the average price per share paid by our existing stockholders or to be paid by investors purchasing shares in this offering at an assumed offering price of $          per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, before deducting the underwriting discounts and commissions and estimated offering expenses:

A $1.00 increase or decrease in the assumed initial public offering price of $          per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, total consideration paid by new investors and total consideration paid by all stockholders by approximately $          million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus remains the same and after deducting the underwriting discounts and commissions. We may also increase or decrease the number of shares we are offering. An increase or decrease of 1.0 million in the number of shares offered by us would increase or decrease, as applicable, total consideration paid by new investors by $         million, assuming that the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional shares. If the underwriters’ option to purchase additional shares is exercised in full, our existing stockholders would own % and our new investors would own % of the total number of shares of our Class A common stock outstanding upon completion of this offering.

In addition, to the extent we issue any additional stock options or any outstanding stock options or warrants are exercised, or we issue any other securities or convertible debt in the future, investors will experience further dilution.

The foregoing tables and calculations (other than the historical net tangible book value calculation) are based upon              shares of our Class A common stock outstanding and         shares of our Class B common stock outstanding (after giving effect to the automatic conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of                        shares of our                     common stock immediately prior to the completion of this offering), in each case, as of September 30, 2021, and excludes:

Our 2022 Plan and ESPP each provide for automatic annual increases in the number of shares reserved thereunder, and our 2022 Plan also provides for increases to the number of shares of our       common stock that may be granted thereunder based on shares under our 2011 Plan that expire, are forfeited, or otherwise repurchased by us, as more fully described in the section titled “Executive Compensation—Employee Benefits and Stock Plans.”

Basis Global Technologies is a leading provider of cloud-based workflow automation and business intelligence software for marketing and advertising functions within enterprises. Our internally-developed SaaS platform is composed of a suite of integrated applications that automate manual operations, standardize business processes, and improve marketing and advertising performance. We provide customers a comprehensive selection of unique buying methods across all media channels and devices, utilizing all major creative types and formats. Our software creates a single system of record, seamless team collaboration, and actionable data-driven insights yielding material gains in productivity and increased profitability its users.

Our diverse base of customers ranges from mid-market advertising agencies and holding company’s to Fortune 500 global brands. Our customers choose between our Managed Activation and Self-Service solutions, depending on specific needs. Through our Managed Activation business, our dedicated team of digital media experts utilize our comprehensive software platform to support our customers across the digital advertising life cycle, including campaign strategy and execution, data management, and industry-focused training and education. Our Self-Service offering includes our workflow automation software and media purchase execution capabilities, which is used directly by marketers and their advertising agencies to centralize the planning, buying, measurement, reporting, and billing of advertising activities across programmatic and traditional channels.

Developed in 2007 as an internal-use solution, our workflow automation software was originally utilized by our Managed Activation team to provide media buying support to our customers. We subsequently introduced the workflow automation software as an independent software offering in 2018, allowing users to benefit directly from the same platform used by our Managed Activation team. As a centralized solution, the workflow automation software eliminates the need for multiple, disparate point-solutions that otherwise create separation between internal activation teams. Our workflow automation software’s integration with over 100 third party technology vendors allows us to provide a frictionless experience and enhanced collaboration across siloed teams.

Our users benefit from cleaner data and improved line-of-sight into holistic advertising campaign performance leading to improved return on ad spend, while also providing insights into operational performance and improvements that lead to greater profitability for their businesses.

We generate revenue through two complementary segments, Managed Activation and Self-Service.

Our Self-Service and Managed Activation solutions are tailored to address our customers varying degrees of resources, capabilities, and domain expertise to manage and optimize their digital media investments. While our easy-to-use Self-Service solution is the platform of choice for our customers with adequate in-house capabilities, many of our customers seek to fill their capability gaps and enjoy the benefits of our workflow automation software through our high-touch Managed Activation service offerings. Each of our solutions has its own pricing model tailored to our customers’ specific needs.

