GTY Technology (GTYH) DEFA14AAdditional proxy soliciting materials

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.  )

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Filed by the Registrant ☒

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Filed by a Party other than the Registrant ☐

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Check the appropriate box:

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☐Preliminary Proxy Statement

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☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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☐Definitive Proxy Statement

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☐Definitive Additional Materials

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☒Soliciting Material under § 240.14a-12

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GTY Technology Holdings Inc.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Payment of Filing Fee (Check all boxes that apply):

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☐No fee required.

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☐Fee paid previously with preliminary materials.

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☐Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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EXPLANATORY NOTE

This Schedule 14A filing consists of a press release issued by GTY Technology Holdings Inc. (the “Company”) announcing its financial results for the quarter ended March 31, 2022 that includes disclosure regarding the proposed acquisition of the Company by GI Georgia Midco Inc. (“Parent”) and GI Georgia Merger Sub Inc. (“Merger Sub”) pursuant to the terms of an Agreement and Plan of Merger, dated April 28, 2022, by and among the Company, Parent and Merger Sub.

The press release was first used or made available on May 9, 2022.

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GTY Technology Holdings Announces First Quarter Financial Results

Annual recurring revenue of $54.8 million, up 24% year-over-year

Total first quarter revenue of $15.9 million, up 20% year-over-year

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(Boston, MA, May 9, 2022) – GTY Technology Holdings Inc. (Nasdaq: GTYH) (“GTY”), a leading vertical SaaS/Cloud solution provider for the public sector, today announced financial results for the first quarter ended March 31, 2022.

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“Our first quarter results mark a strong start to the year after record revenues in fiscal year 2021,” stated TJ Parass, CEO of GTY. “These results are a testament to our focused execution and the strong demand for our products as more and more public sector organizations are pushing to modernize and transform their operations. We are also pleased to have announced our potential acquisition by GI Partners, which we believe would support GTY to build on this momentum and unlock the next phase of growth for our company.”

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First Quarter 2022 Financial Highlights

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Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled “Use of Non-GAAP Financial Measures” and in the accompanying tables. All comparisons in this press release are year over year unless otherwise provided.

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First Quarter 2022 Highlights and Key Metrics

Additional information regarding our new customers, total customers and Annual Recurring Revenue and how each are calculated are included below.

Definitive Agreement with GI Partners

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On April 29, 2022, GTY announced that it had entered into a definitive agreement to be acquired by GI Partners for $6.30 per share. The transaction is expected to close in the third quarter of 2022, subject to customary closing conditions, including approval by GTY shareholders and receipt of regulatory approvals. Upon closing of the transaction, GTY would become a private company, and its common stock would no longer be listed on any public market.

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Cancellation of Earnings Conference Call and Suspension of Guidance

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In light of the announced transaction with GI Partners, GTY has cancelled its earnings conference call previously scheduled for May 9, 2022. In addition, the company will not be providing financial guidance for the second quarter of 2022 and is suspending its financial guidance for the full year 2022 as a result of the pending transaction.

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About GTY Technology Holdings Inc.

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GTY Technology Holdings Inc. (NASDAQ: GTYH) (“GTY”) brings leading public sector technology companies together to achieve a new standard in stakeholder engagement and resource management. Through its six business units, GTY offers an intuitive cloud-based suite of solutions for state and local governments, education institutions, and healthcare organizations spanning functions in procurement, payments, grant management, budgeting, and permitting: Bonfire provides strategic sourcing and procurement software to enable confident and compliant spending decisions; CityBase provides government payment solutions to connect constituents with utilities and government agencies; eCivis offers a grant management system to maximize grant revenues and track performance; Open Counter provides user-friendly software to guide applicants through complex permitting and licensing procedures; Questica offers budget preparation and management software to deliver on financial and non-financial strategic objectives; Sherpa provides public-sector budgeting software and consulting services.

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Additional Information and Where to Find It

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In connection with the proposed acquisition of GTY (the “Transaction”), GTY plans to file a proxy statement (the “Transaction Proxy Statement”) with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies to approve the Transaction. Promptly after filing the definitive Transaction Proxy Statement with the SEC, GTY will mail the definitive Transaction Proxy Statement and proxy card to each shareholder entitled to vote at the special meeting to consider the Transaction. SHAREHOLDERS ARE URGED TO READ THE TRANSACTION PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT GTY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain, free of charge, the preliminary and definitive versions of the Transaction Proxy Statement, any amendments or supplements thereto, and any other relevant documents filed by GTY with the SEC in connection with the Transaction at the SEC’s website (http://www.sec.gov). Copies of GTY’s definitive Transaction Proxy Statement, any amendments or supplements thereto, and any other relevant documents filed by GTY with the SEC in connection with the Transaction will also be available, free of charge, at GTY’s website (https://gtytechnology.com/about/investor-materials) or by writing to GTY, Attention: Investor Relations, 800 Boylston Street, 16th Floor, Boston, Massachusetts, 02199.

