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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _______ to _______

Commission file number 001-38825
LIVEVOX HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
82-3447941
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)

655 Montgomery Street, Suite 1000, San Francisco, CA 94111
(Address of principal executive offices) (Zip Code)
(415) 671-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareLVOXThe Nasdaq Stock Market LLC
Redeemable Warrants, each whole Warrant exercisable to purchase one share of Class A common stock at an exercise price of $11.50LVOXWThe Nasdaq Stock Market LLC
Units, each consisting of one share of Class A common stock and one-half of one redeemable WarrantLVOXUThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-Accelerated filerSmaller reporting company
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes      No  ☒
As of August 5, 2022, the registrant had 99,872,358 shares of Class A common stock, par value $0.0001 per share, issued and outstanding.


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TABLE OF CONTENTS
 
 Page
 
Item 1A. Risk Factors

i

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This quarterly report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of present or historical fact included in this Quarterly Report, regarding the future financial performance of LiveVox Holdings, Inc. (“LiveVox” or the “Company”), as well as LiveVox’s strategy, future operations, future operating results, financial position, expectations regarding revenue, losses, and costs, prospects, plans and objectives of management are forward-looking statements. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report are subject to risks and uncertainties that may include, for example:

the business, operations and financial performance of the Company, including market conditions and global and economic factors beyond the Company’s control, such as a tight labor market and the invasion of Ukraine by Russia;
the impact of COVID-19 and related changes in base interest rates, constraints in supply chain, inflationary pressures and significant market volatility in the Company’s business, our industry and the global economy;
the high level of competition in the cloud contact center industry and the intense competition and competitive pressures from other companies in the industry in which the Company operates;
the effect of legal, tax and regulatory changes;
the Company’s ability to maintain its listing on The Nasdaq Stock Market LLC (“Nasdaq”), including its ability to comply with the requirement that the bid price for the Class A common stock be above $1,00 for 30 consecutive trading days;
the Company’s ability to raise financing or complete acquisitions in the future;
the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors;
the future financial performance of the Company;
the outcome of any legal proceedings that may be instituted against the Company;
reliance on information systems and the ability to properly maintain the confidentiality and integrity of data;
the occurrence of cyber incidents or a deficiency in cybersecurity protocols; and
the ability to obtain third-party software licenses for use in or with the Company’s products.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other risk factors included herein. Forward-looking statements reflect current views about LiveVox’s plans, strategies and prospects, which are based on information available as of the date of this Quarterly Report. Except to the extent required by applicable law, LiveVox undertakes no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking statements whether as a result of new information, future events or otherwise.
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PART I—FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
LIVEVOX HOLDINGS, INC.
Consolidated Balance Sheets
(In thousands, except per share data)
As of
June 30, 2022December 31, 2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$29,873 $47,217 
Restricted cash, current100 100 
Marketable securities, current47,220 7,226 
Accounts receivable, net18,524 20,128 
Deferred sales commissions, current2,885 2,691 
Prepaid expenses and other current assets4,068 6,151 
Total Current Assets102,670 83,513 
Property and equipment, net3,207 3,010 
Goodwill47,481 47,481 
Intangible assets, net18,320 20,195 
Operating lease right-of-use assets5,221 5,483 
Deposits and other406 664 
Marketable securities, net of current 42,148 
Deferred sales commissions, net of current6,965 6,747 
Deferred tax asset, net89  
Total Assets$184,359 $209,241 
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$6,081 $6,490 
Accrued expenses10,208 13,855 
Deferred revenue, current1,142 1,307 
Term loan, current701 561 
Operating lease liabilities, current1,890 1,946 
Finance lease liabilities, current25 26 
Total current liabilities20,047 24,185 
Long term liabilities:
Deferred revenue, net of current452 456 
Term loan, net of current54,092 54,459 
Operating lease liabilities, net of current3,729 4,046 
Finance lease liabilities, net of current 11 
Deferred tax liability, net 2 
Warrant liability283 767 
Other long-term liabilities338 337 
Total liabilities78,941 84,263 
Commitments and contingencies (Note 9 and 21)
Stockholders’ equity:
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Preferred stock, $0.0001 par value per share; 25,000 shares authorized and none issued and outstanding as of June 30, 2022 and December 31, 2021.
  
Common stock, $0.0001 par value per share; 500,000 shares authorized and 91,547 shares issued and outstanding as of June 30, 2022; 500,000 shares authorized and 90,697 shares issued and outstanding as of December 31, 2021.
9 9 
Additional paid-in capital259,053 253,468 
Accumulated other comprehensive loss(1,855)(477)
Accumulated deficit(151,789)(128,022)
Total stockholders’ equity105,418 124,978 
Total liabilities & stockholders’ equity$184,359 $209,241 
    