Our Managed Activation segment generates revenue primarily by utilizing our workflow automation software to plan, buy, and execute digital advertising campaigns for our customers. Our dedicated team of digital media experts provide our customers with digital advertising campaign strategy and execution services. We provide these services using the same workflow automation software offered by our Self-Service segment. Under this model, our customers benefit from the centralized, data driven structure of the workflow automation software in a managed service environment. Customers often use our Managed Activation services before transitioning to our Self-Service solution. As these customers develop internal employees, they will often transition these services in house while continuing to rely on the workflow automation software.

We earn revenue based on the number of impressions delivered on behalf of our customers, and revenue is presented on a gross basis inclusive of traffic acquisition costs, with customer agreements ranging from month-to-month to multi-year arrangements. Our agreements with Managed Activation customers typically include termination rights allowing customers to cancel the insertion order with advance notice prior to delivery.

Through our Self-Service segment, we provide customers direct access to the same workflow automation software used by our Managed Activation team members. Using the workflow automation software, our customers are able to directly plan their media campaigns and perform programmatic and traditional media buying, communicate and contract with vendors, monitor campaign performance and analytics, and complete advertising campaign financial reconciliations in a self-service environment. Self-Service revenue, which is recognized net of traffic acquisition costs incurred and payable to suppliers, primarily consists of platform fees charged to customers based on advertising inventory purchases placed through the workflow automation software, with customer agreements typically ranging from one year to multi-year arrangements. Our agreements with Self-Service customers include termination rights after the first 90 days of the agreement and generally do not include long-term obligations requiring customers to use our platform.

Marketers and advertisers use the workflow automation software to deliver advertising campaigns that reach their most valued consumers. Through platform integrations and direct relationships, we enable customer access to both biddable and non-biddable inventory across devices, channels, and formats throughout North America, LATAM and the EU. The workflow automation software supports a full range of transaction types including real time bidding over open exchanges, private marketplace, and direct-to-publisher, allowing customers to quickly and easily assess pricing variations across transaction types to source the inventory from publishers that best fit our customers’ objectives.

There are a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth. These factors include:

We believe the complexity and challenges of executing and managing digital advertising campaigns have grown exponentially over time. Our customers are constantly discovering new digital advertising channels, increasing their need for new technologies, specialized talent, and analytics to monitor return on ad spend in an increasingly complex environment. The ad hoc introduction and adoption of new technologies in response to these new advertising channels often results in a patchwork of incompatible and disparate systems, challenging an advertisers’ ability to effectively plan, execute, and monitor advertising campaigns. Our Self-Service and Managed Activation offerings directly address these challenges, providing customers with a holistic and integrated solution to plan and manage their digital advertising strategy.

Our customers include many of the largest digital advertisers in the world. Over time, we have continued to expand on our existing customer relationships, as exhibited by our increasing Self-Service net dollar retention rates of 118% and 96% in the years ended December 31, 2020 and 2019, respectively. Our Self-Service net dollar retention rate as of September 30, 2021 increased to 169%, representing a year-over-year increase of 69 percentage points from the Self-Service net dollar retention rate of 100% as of September 30, 2020. Our net dollar retention rate is an indicator of customer utilization of our products and services. Retention rates above 100% indicate that our existing customers find benefit in utilizing our products and services, and may push additional marketing spend through our solutions in the future.

We believe that we will be able to continue expanding on our existing customer relationships as they increase their spend on digital advertising and as we introduce new solutions in the future across key channels, formats, devices and geographies. Our long-term vision is aimed at adding functionality to our workflow automation software and service offerings to address the increasingly complex needs of our customers with a single easy-to-use solution to drive their digital advertising strategies.