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Participants in the Solicitation

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GTY, its directors and certain executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the Transaction. Additional information regarding such participants, including their direct or indirect interests, by security holdings or otherwise, will be included in the Transaction Proxy Statement and other relevant documents to be filed with the SEC in connection with the Transaction. Information about GTY’s directors and executive officers and their ownership of GTY’s common shares is set forth in the definitive proxy statement for GTY’s 2022 annual meeting of shareholders filed with the SEC on April 28, 2022. Free copies of these documents may be obtained as described in the preceding paragraph.

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Forward-Looking Statements

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This release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The company’s actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the company’s expectations with respect to future performance or the Transaction, including the expected timing of the closing of the Transaction; considerations taken into account by GTY’s Board of Directors in approving the Transaction; and expectations for GTY following the closing of the Transaction. These forward-looking statements involve significant risks and uncertainties

that could cause the actual results to differ materially from the expected results. Most of these factors are outside of the company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the impact of public health crises, epidemics and pandemics such as the COVID-19 pandemic on our operations, our customers and the economy, including the duration, spread and severity of such crises, and variants, vaccinations, treatments, testing, and recurrences; (2) the costs of acquisitions and the risk that the ongoing integration of the businesses acquired in our business combination and any subsequent acquisitions disrupts current plans and operations; (3) the ability to fully recognize the anticipated benefits of the business combination and any subsequent acquisitions, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably; (4) the ability to attract, retain, and motivate its key employees and, if they depart, to recruit, hire, and motivate replacements with comparable or better knowledge, skills and abilities; (5) our failure to generate sufficient cash flow from our business to make payments on our debt; (6) our ability to raise or borrow additional funds on acceptable terms; (7) changes in applicable laws or regulations and the adoption of new accounting standards, statements, and interpretations; (8) legal proceedings and investigations that could harm our business, including those relating to former special purpose acquisition companies; (9) the possibility that the company may be adversely affected by other economic, business or competitive factors, including inflation; (10) the possibility that the conditions to the closing of the Transaction are not satisfied, including the risk that required approvals from GTY’s shareholders for the Transaction or required regulatory approvals to consummate the Transaction are not obtained; (11) potential litigation relating to the Transaction; (12) uncertainties as to the timing of the consummation of the Transaction; (13) the ability of each party to consummate the Transaction; (14) possible disruption related to the Transaction to GTY’s current plans and operations, including through the loss of customers and employees; and (15) other risks and uncertainties included in our Annual Report on Form 10-K for the year ended December 31, 2021 and our subsequent filings with the Securities and Exchange Commission. We caution you that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by applicable securities laws.

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Use of Non-GAAP Financial Measures

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To supplement its condensed consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, GTY has provided in this release certain financial measures that have not been prepared in accordance with GAAP defined as “non-GAAP financial measures,” which include (i) non-GAAP revenues, (ii) non-GAAP gross profit and non-GAAP gross margin, (iii) and non-GAAP loss from operations.

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GTY’s management uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to the corresponding GAAP measures, in evaluating GTY’s ongoing operational performance and trends. However, it is important to note that particular items GTY excludes from, or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP financial measures has been provided in the tables included as part of this press release.

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

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

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Non-GAAP Loss From Operations. Non-GAAP loss from operations is defined as GAAP loss from operations adjusted for the impact of purchase accounting to revenues resulting from its business combination, the amortization of acquired

intangible assets, share-based compensation, acquisition related costs, goodwill impairment expense, restructuring expenses and the change in fair value of contingent consideration. The company believes that presenting non-GAAP loss from operations is useful to investors as it eliminates the impact of certain non-cash and acquisition related expenses to allow a direct comparison of loss from operations between periods.

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

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Operating Metrics

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We define the number of customers as the number of accounts with a unique account identifier for which we have an active contract in the period indicated. New customers have signed a new contract with a GTY entity in the period.

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We define ARR as the annualized revenue run-rate of subscription, maintenance or transaction-based agreements from all customers at a point in time. For transaction based CityBase contracts we use the following calculation: For large projects (>$10K per month) with 12 months or more of history we use the trailing 12 months of history. For large projects with less than 12 months, we calculate an annualized value based on history available. For small projects (<$10K per month) we annualize the most recent month’s activity.

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Average ARR per customer is calculated by dividing total ARR at the end of the period by the number of customers at the end of the period.

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Exhibit 1

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GTY Technology Holdings Inc.

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

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Exhibit 2

Reconciliations of non-GAAP Financial Measures

(in thousands)

(unaudited)

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Exhibit 3

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GTY Technology Holdings Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

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Exhibit 4

GTY Technology Holdings Inc.

Condensed Statement of Cash Flows

(in thousands)

(unaudited)

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Company Contacts:

Investor Relations

ir@gtytechnology.com

1-877-465-3200