The accompanying notes are an integral part of these consolidated financial statements.
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LIVEVOX HOLDINGS, INC.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited) (In thousands, except per share data)
For the three months ended June 30,For the six months ended June 30,
2022202120222021
Revenue$32,987 $28,913 $65,080 $56,858 
Cost of revenue12,548 21,615 26,180 32,795 
Gross profit20,439 7,298 38,900 24,063 
Operating expenses
Sales and marketing expense14,970 27,685 29,622 36,593 
General and administrative expense7,546 24,637 15,014 29,517 
Research and development expense8,167 30,169 16,657 36,349 
Total operating expenses30,683 82,491 61,293 102,459 
Loss from operations(10,244)(75,193)(22,393)(78,396)
Interest expense, net744 941 1,494 1,885 
Change in the fair value of warrant liability(92)(375)(484)(375)
Other expense, net113 32 49 25 
Total other expense, net765 598 1,059 1,535 
Pre-tax loss(11,009)(75,791)(23,452)(79,931)
Provision for (benefit from) income taxes(229)52 315 87 
Net loss$(10,780)$(75,843)$(23,767)$(80,018)
Comprehensive loss
Net loss$(10,780)$(75,843)$(23,767)$(80,018)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment(153)(25)(202)14 
Net unrealized loss on marketable securities(288) (1,176) 
Total other comprehensive income (loss), net of tax(441)(25)(1,378)14 
Comprehensive loss$(11,221)$(75,868)$(25,145)$(80,004)
Net loss per share
Net loss per share—basic and diluted$(0.12)$(1.08)$(0.26)$(1.17)
Weighted average shares outstanding—basic and diluted91,562 69,945 91,520 68,291 
The accompanying notes are an integral part of these consolidated financial statements.
 

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LIVEVOX HOLDINGS, INC.
Consolidated Statements of Stockholders’ Equity
(Unaudited) (In thousands)

Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
SharesAmount
Balance at December 31, 20201$ $59,175 $(206)$(24,828)$34,141 
Retroactive application of reverse recapitalization66,6367 (7)— —  
Balance at December 31, 2020, as converted66,637$7 $59,168 $(206)$(24,828)$34,141 
Foreign currency translation adjustment— — 39 — 39 
Stock-based compensation— 139 — — 139 
Net loss— — — (4,175)(4,175)
Balance at March 31, 202166,637$7 $59,307 $(167)$(29,003)$30,144 
Merger and PIPE financing20,4482 190,397 — — 190,399 
Foreign currency translation adjustment— — (25)— (25)
Stock-based compensation— 139 — — 139 
Net loss— — — (75,843)(75,843)
Balance at June 30, 202187,085$9 $249,843 $(192)$(104,846)$144,814 

Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
SharesAmount
Balance at December 31, 202190,697$9 $253,468 $(477)$(128,022)$124,978 
Foreign currency translation adjustment— — (49)— (49)
Net unrealized loss on marketable securities— — (888)— (888)
Stock-based compensation— 2,479 — — 2,479 
Net loss— — — (12,987)(12,987)
Balance at March 31, 202290,697$9 $255,947 $(1,414)$(141,009)$113,533 
Gross issuance of shares upon vesting of stock-based awards1,055— — — — — 
Shares withheld to cover employees’ withholding taxes for stock-based awards(205)— (317)— — (317)
Foreign currency translation adjustment— — (153)— (153)
Net unrealized loss on marketable securities— — (288)— (288)
Stock-based compensation— 3,423 — — 3,423 
Net loss— — — (10,780)(10,780)
Balance at June 30, 202291,547$9 $259,053 $(1,855)$(151,789)$105,418 
The accompanying notes are an integral part of these consolidated financial statements.
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LIVEVOX HOLDINGS, INC.
Consolidated Statements of Cash Flows
(Unaudited) (Dollars in thousands)
For the six months ended June 30,
20222021
Operating activities:
Net loss$(23,767)$(80,018)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization556 962 
Amortization of identified intangible assets1,875 2,244 
Amortization of deferred loan origination costs54 72 
Amortization of deferred sales commissions1,507 832 
Non-cash lease expense931 801 
Stock-based compensation expense5,902 278 
Equity incentive bonus 68,674 
Bad debt expense402 22 
Deferred income tax benefit(91)(230)
Loss on sale of marketable securities42  
Amortization of premium paid on marketable securities246  
Change in the fair value of the warrant liability(484)(375)
Offering cost associated with Warrants recorded as liabilities 41 
Changes in assets and liabilities
Accounts receivable1,203 (1,358)
Other assets2,340 (807)
Deferred sales commissions(1,919)(1,609)
Accounts payable(409)1,362 
Accrued expenses(3,647)218 
Deferred revenue(169)(33)
Operating lease liabilities(990)(724)
Other long-term liabilities (1)
Net cash used in operating activities(16,418)(9,649)
Investing activities:
Purchases of property and equipment(772)(604)
Purchases of marketable securities(5,413) 
Proceeds from sale of marketable securities3,451  
Proceeds from maturities and principal paydowns of marketable securities2,652  
Proceeds from asset acquisition, net of cash paid 1,326 
Net cash provided by (used in) investing activities(82)722 
Financing activities:
Proceeds from Merger and PIPE financing, net of cash paid 157,383 
Repayment on loan payable(280)(1,536)
Repayment of drawdown on line of credit (4,672)
Repayments on finance lease obligations(13)(242)
Payment of employees’ withholding taxes on net share settlement of share-based awards(317) 
Net cash provided by (used in) financing activities(610)150,933 
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Effect of foreign currency translation(234)(49)
Net increase (decrease) in cash, cash equivalents and restricted cash(17,344)141,957 
Cash, cash equivalents, and restricted cash beginning of period47,317 19,566 
Cash, cash equivalents, and restricted cash end of period$29,973 $161,523 

For the six months ended June 30,
20222021
Supplemental disclosure of cash flow information:
Interest paid$1,626 $1,805 
Income taxes paid247 175 
Supplemental schedule of noncash investing activities:
Change in unrealized loss on marketable securities$1,177 $ 
Additional right-of-use assets617 3,246 
Contingent consideration in asset acquisition 7,000 

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets (dollars in thousands):