Programmatic advertising is the use of software and algorithms to match buyers and sellers of digital advertising in a technology-driven marketplace. It is becoming increasingly prominent in the digital advertising industry, as bids/asks for digital ad inventory can be completed in an efficient and automated manner. Programmatic ad buyers and trading platforms benefit from consistent access to quality inventory and data to improve purchasing decisions and increase return on ad spend. We believe advertisers value having a single data source to leverage when making real-time decisions on programmatic ad placements across all channels and formats. Programmatic advertising continues to grow as the preferred transactional channel within digital media activation, with global programmatic advertising spend expected to grow at a 14% compound annual growth rate between 2020 and 2025, increasing from $134 billion in 2020 to $262 billion in 2025, according to IDC.

Brands, agencies, and publishers continue to face pressure to become more strategic, creative, and innovative in order to capture consumer attention through paid media. The media buying process is a complex task, often involving dozens of teams and several third-party vendors to manage the end-to-end process. According to a 2016 Digiday report commissioned by us, a approximately half of media professionals are switching between software platforms more than eleven times per day and approximately a quarter are switching between platforms more than 21 times per day. These various stages and constituents create natural inefficiencies causing advertisers to seek solutions that improve daily output. The advertising buying industry is keen for further automation and digital transformation within the enterprise. Growing customer utilization of our workflow automation software has facilitated the growth of our Self-Service revenue of 74% and 24% in the years ended December 31, 2020 and 2019, respectively, and 94% and 43% for the nine months ended September 30, 2021 and 2020, respectively.

We believe that the advertising market is in the early stages of a secular shift towards programmatic advertising. We plan to invest for long-term growth. We anticipate that our operating expenses and software capitalization will increase in the foreseeable future as we invest in technology and development to enhance our product capabilities to acquire new customers and increase our customers’ usage of our platform. To the extent we may be able to grow the business into new geographies or acquire new technologies, we may also pursue strategic acquisitions in the future. In February 2021, we acquired certain assets of QuanticMind, Inc., a provider of search engine marketing and marketing intelligence platforms, which has strengthened our search engine marketing capabilities.

We believe that these investments will contribute to our long-term growth, although they may have a negative impact on our profitability in the near-term.

We experience fluctuations in revenue that coincide with seasonal fluctuations in the digital ad spending of our customers. Advertisers typically allocate the largest portion of their media budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing. As a result, the fourth quarter of the year typically reflects our highest level of measurement activity, while the first quarter reflects the lowest level of such activity. We expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole. While our revenue is highly recurring, seasonal fluctuations in ad spend may impact quarter-over-quarter results.

Since January 2020, the outbreak of COVID-19 has evolved into a worldwide pandemic. We have modified our operations in line with our business continuity plans. As a result of the pandemic, we temporarily closed our offices globally, including our corporate headquarters in Chicago, and are currently operating with many staff members working remotely. On a regular basis, management is reviewing operations and with minimal interruptions in our customer facing operations related to the COVID-19 pandemic to date. We instituted temporary salary reductions in the second and third quarters of 2020 due to the COVID-19 pandemic. In the fourth quarter of 2020, normal salaries were reinstated and employees were made whole for any reductions in the second and third quarters.

To date, we have not experienced a material increase in customers' cancellations, requests for more favorable contractual terms, or concessions as a result of the pandemic. We have also not experienced a significant deterioration in the collectability of our receivables or a material negative impact from our vendors and third-party service providers.

While the impact of the pandemic on our business has been limited to date, our revenues are dependent on advertiser demand. The pandemic has resulted in market disruptions and a global economic slowdown, which has materially impacted demand for a broad variety of goods and services and is also disrupting sales channels and marketing activities. To the extent that demand for digital advertising declines, our results of operations and financial condition may be materially impacted. The duration of such disruptions remains uncertain. See "Risk Factors” for more information on risks and uncertainties that may impact our business and financial results.

We earn revenues through both our Managed Activation and Self-Service segments.

Cost of revenue consists of direct and indirect costs incurred to generate revenue. Direct costs incurred by our Managed Activation segment and classified within cost of revenue include traffic acquisition costs and costs to monitor and track delivery of advertising campaigns, in addition to cloud hosting costs. Direct costs incurred by our Self-Service segment that are reflected in cost of revenue consist entirely of cloud hosting costs, as Self-Service revenues are presented net of TAC in accordance with GAAP.

