ecom-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			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 001-35940

____________________________________________________

CHANNELADVISOR CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________________________


Delaware						56-2257867
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

3025 Carrington Mill Boulevard, Morrisville, NC						27560
(Address of principal executive offices)						(Zip Code)

(919) 228-4700

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former

fiscal year, if changed since last report)

____________________________________________________

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	ECOM	New York Stock Exchange

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 Securities Exchange Act of 1934.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 ☒

The number of outstanding shares of the registrant's common stock, par value $0.001 per share, as of the close of business on July 29, 2022 was 28,728,705.

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			PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of June 30 , 2022 (unaudited) and December 31, 2021			2

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30 , 2022 and 2021			3

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30 , 2022 and 2021			4

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2022 and 2021			5

Notes to Unaudited Condensed Consolidated Financial Statements			6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			13

Item 3. Quantitative and Qualitative Disclosures About Market Risk			28

Item 4. Controls and Procedures			28

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			29

Item 1A. Risk Factors			29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29

Item 3. Defaults Upon Senior Securities			29

Item 4. Mine Safety Disclosures			29

Item 5. Other Information			29

Item 6. Exhibits			30

Signatures			31

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CHANNELADVISOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	June 30, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	84,243	$	100,567
Accounts receivable, net of allowance of $215 and $279 as of June 30, 2022 and December 31, 2021, respectively	26,143		28,886
Prepaid expenses and other current assets	15,865		15,497
Total current assets	126,251		144,950
Operating lease right of use assets	6,006		2,856
Property and equipment, net of accumulated depreciation of $24,731 and $23,096 as of June 30, 2022 and December 31, 2021, respectively	7,953		7,682
Goodwill	28,986		30,042
Intangible assets, net	2,575		3,079
Deferred contract costs, net of current portion	18,645		17,951
Long-term deferred tax assets, net	30,210		32,616
Other assets	622		796
Total assets	$	221,248	$	239,972
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	883	$	1,457
Accrued expenses	10,797		12,644
Deferred revenue	31,437		29,942
Other current liabilities	2,706		4,831
Total current liabilities	45,823		48,874
Long-term operating leases, net of current portion	5,063		1,182
Other long-term liabilities	1,371		1,718
Total liabilities	52,257		51,774
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 100,000,000 shares authorized, 28,727,015 and 30,188,595 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	29		30
Additional paid-in capital	280,419		300,875
Accumulated other comprehensive loss	(4,648)		(2,237)
Accumulated deficit	(106,809)		(110,470)
Total stockholders' equity	168,991		188,198
Total liabilities and stockholders' equity	$	221,248	$	239,972

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

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CHANNELADVISOR CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	42,802	$	41,543	$	85,099	$	80,709
Cost of revenue	10,407		9,533		20,789		17,941
Gross profit	32,395		32,010		64,310		62,768
Operating expenses:
Sales and marketing	16,156		15,159		32,102		29,791
Research and development	5,380		5,908		10,803		11,435
General and administrative	7,448		6,835		14,670		11,717
Total operating expenses	28,984		27,902		57,575		52,943
Income from operations	3,411		4,108		6,735		9,825
Other income (expense):
Interest income (expense)	45		(33)		17		(66)
Other income (expense)	35		(5)		—		(135)
Total other income (expense)	80		(38)		17		(201)
Income before income taxes	3,491		4,070		6,752		9,624
Income tax expense (benefit)	1,654		(490)		3,091		(393)
Net income	$	1,837	$	4,560	$	3,661	$	10,017
Net income per share:
Basic	$	0.06	$	0.15	$	0.12	$	0.34
Diluted	$	0.06	$	0.15	$	0.12	$	0.32
Weighted average common shares outstanding:
Basic	29,949,978		29,764,013		30,110,764		29,530,369
Diluted	30,911,784		31,402,695		31,290,204		31,269,427

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

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CHANNELADVISOR CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	1,837	$	4,560	$	3,661	$	10,017
Other comprehensive (loss) income:
Foreign currency translation adjustments	(1,995)		88		(2,411)		(62)
Total comprehensive (loss) income	$	(158)	$	4,648	$	1,250	$	9,955

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

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CHANNELADVISOR CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net income	$	3,661	$	10,017
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities:
Depreciation and amortization	2,964		3,479
Bad debt expense	100		47
Stock-based compensation expense	6,606		6,624
Deferred income taxes	2,114		(893)
Other items, net	(929)		(1,760)
Changes in assets and liabilities:
Accounts receivable	1,825		(527)
Prepaid expenses and other assets	(71)		(318)
Deferred contract costs	(1,741)		(3,282)
Accounts payable and accrued expenses	(2,859)		(249)
Deferred revenue	2,057		4,448
Cash and cash equivalents provided by operating activities	13,727		17,586
Cash flows from investing activities
Purchases of property and equipment	(1,138)		(494)
Payment of software development costs	(1,955)		(1,631)
Cash and cash equivalents used in investing activities	(3,093)		(2,125)
Cash flows from financing activities
Repayment of finance leases	(8)		(8)
Proceeds from exercise of stock options	375		3,722
Repurchase and retirement of common stock	(25,000)		—
Payment of statutory tax withholding related to net-share settlement of restricted stock units	(1,875)		(342)
Cash and cash equivalents (used in) provided by financing activities	(26,508)		3,372
Effect of currency exchange rate changes on cash and cash equivalents	(450)		(27)
Net (decrease) increase in cash and cash equivalents	(16,324)		18,806
Cash and cash equivalents, beginning of period	100,567		71,545
Cash and cash equivalents, end of period	$	84,243	$	90,351
Supplemental disclosure of cash flow information
Cash paid for interest	$	32	$	36
Cash paid for income taxes, net	$	582	$	338
Supplemental disclosure of noncash investing and financing activities
Accrued statutory tax withholding related to net-share settlement of restricted stock units	$	563	$	2,896
Accrued capital expenditures	$	27	$	16