As of June 30,
20222021
Cash and cash equivalents$29,873 $161,423 
Restricted cash, current100  
Restricted cash, net of current 100 
Total cash, cash equivalents and restricted cash$29,973 $161,523 
The accompanying notes are an integral part of these consolidated financial statements.
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
1.    Organization
LiveVox Holdings, Inc. (formerly known as Crescent Acquisition Corp (“Crescent”)), and its subsidiaries (collectively, the “Company,” “LiveVox,” “we,” “us” or “our”) is engaged in the business of developing and marketing a cloud-hosted Contact Center as a Service (CCaaS”) customer engagement platform that leverages microservice technology to rapidly innovate and scale digital engagement functionality that also incorporates the capabilities of fully integrated omnichannel customer connectivity, multichannel enabled Customer Relationship Management and Workforce Optimization applications. LiveVox’s customers are located primarily in the United States. LiveVox’s services are used to initiate and manage customer contact campaigns primarily for companies in the accounts receivable management, tele-sales and customer care industries.
On June 18, 2021 (the “Closing Date” or “Closing”), Crescent, a Delaware corporation, consummated the business combination pursuant to an Agreement and Plan of Merger, dated January 13, 2021 (the “Merger Agreement”), by and among Crescent, Function Acquisition I Corp, a Delaware corporation and direct, wholly owned subsidiary of Crescent (“First Merger Sub”), Function Acquisition II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Crescent (“Second Merger Sub”), LiveVox Holdings, Inc., a Delaware corporation (“Old LiveVox”), and GGC Services Holdco, Inc., a Delaware corporation, solely in its capacity as the representative, agent and attorney-in-fact (in such capacity, the “Stockholder Representative”) of LiveVox TopCo, LLC (“LiveVox TopCo”), a Delaware limited liability company and the sole stockholder of Old LiveVox as of immediately prior to Closing (the “LiveVox Stockholder”). Pursuant to the Merger Agreement, a business combination between Crescent and Old LiveVox was effected through (a) the merger of First Merger Sub with and into Old LiveVox, with Old LiveVox continuing as the surviving corporation (the “First Merger”) and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Old LiveVox with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity (the “Second Merger”, and collectively with the other transactions described in the Merger Agreement, the “Merger”). On the Closing Date, Crescent changed its name to “LiveVox Holdings, Inc.” and Second Merger Sub changed its name to “LiveVox Intermediate LLC”.
On June 22, 2021, the Company’s ticker symbols on The Nasdaq Stock Market LLC (“Nasdaq”) for its Class A common stock, warrants to purchase Class A common stock and public units were changed to “LVOX”, “LVOXW” and “LVOXU”, respectively.
LiveVox, Inc. was a direct, wholly owned subsidiary of Old LiveVox prior to the Merger and is a wholly owned subsidiary of the Company after the Merger. LiveVox, Inc. was first incorporated in Delaware in 1998 under the name “Tools for Health” and in 2005 changed its name to “LiveVox, Inc.” On March 21, 2014, LiveVox, Inc. and its subsidiaries were acquired by Old LiveVox. The principal United States operations of the Company are located in San Francisco, California; Columbus, Ohio and Atlanta, Georgia. The Company has four main operating subsidiaries: LiveVox Colombia SAS which is wholly owned with an office located in Medellin, Colombia, LiveVox Solutions Private Ltd with an office located in Bangalore, India, Speech IQ, LLC located in Columbus, Ohio, and Engage Holdings, LLC (d/b/a BusinessPhone.com) (“BusinessPhone.com”) located in Columbus, Ohio. Additionally, the Company has a wholly owned subsidiary, LiveVox International, Inc., that is incorporated in Delaware. The Company and LiveVox International, Inc. own 99.99% and 0.01%, respectively, of LiveVox Solutions Private Ltd.