Indirect costs incurred by both our Managed Activation and Self-Service segments include personnel costs for individuals who provide customer support, including salaries, bonuses, share-based compensation, employee benefits costs, and commissions costs, as well as amortization expense from internal-use software.

Interest expense primarily consists of interest expense associated with our revolving line of credit (see “—Liquidity and Capital Resources” below).

Other (expense) income, net primarily consists of gains and losses from foreign currency exchange transactions, changes in fair value of our preferred stock warrant liability, and other miscellaneous expenses.

Income tax expense (benefit) primarily consists of federal, state, and foreign income taxes.

We define a customer to be a unique party from whom we have received a signed contract or an insertion order for ad placement and generated in aggregate at least $5 thousand in Revenue ex-TAC (as defined below) during the previous 12 months. Similarly, we define average Revenue-ex TAC per customer to be Revenue ex-TAC generated in the most recent 12 months divided by the number of customers. We believe these criteria best identify customers who actively use our set of solutions. We count agencies who work with multiple brands or brand divisions as one customer independent of the number of insertion orders they may enter into with the Company. Similarly, brands that have multiple sub-brands or divisions are also considered one customer.

We believe that our ability to increase our number of customers is an important indicator of our ability to grow Revenue ex-TAC over time. We believe that our number of customers is an indicator not only of our market penetration, but also of our potential for future growth as our customers often expand their adoption of our platform over time. Over time, we have generated an increasing amount of average Revenue ex-TAC per customer. As a result, fluctuations in the number of customers and changes in Revenue ex-TAC may not always have a direct correlation.

For our Managed Activation segment, the total number of customers decreased from 679 as of December 31, 2019 to 594 as of December 31, 2020. The decrease in customers was primarily driven by our focus to grow our market share with larger customers, which resulted in an increase in average Revenue ex-TAC per customer. From 2019 to 2020, our Managed Activation average Revenue ex-TAC per customer increased from $166 thousand to $193 thousand. For our Self-Service segment, the total number of customers increased from 430 as of December 31, 2019 to 487 as of December 31, 2020 as more customers adopted our workflow automation software. Average Revenue ex-TAC per customer within our Self-Service segment increased from $54 thousand as of December 31, 2019 to $80 thousand as of December 2020.

For our Managed Activation segment, the total number of customers decreased from 652 for the twelve months ended September 30, 2020 to 594 for the twelve months ended September 30, 2021. The decrease in customers was primarily driven by our focus to grow our market share with larger customers, which resulted in an increase in average Revenue ex-TAC per customer. For the twelve months ended September 30, 2020 compared to the twelve months ended September 30, 2021, our Managed Activation average Revenue ex-TAC per customer increased from $157 thousand to $246 thousand. For our Self-Service segment, the total number of customers increased from 507 for the twelve months ended September 30, 2020 to 593 for the twelve months ended September 30, 2021 as we continued to drive increased adoption of our platform through onboarding new customers as well as improving retention of existing customers. Average Revenue ex-TAC per customer within our Self-Service segment increased from $59 thousand for the twelve months ended September 30, 2020 to $101 thousand for the twelve months ended September 30, 2021.

In addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the below non-GAAP financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, operating results or future outlook.