2.    Summary of Significant Accounting Policies
 
a)    Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations or if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on March 11, 2022. The information as of December 31, 2021 included in the consolidated balance sheets was derived from those audited consolidated financial statements.
Pursuant to Accounting Standards Codification (“ASC”) 805, Business Combinations, the Merger completed on June 18, 2021 was accounted for as a reverse recapitalization, rather than a business combination, for financial accounting and reporting purposes. Accordingly, Old LiveVox was deemed the accounting acquirer (and legal acquiree) and Crescent was treated as the
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of Old LiveVox issuing stock for the net assets of Crescent, accompanied by a recapitalization. The net assets of Crescent are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Merger are those of Old LiveVox. The shares and corresponding capital amounts and earnings per share available for common stockholders in the accompanying consolidated financial statements and these related notes, prior to the Merger, have been retroactively restated as shares reflecting the exchange ratio established in the Merger Agreement.
In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. All intercompany transactions and balances have been eliminated in consolidation. Results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the full annual periods.
b)    Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations, requiring adjustment to these balances in future periods. Significant items subject to such estimates and assumptions include, but are not limited to, the determination of the useful lives of long-lived assets, period of benefit of deferred sales commissions, allowances for doubtful accounts, fair value of marketable securities, fair value of goodwill and long-lived assets, fair value of incentive awards, fair value of warrants, establishing standalone selling price, valuation of deferred tax assets, income tax uncertainties and other contingencies, including the Company’s ability to exercise its right to repurchase incentive options from terminated employees.
c)    Segment Information
The Company has determined that its Chief Executive Officer (“CEO”) is its chief operating decision maker. The Company’s CEO reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment.
d)    Foreign Currency Translation
The financial position and results of operations of the Company’s international subsidiaries are measured using the local currency as the functional currency. Revenue and expenses have been translated into U.S. dollars at average exchange rates prevailing during the periods. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity (accumulated other comprehensive loss), unless there is a sale or complete liquidation of the underlying foreign investments, or the adjustment is inconsequential.
e)    Fair Value of Financial Instruments
Fair value is defined as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a fair value hierarchy to classify fair value amounts of the Company’s assets and liabilities recognized or disclosed in the Company’s consolidated financial statements based on the lowest level of input that is significant to the fair value measurement. The levels of the hierarchy are described below:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Includes other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs that are supported by little or no market activity.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions based on the best information available. The Company recognizes transfers into and out of the levels as of the end of each reporting period. Refer to Note 19 for additional information regarding the fair value measurements.
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
f)    Liquidity and Capital Resources
LiveVox’s consolidated financial statements have been prepared assuming the Company will continue as a going concern for the 12-month period from the date of issuance of the consolidated financial statements, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s main sources of liquidity are cash generated by operating cash flows and debt. For the six months ended June 30, 2022 and 2021, the Company’s cash flow used in operating activities was $16.4 million and $9.6 million, respectively. The Company had restricted cash of $0.1 million as of both June 30, 2022 and December 31, 2021, related to the holdback amount for an acquisition the Company made in 2019. The Company’s primary use of cash is for operating and administrative activities including employee-related expenses, and general, operating and overhead expenses. Future capital requirements will depend on many factors, including the Company’s customer growth rate, customer retention, timing and extent of development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced services offerings, the continuing market acceptance of the Company’s services, effective integration of acquisition activities, if any, and maintaining the Company’s bank credit facility. Additionally, the duration and extent of the impact from the current macroeconomic and geopolitical conditions and the COVID-19 pandemic continues to depend on future developments that cannot be accurately predicted at this time, such as supply chain constraints, inflationary pressures and the specific impact of these and other factors on LiveVox’s business, employees, customers and partners. While those factors have caused operational difficulties, and may continue to create challenges for the Company’s performance, they have not, thus far, had a substantial net impact on the Company’s liquidity position.
The Company believes it has sufficient financial resources for at least the next 12 months from the date these consolidated financial statements are issued.
g)    Debt Discount and Issuance Costs
The Company’s debt issuance costs and debt discount are recorded as a direct reduction of the carrying amount of the debt liability and are amortized to interest expense over the contractual term of the term loan.
h)    Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company limits its credit risk associated with the cash and cash equivalents by placing investments with banks it believes are highly creditworthy. The Company has exposure to credit risk to the extent cash balances exceed amounts covered by Federal deposit insurance. At June 30, 2022 and December 31, 2021, the Company had no cash equivalents. Cash consists of bank deposits. Restricted cash consists entirely of amounts held back from stockholders of the Company’s acquired businesses for indemnification of outstanding liabilities. Such amounts are retained temporarily for a period of 4.5 months and then remitted to the applicable stockholders, net of fees paid for indemnification of liabilities. Since restricted cash amounts represent funds held for others, there is also a corresponding liability account. As of June 30, 2022, the Company has identified $0.1 million as restricted cash as management’s intention is to use this cash for the specific purpose of fulfilling the obligations associated with the holdback amount from recent acquisitions. As of December 31, 2021, the Company had $0.1 million in restricted cash.
i)    Marketable Securities
The Company invests in various marketable securities. As of June 30, 2022 and December 31, 2021, the Company designated all of these marketable securities as debt securities and classified them as available-for-sale (“AFS”). No debt securities were classified as held-to-maturity (“HTM”) or trading. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation as of each balance sheet date.
Debt securities classified as AFS are reported at fair value with unrealized gains and losses, net of income taxes, as a separate component of stockholders’ equity (accumulated other comprehensive loss) in the consolidated balance sheets until the securities are sold or are other-than-temporary impaired (“OTTI”). Debt securities are classified as current or non-current, based on maturities and the Company’s expectations of sales and redemptions in the next 12 months.
Gains and losses on sales of debt securities are recorded on the trade date in other income (expense), net, in the consolidated statements of operations and comprehensive loss. The cost of debt securities sold or the amount reclassified out of accumulated other comprehensive loss into earnings is determined using the specific identification method.
The Company evaluates the amortized cost of debt securities compared to their fair value to determine whether a debt security is impaired and whether an impaired debt security is OTTI at each reporting period. Factors considered in determining whether an OTTI occurs include the length of time and extent to which fair value has been less than the cost basis, credit quality of the issuer
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. For a debt security deemed to be OTTI, the value of the debt security is reduced, the credit related component of OTTI is recorded in earnings and the noncredit related component is charged to other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss.
Please refer to Note 4 for additional information relating to marketable securities.
j)    Accounts Receivable
Trade accounts receivable are stated net of any write-offs and the allowance for doubtful accounts, at the amount the Company expects to collect. The Company performs ongoing credit evaluations of its customers and generally does not require collateral unless a customer has previously defaulted. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: aging of the account receivable, customer creditworthiness, past transaction history with the customer, current economic and industry trends, and changes in customer payment trends. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. At June 30, 2022 and December 31, 2021, the allowance for doubtful accounts was $1.5 million and $1.3 million, respectively. Accounts receivable are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. Recoveries of accounts receivable previously written off are recorded as income when received. The accounts receivable recoveries during the three and six months ended June 30, 2022 and 2021 were immaterial. The bad debt expense recorded for the three and six months ended June 30, 2022 was $0.4 million and $0.4 million, respectively, and for the three and six months ended June 30, 2021 was immaterial. The accounts written off for the three and six months ended June 30, 2022 was $0.4 million and $0.4 million, respectively, and for the three and six months ended June 30, 2021 was immaterial.
k)    Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs, including planned major maintenance activities, are charged to expense as incurred. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from the accounts and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss. Amortization expense on capitalized software is included in depreciation expense. Depreciation of leasehold improvements is recorded over the shorter of the estimated useful life of the leasehold improvement or lease terms that are reasonably assured.
Depreciation of property and equipment is provided using the straight-line method based on the following estimated useful lives:

 Years
Computer equipment
3 - 5
Computer software3
Furniture and fixtures
5 - 10
Leasehold improvements5
Website development2
l)    Identified Intangible Assets
On March 21, 2014, LiveVox, Inc. and subsidiaries were acquired by LiveVox Holdings, Inc. On October 16, 2019, the Company acquired the rights to certain assets of Teckst Inc. On December 16, 2019, the Company acquired the rights to Speech IQ, LLC. On February 5, 2021, the Company completed its asset acquisition of BusinessPhone. The acquisitions resulted in identified marketing-based, technology-based, customer-based, trademark-based, and workforce-based intangible assets. The fair value of the identified assets was determined as of the date of the acquisition by management with the assistance of an independent valuation firm. The identified intangible assets are being amortized using the straight-line method based on the following estimated useful lives:

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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
Years
Marketing-based7
Technology-based
4 - 10
Customer-based
7 - 16
Trademark-based4
Workforce-based10
m)    Goodwill
Goodwill represents the excess of the purchase price of acquired business over the fair value of the underlying net tangible and intangible assets. The Company performed its annual impairment review of goodwill on October 1 of each year, and when a triggering event occurs between annual impairment tests.
In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine if it is more likely than not that the fair value of the Company’s single reporting unit is less than its carrying amount, including goodwill, or bypass the qualitative assessment and proceed directly to the quantitative impairment test in accordance with ASC 350-20-35, as amended by Accounting Standards Update (“ASU”) 2017-04, to determine if the fair value of the reporting unit exceeds its carrying amount. If the fair value is determined to be less than the carrying value, an impairment charge is recorded for the amount by which the reporting unit’s carrying amount exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. Refer to Note 6 for more information.
n)    Impairment of Long-Lived Assets
Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset and long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value. No impairment loss was recognized during the three and six months ended June 30, 2022 and 2021.
o)    Amounts Due to Related Parties
In the ordinary course of business, the Company has and expects to continue to have transactions with its stockholders and affiliates. Refer to Note 11 for more information.
p)    Concentration of Risk
Concentration of Customer and Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. Risks associated with cash and cash equivalents and marketable securities are mitigated using what the Company considers creditworthy institutions. The Company performs ongoing credit evaluations of its customers’ financial condition. Substantially all of the Company’s assets are in the United States.
As of June 30, 2022 and December 31, 2021, no single issuer represented more than 10% of the Company’s marketable securities.
The Company’s customers are primarily in the receivables management, tele-sales and customer care industries. During the three and six months ended June 30, 2022 and 2021, substantially all the Company’s revenue was generated in the United States. For the three and six months ended June 30, 2022 and 2021, the Company did not have any customers that individually represented 10% or more of the Company’s total revenue or whose accounts receivable balance at June 30, 2022 and December 31, 2021 individually represented 10% or more of the Company’s total accounts receivable.
Concentration of Supplier Risk
The Company relies on third parties for telecommunication, bandwidth, and co-location services that are included in cost of revenue.
As of June 30, 2022, one vendor accounted for approximately 37% of the Company’s total accounts payable. No other single vendor exceeded 10% of the Company’s accounts payable at June 30, 2022. At December 31, 2021, one vendor accounted for
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
approximately 43% of the Company’s total accounts payable. No other single vendor exceeded 10% of the Company’s accounts payable at December 31, 2021. The Company believes there could be a material impact on future operating results should a relationship with an existing significant supplier cease.
q)    Revenue Recognition
The Company recognizes revenue in accordance with U.S. GAAP, pursuant to ASC 606, Revenue from Contracts with Customers.
The Company derives substantially all of its revenue by providing cloud-based contact center products under a usage-based model, with prices calculated on a per-call, per-seat, or, more typically, a per-minute basis and contracted minimum usage in accordance with the terms of the underlying agreements. Other immaterial ancillary revenue is derived from call recording, local caller identification packages, performance/speech analytics, text messaging services and professional services billed monthly on primarily usage-based fees and, to a lesser extent, fixed fees. Revenue is recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those services excluding amounts collected on behalf of third parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities based on local tax law.
The Company determines revenue recognition through the following steps:
a.Identification of the contract, or contracts, with a customer;
b.Identification of the performance obligations in the contract;
c.Determination of the transaction price;
d.Allocation of the transaction price to the performance obligations in the contract; and
e.Recognition of revenue when, or as, the performance obligations are satisfied.
The Company enters into contracts that can include various combinations of services, each of which are distinct and accounted for as separate performance obligations. The Company’s cloud-based contact center solutions typically include a promise to provide continuous access to its hosted technology platform solutions through one of its data centers. Arrangements with customers do not provide the customer with the right to take possession of the Company’s software platform at any time. LiveVox’s performance obligations are satisfied over time as the customer simultaneously receives and consumes the benefits and the Company performs its services. The Company’s contracts typically range from one to four year agreements with payment terms of net 10-60 days. As the services provided by the Company are generally billed monthly there is not a significant financing component in the Company’s arrangements.
The Company’s arrangements typically include monthly minimum usage commitments and specify the rate at which the customer must pay for actual usage above the monthly minimum. Additional usage in excess of contractual minimum commitments is deemed to be specific to the month that the usage occurs, since the minimum usage commitments reset at the beginning of each month. The Company has determined these arrangements meet the variable consideration allocation exception and therefore, it recognizes contractual monthly commitments and any overages as revenue in the month they are earned.
The Company has service-level agreements with customers warranting defined levels of uptime reliability and performance. Customers may receive credits or refunds if the Company fails to meet such levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable consideration. The Company records reductions to revenue for these estimated customer credits at the time the related revenue is recognized. These customer credits are estimated based on current and historical customer trends, and communications with its customers. Such customer credits have not been significant to date.