The non-GAAP financial information below is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

We define Revenue ex-TAC as our revenue excluding traffic acquisition costs (“TAC”). Our traffic acquisition costs primarily consist of amounts incurred and payable to suppliers for the cost of advertising inventory, third-party data and other add-on features. We define Revenue ex-TAC Profit Margin as our GAAP Gross Profit as a percentage of Revenue ex-TAC. We use Revenue ex-TAC and Revenue ex-TAC Profit Margin as key measures to evaluate operating performance. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-over-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC and Revenue ex-TAC Profit Margin provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Revenue ex-TAC and Revenue ex-TAC Profit Margin have limitations as analytical tools, and you should not consider these metrics in isolation from or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are:

Because of these and other limitations, you should consider Revenue ex-TAC and Revenue ex-TAC Profit Margin alongside our GAAP financial results, including revenue and gross profit. The following table presents a

Revenue ex-TAC increased from $137.8 million for the year ended December 31, 2019 to $159.3 million for the year ended December 31, 2020 and increased from $95.4 million for the nine months ended September 30, 2020 to $149.8 million for the nine months ended September 30, 2021. The 57% increase in total Revenue ex-TAC for the first nine months of 2021 was primarily driven by increased demand to execute media buys on the workflow automation software within our Self-Service segment. Self-Service Revenue ex-TAC increased 94% for the nine months ended September 30, 2021 while Managed Activation Revenue ex-TAC increased 44% during the same period.

The adjustment for traffic acquisition costs when computing revenue ex-TAC decreased as a percentage of GAAP revenues in both 2020 and 2021, due to the overall mix of revenues between the Self-Service and Managed Activation revenues. Traffic acquisition costs as a percentage of total GAAP revenues decreased from 64% during 2019 to 59% for the year ended December 31, 2020, and from 61% for the nine months ended September 30, 2020 to 59% for the nine months ended September 30, 2021.

We define EBITDA as earnings before interest, taxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted for share-based compensation expense and impairments of long-lived assets.

In addition to the items noted above, our use of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as non-GAAP financial measures has limitations as an analytical tool, including the following:

The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable GAAP measure, for each of the periods indicated:

The following table sets forth our results of operations for each of the periods presented:

The following table sets forth the components of our results of operations for each of the periods presented as a percentage of revenues:

The following table presents consolidated revenues:

The increase in Self-Service revenues was partially offset by a decrease in Managed Activation revenues of $15.1 million due to the delay or reduction of digital advertising budgets for certain customers in connection with COVID-19 cost savings. Compared to our Self-Service segment, Managed Activation customers generally include more brands and stand-alone businesses. During 2020, the advertising budgets of these businesses were disproportionately impacted by the pandemic, resulting in a decrease to Managed Activation revenues. Conversely,

The following table presents consolidated cost of revenue:

Cost of revenue decreased $18.2 million, or 6%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. Within Managed Activation, we saw a $20.6 million decrease in our cost of revenue that was primarily due to the decrease in our service revenues generated by our Managed Activation segment, which resulted in a corresponding decrease in traffic acquisition costs as traffic acquisition costs are variable costs. Within Managed Activation, we also saw savings of $2.5 million related to decreased amortization and impairment expense for our internal-use software. Cost of revenue within Self-Service increased $2.4 million compared to the year ended December 31, 2019 primarily due to an increase of $1.7 million to cloud hosting costs.

The following table presents consolidated gross profit:

Gross profit increased $21.8 million, or 22%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. This increase was driven by the shift in revenue mix from our Managed Activation segment to our Self-Service segment, which historically provides for higher gross margins.

The following table presents sales and marketing expenses:

Sales and marketing expenses increased $5.9 million, or 12%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The increase primarily resulted from increases in personnel expenses of $9.3 million, mainly related to a $6.6 million increase in commissions expense due to higher Self-Service segment revenues, specifically new customer revenue, and overall a higher percentage of sellers achieving their fiscal year quotas in the year ended December 31, 2020 as compared to the year ended December 31, 2019.

The following table presents technology and development expenses:

Technology and development expenses increased $6.8 million, or 56%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. Compared to 2019, in 2020 our technology team had a greater focus on optimizing and increasing capacity of our system infrastructure as our customer base grows and moves up market. These activities, which generally do not qualify for capitalization, resulted in increased expenses during 2020. Specifically, personnel expenses for our technology and development team increased by $7.2 million, $4.4 million of which related to personnel costs incurred in 2020 that are not capitalizable and an increase in bonus expense due to higher overall revenues during the period. The increase was partially offset by decreases in other technology and development costs, including a $0.2 million reduction in amortization of internal use software.

The following table presents general and administrative expenses:

General and administrative expenses decreased $2.4 million, or 6%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease primarily resulted from a decrease in rent and other office expenses of $4.3 million. As a result of the COVID-19 pandemic, we were able to reduce spending on rent and other office expenses with substantially all staff working remotely. The decrease in rent and office expenses was partially offset by an increase in personnel expenses of $1.5 million, primarily driven by increased bonus expense due to higher overall revenues during the period. Other general and administrative expenses increased $0.9 million, primarily resulting from increases in our allowance for doubtful accounts offset by reductions in travel and entertainment, training, and recruiting costs.

Interest expense decreased $0.4 million, or 39%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease in interest expense primarily resulted from a lower effective interest rate following the June 2020 amendment to our revolving line of credit.

Other (expense) income, net decreased from $0.6 million of income (net) during the year ended December 31, 2019 to $0.6 million of expense (net) during the year ended December 31, 2020. The change primarily resulted from $0.5 million of sublease income recognized in 2019 that did not recur in 2020, and $0.4 million of expense related to an increase in the fair value of our preferred stock warrant liability in 2020 that did not occur in 2019.

Income tax expense increased $0.6 million, or 154%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The increase was primarily due to higher pre-tax income.

Adjusted EBITDA increased by $4.9 million, or 44%, from $11.2 million for the year ended December 31, 2019 to $16.1 million for the year ended December 31, 2020. The increase resulted primarily from a $21.8 million increase in our gross profit which was partially offset by a $10.3 million increase in cash operating expenses.

The increase in gross profit resulted primarily from a $18.7 million increase in Self-Service revenues which translated into a $16.3 million increase in gross profit. The increase in cash operating expenses resulted primarily from greater personnel expenses, specifically commissions of $7.3 million, salaries of $6.9 million, and bonus of $3.9 million.

Our Managed Activation segment operating results for the years ended December 31, 2020 and 2019 were as follows:

Revenue in our Managed Activation segment decreased $15.1 million, or 4%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease primarily resulted from the delay or reduction of digital advertising budgets for certain customers in connection with COVID-19 cost savings. Compared to our Self-Service segment, Managed Activation customers generally include more brands and stand-alone businesses. During 2020, the advertising budgets of these businesses were disproportionately impacted by the pandemic, resulting in a decrease to Managed Activation revenues. From 2019 to 2020, our Managed Activation average revenue ex-TAC per customer increased from $166 thousand to $193 thousand.

Cost of revenue in our Managed Activation segment decreased $20.6 million, or 7%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease resulted primarily from the decrease in our Managed Activation revenue. With decreased spend, there was a corresponding decrease of $17.9 million in traffic acquisition costs as these costs are variable. Traffic acquisition costs decreased more than revenues

Gross profit in our Managed Activation segment increased $5.5 million, or 7%, during the year ended December 31, 2020 compared to the year ended December 31, 2019.

Our Self-Service segment operating results for the years ended December 31, 2020 and 2019 were as follows:

Revenue in our Self-Service segment increased $18.7 million, or 74%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The increase in revenue was primarily driven by the adoption of our workflow automation software by new customers as well as higher utilization of our workflow automation software by existing customers. Average revenue ex-TAC per customer within our Self-Service segment increased from $54 thousand as of December 31, 2019 to $80 thousand as of December 2020.

Cost of revenue in our Self-Service segment increased $2.4 million, or 30%, during the year ended December 31, 2020 compared to the year ended December 31, 2019. The increase resulted primarily from hosting costs which increased $1.7 million, or 45%, during the year ended December 31, 2020 compared to the year ended December 31, 2019.

Gross profit in our Self-Service segment increased $16.3 million, or 94%, during the year ended December 31, 2020 compared to the year ended December 31, 2019.