For contracts with multiple performance obligations, the Company allocates the contract price to each performance obligation based on its relative standalone selling price (“SSP”). The Company generally determines SSP based on the prices charged to customers. In instances where SSP is not directly observable, such as when the Company does not sell the service separately, the SSP is determined using information that generally includes market conditions or other observable inputs.
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
Professional services for configuration, system integration, optimization or education are billed on a fixed-price or time and material basis and are performed by the Company directly or, alternatively, customers may also choose to perform these services themselves or engage their own third-party service providers. Professional services revenue, which represents approximately 1% of revenue, is recognized over time as the services are rendered.
Deferred revenue represents billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual or multi-year minimum usage agreements not yet provided as of the balance sheet date. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as deferred revenue, current in the consolidated balance sheets, with the remainder recorded as deferred revenue, net of current in the Company’s consolidated balance sheets.
r)    Costs to Obtain Customer Contracts (Deferred Sales Commissions)
Sales commissions are paid for initial contracts and expansions of existing customer contracts. Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized and amortized on a straight-line basis over the anticipated period of benefit, which the Company has estimated to be five years. The Company determined the period of benefit by taking into consideration the length of the Company’s customer contracts, the customer attrition rate, the life of the technology provided and other factors. Amortization expense is recorded in sales and marketing expense within the Company’s consolidated statements of operations and comprehensive loss. Amortization expense for the three months ended June 30, 2022 and 2021 was $0.8 million and $0.4 million, respectively, and for the six months ended June 30, 2022 and 2021 was approximately $1.5 million and $0.8 million, respectively. No impairment loss was recognized during the three and six months ended June 30, 2022 and 2021.
s)    Advertising
The Company expenses non-direct response advertising costs as they are incurred. There were no advertising costs capitalized during the three and six months ended June 30, 2022 and 2021. Advertising expense for the three months ended June 30, 2022 and 2021 was $1.1 million and $0.1 million, respectively, and for the six months ended June 30, 2022 and 2021 was $1.7 million and $0.2 million, respectively. Advertising expense is included under sales and marketing expense in the accompanying consolidated statements of operations and comprehensive loss.
t)    Research and Development Costs
Research and development costs not related to the development of internal use software are charged to operations as incurred. Research and development expenses primarily include payroll and employee benefits, consulting services, travel, and software and support costs.
u)    Software Development Costs
The Company capitalizes costs of materials, consultants, payroll, and payroll-related costs of employees incurred in developing internal-use software after certain capitalization criteria are met and includes these costs in the computer software. Refer to Note 5 for additional information. Software development costs are expensed as incurred until preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. To date, all software development costs have been charged to research and development expense in the accompanying consolidated statements of operations and comprehensive loss. There were no capitalized software development costs related to internal-use software during the three and six months ended June 30, 2022 and 2021.
v)    Income Taxes
Deferred Taxes
The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences arising from the temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will be paid or refunds received, as
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
provided for under currently enacted tax law. A valuation allowance is provided for deferred tax assets that, based on available evidence, are not expected to be realized.
Enactment of the Tax Cuts and Jobs Act in 2017 subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. Under U.S. GAAP, an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI resulting from those items in the year of the GILTI inclusion (i.e., as a period expense). The Company has elected to recognize the tax on GILTI as a period expense in the period of inclusion. As such, no deferred taxes are recorded on the Company’s temporary differences that might reverse as GILTI in future years.
Uncertain Tax Positions
The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained in a court of last resort. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company does not believe its consolidated financial statements include any uncertain tax positions. It is the Company’s policy to recognize interest and penalties accrued on any unrecognized tax benefit as a component of income tax expense.
w)    Stock-Based Compensation
The Company measures compensation expense for stock awards granted to employees and nonemployees in accordance with ASC 718, Compensation—Stock Compensation. Stock-based compensation is measured at fair value on grant date. The Company estimates the grant date fair value of Restricted Stock Units (“RSUs”) awards under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) by using the closing price of the Company’s Class A common stock on Nasdaq on the measurement date. The Company estimates the grant date fair value of Performance-based Restricted Stock Units (“PSUs”) awards under the Company’s 2021 Plan and management incentive units (“MIUs”) under the Management Incentive Unit program established by LiveVox TopCo in 2019, using the Monte Carlo simulation. Monte Carlo simulation is a widely accepted approach for financial instruments with path dependencies. The Company classified MIUs, RSUs and PSUs as equity awards at the grant date, and reassesses the liability versus equity treatment on a quarterly basis for any changes that have occurred during the period that may result in a reclassification. Equity-classified awards are recognized as stock-based compensation expense over an employee’s requisite service period or a nonemployee’s vesting period on the basis of the grant date fair value. Generally, the Company issues stock awards with service-based and/or market-based vesting conditions. For awards with only service-based vesting conditions (e.g., MIUs and RSUs), the Company records stock-based compensation expense using the straight-line method. For awards with market-based vesting conditions (e.g., PSUs), the Company recognizes stock-based compensation expense on a tranche-by-tranche basis (i.e., the accelerated attribution method). For awards issued to nonemployees, the Company recognizes stock-based compensation expense as the goods are received or services are performed. The Company elects to account for forfeitures as they occur, rather than making estimates of future forfeitures.
Payment of the underlying shares in connection with the vesting of employee RSUs generally triggers a tax obligation for the employee, which is required to be remitted to the relevant tax authorities. The 2021 Plan permits the following tax withholding methods:
Net-share-settlement method—The Company withholds otherwise deliverable RSU shares having a fair value at the vest date equal to the maximum statutory withholding tax amount and remits the remaining RSU shares to the employee recipients. During the six months ended June 30, 2022, the Company withheld 204,749 shares to cover employee recipients’ withholding tax obligations. Any cash received and paid to meet an employees’ statutory withholding tax requirement is reflected as a financing activity within the consolidated statements of cash flows.
Sell-to-cover method—The broker sells on behalf of employee recipients RSU shares having a fair value at the vest date equal to the maximum statutory withholding tax amount and remits the cash proceeds from such sales to the Company. The net impact of any cash received and paid to meet an employees’ statutory withholding tax requirement is reflected as an operating activity within the consolidated statements of cash flows.
Nonemployee directors acting in their role as members of a board of directors are treated as employees if (a) those directors were elected by the Company’s shareholders and (b) the awards granted to nonemployee directors are for their services as directors but not for other services. While a nonemployee director may be considered an employee under ASC 718, he or she is considered a nonemployee under the IRS statutory withholding requirements. As a result, no share was withheld or sold to cover withholding taxes for an award issued to a nonemployee director. Independent consultants are nonemployees under the IRS statutory
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
withholding requirements. As a result, no share was withheld or sold to cover withholding taxes for an award issued to a nonemployee.
Please see Note 15 for further detail about stock-based compensation expenses related to MIUs under the Management Incentive Unit program, and RSUs and PSUs under the 2021 Plan.
x)    Acquisitions
The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.
y)    Public and Forward Purchase Warrants
Prior to the Merger, Crescent issued 7,000,000 private placement warrants (“Private Warrants”) and 12,499,995 public warrants (“Public Warrants”) at the close of Crescent’s initial public offering (“IPO”) on March 7, 2019. As an incentive for LiveVox to enter into the Merger Agreement, pursuant to the Sponsor Support Agreement dated January 13, 2021, Crescent’s sponsor agreed to the cancellation of all of the Private Warrants prior to the Closing Date. In addition, 833,333 Forward Purchase Warrants (“Forward Purchase Warrants”) were issued pursuant to the Forward Purchase Agreement dated January 13, 2021 between Crescent and Old LiveVox. The 12,499,995 Public Warrants and the 833,333 Forward Purchase Warrants (collectively, the “Warrants”) remain outstanding after the Merger. Each whole Warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustments. The Warrants are exercisable at any time prior to June 18, 2026. See Note 12 for further information on stock warrants.
Upon consummation of the Merger, the Company concluded that (a) the Public Warrants meet the derivative scope exception for contracts in the Company’s own stock and are recorded in stockholders’ equity and (b) the Forward Purchase Warrants do not meet the derivative scope exception and are accounted for as derivative liabilities. Specifically, the Forward Purchase Warrants contain provisions that cause the settlement amounts to be dependent upon the characteristics of the holder of the Warrant which is not an input into the pricing of a fixed-for-fixed option on equity shares. Therefore, the Forward Purchase Warrants are not considered indexed to the Company’s stock and should be classified as a liability. Since the Forward Purchase Warrants meet the definition of a derivative, the Company recorded the Forward Purchase Warrants as liabilities on the consolidated balance sheets at fair value upon the Merger, with an offsetting entry to additional paid-in capital. The gain or loss resulting from decrease or increase in the fair value of the Forward Purchase Warrants in the subsequent periods are recognized in the consolidated statements of operations and comprehensive loss. The fair value of the Forward Purchase Warrants was measured using the Black-Scholes option-pricing model at each measurement date. See Note 19 for further information on fair value.
z)    Recently Adopted Accounting Pronouncements
As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time the Company is no longer considered to be an EGC. The Company did not adopt any new accounting pronouncements during the six months ended June 30, 2022.
aa)    Recently Issued Accounting Pronouncements
ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
should be accounted for in accordance with Topic 842, Leases. In April 2019, the FASB issued ASU No. 2019- 04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies treatment of certain credit losses. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief, which permits an entity, upon adoption of ASU 2016-13, to irrevocably elect the fair value option (on an instrument-by-instrument basis) for eligible financial assets measured at amortized cost basis. In November 2019, FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which changes the effective dates for Topic 326 to give implementation relief to certain types of entities. In November 2019, the FASB issued ASU No. 2019- 11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which includes various narrow-scope improvements and clarifications. In March 2020, the FASB issued ASU No. 2020- 03, Codification Improvements to Financial Instruments, which clarifies and improves certain financial instruments guidance. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. The guidance is to be adopted on a modified retrospective basis. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements and plans to adopt this standard effective January 1, 2023.
ASU No. 2019-12, Income Taxes (Topic 740)
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as hybrid tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of legal entities not subject to tax, intraperiod tax allocation exception to incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax law, year-to-date loss limitation in interim-period tax accounting, income statement presentation of tax benefits of tax-deductible dividends and impairment of investment in qualified affordable housing projects accounted for under the equity method. The guidance is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the guidance is effective for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The guidance has various elements and different transition methods (retrospective, modified-retrospective, or prospective) which are applied based on the nature of the elements. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements and will adopt this standard on December 31, 2022.
ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments and contracts on an entity’s own equity, including removing certain conditions for equity classification, and amending certain guidance on the computation of EPS for contracts on an entity’s own equity. The guidance is effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities, the guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company is currently evaluating the impact this pronouncement will have on its consolidated financial statements and plans to adopt this standard effective January 1, 2024.