The following table presents consolidated revenues:

Compared to our Self-Service segment, Managed Activation customers generally include more brands and stand-alone businesses. Through the first nine months of 2021, advertising budgets for our Managed Activation customers have benefited from a recovering and mostly healthy business environment, resulting in increased Managed Activation revenues. During the same period in 2020, customers in our Managed Activation segment experienced negative impacts to their businesses and advertising budgets due to the COVID-19 pandemic. Through the first nine months of 2021, our Self-Service segment continued to benefit from a remote working environment. Customers have increasingly recognized the need for a unified software platform to facilitate their digital advertising strategies. While some customers have returned to a more traditional office work environment in the second half of 2021, many remain working remotely, and we expect that we will continue to benefit from this trend in the future.

The following table presents consolidated cost of revenue:

Cost of revenue increased $67.7 million, or 38%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Within Managed Activation, we saw a $67.6 million increase in our cost of revenue that was primarily due to the increase in revenues generated by our Managed Activation segment, which resulted in a corresponding increase in traffic acquisition costs, as traffic acquisition costs are variable costs. Within Managed Activation, we also saw increased costs of $2.7 million in personnel expenses and $1.6 million in hosting expenses, which were partially offset by cost savings of $1.5 million related to decreased amortization expense for our internal-use software. Cost of revenue within Self-Service increased $0.1 million compared to the nine months ended September 30, 2020 primarily due to an increase of $0.8 million in personnel costs, which was partially offset by a decrease of $0.7 million cloud hosting costs. Hosting costs for our Self-Service segment decreased due to the refinement of our hosting cost allocation methodology between segments during the nine months ended September 30, 2021, which resulted in $2.0 million fewer hosting costs being allocated to the Self-Service segment during that period. This also resulted in $2.0 million more hosting costs being allocated to the Managed Activation segment during that same period.

The following table presents consolidated gross profit:

Gross profit increased $51.5 million, or 79%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was driven by the revenue growth in both our Managed Activation and Self-Service segments.

The following table presents sales and marketing expenses:

Sales and marketing expenses increased $11.2 million, or 34%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase primarily resulted from increases in personnel expenses of $10.7 million, mainly related to a $6.8 million increase in commissions expense due to higher Self-Service segment revenues from new customers and a higher percentage of sellers achieving their quotas, an increase in salary and benefits expenses of $2.7 million due to increased headcount and reinstated salaries, an increases in bonus expense of $0.5 million, as well as a $1.0 million increase in other marketing expenses during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. This increase was partially offset by a reduction in travel and entertainment expenses for sales and marketing personnel of $0.6 million.

The following table presents technology and development expenses:

Technology and development expenses increased $3.5 million, or 28%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Specifically, personnel expenses for our technology and development team increased by $4.0 million, which included an increase in bonus expenses of $1.9 million due to higher overall revenues during the period and increased salary expense of $1.8 million due to increased headcount and reinstated salaries. The increase was partially offset by decreases in other technology and development costs, including a $0.4 million reduction in amortization of internal use software.

The following table presents general and administrative expenses:

General and administrative expenses increased $8.4 million, or 29%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. As a result of the COVID-19 pandemic, we were able to reduce spending on rent and other office expenses by $0.8 million with substantially all of our employees working remotely. The decrease in rent and office expenses was offset by an increase in personnel expenses of $8.5 million, primarily driven by increased bonus expense due to higher overall revenues during the period and increased salary expense due to reinstatement of temporary salary reductions and increased headcount. Other general and administrative expenses increased $0.5 million, primarily resulting from increases in our professional fees and offset by reductions in bad debt expense and other depreciation.

Interest expense decreased $0.1 million, or 25%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The decrease in interest expense primarily resulted from a lower effective interest rate following the June 2020 amendment to our revolving line of credit.

Other (expense) income, net decreased from $0.3 million of expense (net) during the nine months ended September 30, 2020 to $0.1 million of expense (net) during the nine months ended September 30, 2021. The change primarily resulted from $0.1 million of early lease termination expense recognized in 2020.

Income tax expense (benefit) improved from $0.6 million of tax expense for the nine months ended September 30, 2020 to $7.9 million of income tax benefit for the nine months ended September 30, 2021. The increased tax benefit was primarily due to a valuation allowance of $13.0 million that was recorded against the gross deferred tax asset balance as of December 31, 2020. As of September 30, 2021, management determined that there was sufficient positive evidence to conclude that it is more likely than not that our deferred tax assets are realizable and released the valuation allowance accordingly.

Adjusted EBITDA increased by $26.9 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase resulted primarily from a $51.5 million increase in our gross profit which was partially offset by a $23.1 million increase in cash operating expenses.

The increase in gross profit resulted primarily from revenue growth in both our Managed Activation and Self-Service segments. The increase in cash operating expenses resulted primarily from greater personnel expenses, specifically commissions expense of $8.1 million, salary expense of $7.7 million, and bonus expense of $5.4 million.

Our Managed Activation segment operating results for the nine months ended September 30, 2021 and 2020 were as follows:

Revenue in our Managed Activation segment increased $95.8 million, or 44%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase primarily resulted from the delay or reduction of digital advertising budgets in 2020 for certain customers in connection with COVID-19-related cost savings. Compared to our Self-Service segment, Managed Activation customers generally include more brands and stand-alone businesses. During 2020, the advertising budgets of these businesses were disproportionately impacted by the pandemic, resulting in an increase to Managed Activation revenues in 2021. Average revenue ex-TAC per customer within our Managed Activation segment increased from $157 thousand as of September 30, 2020 to $246 thousand as of September 30, 2021.

Cost of revenue in our Managed Activation segment increased $67.6 million, or 40%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase resulted primarily from the increase in our Managed Activation revenue. With increased spend, there was a corresponding increase of $64.8 million in traffic acquisition costs as these costs are variable. We also saw savings of $1.5 million related to decreased amortization expense for our internal-use software. Hosting costs increased by $1.6 million and personnel costs included in cost of revenue increased by $2.7 million. Hosting costs for our Managed Activation segment increased due to the refinement of our hosting cost allocation methodology between segments during the nine months ended September 30, 2021, which resulted in $2.0 million more hosting costs being allocated to the Managed Activation segment during that period.

Gross profit in our Managed Activation segment increased $28.1 million, or 58%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Our Self-Service segment operating results for the nine months ended September 30, 2021 and 2020 were as follows:

Revenue in our Self-Service segment increased $23.4 million, or 94%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in revenue was primarily driven by the adoption of our workflow automation software by new customers as well as higher utilization of our workflow automation software by existing customers. Average revenue ex-TAC per customer within our Self-Service segment increased from $59 thousand as of September 30, 2020 to $101 thousand as of September 30, 2021.

Cost of revenue in our Self-Service segment increased $0.1 million, or 1%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase resulted primarily from personnel costs which increased $0.8 million, or 47% which was offset from hosting costs which decreased $0.7 million, or 17%, during the ninth months ended September 30, 2021 compared to the nine months ended September 30, 2020. Hosting costs for our Self-Service segment decreased due to the refinement of our hosting cost allocation methodology between segments during the nine months ended September 30, 2021, which resulted in $2.0 million fewer hosting costs being allocated to the Self-Service segment during that period.

Gross profit in our Self-Service segment increased $23.3 million, or 134%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The following table sets forth our unaudited quarterly consolidated statements of operations data for each of the five quarters in the period ended September 30, 2021. The information for each of these quarters has been prepared on a basis consistent with our audited annual consolidated financial statements appearing elsewhere in this prospectus and, in our opinion, includes all normal recurring adjustments necessary for the fair presentation of the financial information contained in those statements. The following unaudited consolidated quarterly financial data should be read in conjunction with our audited annual consolidated financial statements and the unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this prospectus. These quarterly results are not necessarily indicative of our operating results for a full year or any future period.