3.    Revenue
Contract Balance
The following table provides information about accounts receivable, net, and contract liabilities from contracts with customers. The Company did not have any contract assets as of June 30, 2022 or December 31, 2021 (dollars in thousands):
 
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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
 June 30, 2022  December 31, 2021
Accounts receivable, net$18,524 $20,128 
Contract liabilities, current (deferred revenue)1,142 1,307 
Contract liabilities, non-current (deferred revenue)452 456 
Changes in the contract liabilities balances are as follows (dollars in thousands):

 June 30, 2022  December 31, 2021  $ Change
Contract liabilities (deferred revenue)$1,594 $1,763 $(169)
The decrease in deferred revenue was due to billings in advance of performance obligations being satisfied, net of revenue recognized for services rendered during the period. Revenue of $0.4 million and $0.9 million was recognized during the three and six months ended June 30, 2022, respectively, which were included in the deferred revenue balance at the beginning of the period. Revenue of $0.4 million and $1.0 million was recognized during the three and six months ended June 30, 2021, respectively, which was included in the deferred revenue balance at the beginning of the period.
Remaining Performance Obligations
Remaining performance obligations represent the contracted minimum usage commitments and do not include an estimate of additional usage in excess of contractual minimum commitments. The Company’s contract terms typically range from one to four years. Revenue as of June 30, 2022 that has not yet been recognized was approximately $164.5 million, of which $86.7 million and $77.8 million is expected to be recognized as revenue within one year and beyond one year, respectively. As of June 30, 2022, the Company expects to recognize revenue on the remaining performance obligations over the next 60 months.
4.    Marketable Securities
As of June 30, 2022 and December 31, 2021, the Company designated all marketable securities as debt securities and classified them as AFS. There were no transfers of debt securities between AFS, HTM and trading categories during the three and six months ended June 30, 2022 and 2021.
The following table presents the amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities at June 30, 2022 aggregated by major security type (dollars in thousands):

Amortized CostGross Unrealized GainGross Unrealized LossFair Value
U.S. corporate securities$38,944 $ $(1,097)$37,847 
U.S. government securities2,999  (16)2,983 
Asset-backed securities5,884  (207)5,677 
Other debt securities746  (33)713 
Total available for sale securities48,573  (1,353)47,220 
Total debt securities$48,573 $ $(1,353)$47,220 

The following table presents the amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities at December 31, 2021 aggregated by major security type (dollars in thousands):

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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
Amortized CostGross Unrealized GainGross Unrealized LossFair Value
U.S. corporate securities$39,370 $5 $(154)$39,221 
U.S. government securities2,997  (1)2,996 
Asset-backed securities6,439 1 (22)6,418 
Other debt securities745  (6)739 
Total available for sale securities49,551 6 (183)49,374 
Total debt securities$49,551 $6 $(183)$49,374 

The following table presents the amortized cost and fair value of the Company’s debt securities by contractual maturities at June 30, 2022 (dollars in thousands):

As of June 30, 2022Amortized CostFair Value
Due in one year or less$14,183 $14,047 
Due after one year through five years34,390 33,173 
Total available for sale securities48,573 47,220 
Total debt securities$48,573 $47,220 

Refer to Note 19 for additional information regarding the fair value measurements of the Company’s marketable securities.
Proceeds from sales of debt securities and the associated gains and losses realized in earnings during the three and six months ended June 30, 2022 and 2021 are listed below (dollars in thousands):

Three Months Ended
June 30,
Six Months Ended June 30,
2022202120222021
Available for sale debt securities:
Proceeds from sales of debt securities$1,936 $ $3,451 $ 
Gross realized gains$ $ $ $ 
Gross realized losses(33) (42) 
Net realized losses$(33)$ $(42)$ 

The Company has reviewed 82 individual debt securities in unrealized loss positions at June 30, 2022 to determine whether a decline in fair value below the amortized cost is other than temporary. The Company does not intend to sell these debt securities and it is not more likely than not that the Company will be required to sell these debt securities before recovery of their amortized cost bases. The Company then assessed whether the entire amortized cost bases of these debt securities will be recovered. As the present value of future cash flows discounted using the effective interest rate at the date these debt securities were acquired was equal to or greater than the amortized cost basis of these debt securities, the Company did not consider any debt securities to be impaired at June 30, 2022.
The following table presents the fair value and unrealized losses of the Company’s debt securities that are in unrealized loss positions and for which an OTTI has not been recognized in earnings at June 30, 2022 (dollars in thousands):

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LIVEVOX HOLDINGS, INC.
Notes to the Consolidated Financial Statements (Unaudited)
In Unrealized Loss Position For
Less Than 12 Months
In Unrealized Loss Position For
12 Months Or Longer
Fair ValueGross Unrealized LossFair ValueGross Unrealized Loss
U.S. corporate securities$37,847 $(1,097)$ $ 
U.S. government securities2,983 (16)