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

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CHANNELADVISOR CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS

ChannelAdvisor Corporation ("ChannelAdvisor" or the "Company") was incorporated in the state of Delaware and capitalized in June 2001. The Company began operations in July 2001. ChannelAdvisor is a leading provider of cloud-based e-commerce solutions whose mission is to connect and optimize the world's commerce. For over two decades, ChannelAdvisor has helped brands and retailers worldwide to streamline their e-commerce operations, expand to new channels and grow sales. Thousands of customers depend on ChannelAdvisor to securely power their e-commerce operations on hundreds of channels, including Amazon, eBay, Facebook, Google, Shopify, Walmart and Zalando. The Company is headquartered in Morrisville, North Carolina and maintains sales, service, support and research and development offices in various domestic and international locations.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Interim Condensed Consolidated Financial Information

The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, as contained in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of financial position, the results of operations, comprehensive (loss) income and cash flows. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results for the full year or the results for any future periods, especially in light of the ongoing impacts, and potential future effects of, the COVID-19 pandemic and other macroeconomic and geopolitical factors on the Company’s business, operations and financial performance. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related footnotes for the year ended December 31, 2021, or fiscal 2021, which are included in the Company's Annual Report on Form 10-K for fiscal 2021. There have been no material changes to the Company's significant accounting policies from those described in the footnotes to the audited financial statements contained in the Company's Annual Report on Form 10-K for fiscal 2021.

Recent Accounting Pronouncements

The Company has reviewed new accounting pronouncements that were issued during the six months ended June 30, 2022 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, the useful lives of long-lived assets and other intangible assets, income taxes, assumptions used for purposes of determining stock-based compensation, leases, including estimating lease terms and extensions, and revenue recognition, including standalone selling prices for contracts with multiple performance obligations and the expected period of benefit for deferred contract costs, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities.

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3. STOCKHOLDERS' EQUITY

The following tables summarize quarterly stockholders' equity activity for the six months ended June 30, 2022 and 2021 (in thousands, except number of shares):


	Quarterly Activity For The Six Months Ended June 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance, December 31, 2021	30,188,595	$	30	$	300,875	$	(2,237)	$	(110,470)	$	188,198
Exercise of stock options and vesting of restricted stock units	388,551	—		362		—		—		362
Stock-based compensation expense	—	—		3,132		—		—		3,132
Statutory tax withholding related to net-share settlement of restricted stock units	(101,316)	—		(1,818)		—		—		(1,818)
Net income	—	—		—		—		1,824		1,824
Foreign currency translation adjustments	—	—		—		(416)		—		(416)
Balance, March 31, 2022	30,475,830	30		302,551		(2,653)		(108,646)		191,282
Exercise of stock options and vesting of restricted stock units	123,990	—		13		—		—		13
Stock-based compensation expense	—	—		3,474		—		—		3,474
Statutory tax withholding related to net-share settlement of restricted stock units	(44,201)	—		(620)		—		—		(620)
Repurchase and retirement of common stock	(1,828,604)	(1)		(24,999)		—		—		(25,000)
Net income	—	—		—		—		1,837		1,837
Foreign currency translation adjustments	—	—		—		(1,995)		—		(1,995)
Balance, June 30, 2022	28,727,015	$	29	$	280,419	$	(4,648)	$	(106,809)	$	168,991


	Quarterly Activity For The Six Months Ended June 30, 2021
	Common Stock				Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares		Amount
Balance, December 31, 2020	29,020,424		$	29	$	288,842	$	(1,095)	$	(157,685)	$	130,091
Exercise of stock options and vesting of restricted stock units	802,270		1		3,586		—		—		3,587
Stock-based compensation expense	—		—		3,048		—		—		3,048
Statutory tax withholding related to net-share settlement of restricted stock units	(89,842)		—		(2,061)		—		—		(2,061)
Net income	—		—		—		—		5,457		5,457
Foreign currency translation adjustments	—		—		—		(150)		—		(150)
Balance, March 31, 2021	29,732,852		30		293,415		(1,245)		(152,228)		139,972
Exercise of stock options and vesting of restricted stock units	146,164		—		136		—		—		136
Stock-based compensation expense	—		—		3,576		—		—		3,576
Statutory tax withholding related to net-share settlement of restricted stock units	(48,409)		—		(1,177)		—		—		(1,177)
Net income	—		—		—		—		4,560		4,560
Foreign currency translation adjustments	—		—		—		88		—		88
Balance, June 30, 2021	$	29,830,607	$	30	$	295,950	$	(1,157)	$	(147,668)	$	147,155

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Share Repurchase Program

In August 2021, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $25.0 million of the Company's common stock through August 10, 2022. During the three months ended June 30, 2022, 1,828,604 shares were repurchased and retired under the repurchase program at an average price of $13.67 per share for an aggregate total price of $25.0 million, which completed the share repurchase program authorized in August 2021.

In June 2022, the Company's Board of Directors authorized an additional share repurchase program of up to $25.0 million of the Company's common stock through June 30, 2023. The Company had not repurchased any shares under the June 2022 authorization as of June 30, 2022. Repurchases may be made from time to time on the open market at prevailing prices, including pursuant to Rule 10b5-1 trading plans, or in negotiated transactions off the market. The share repurchase program does not obligate the Company to repurchase any particular amount of its shares.

4. GOODWILL AND INTANGIBLE ASSETS

The Company has acquired intangible assets in connection with its business acquisitions. These assets were recorded at their estimated fair values at the acquisition date and are being amortized over their respective estimated useful lives using the straight-line method. The estimated useful lives and amortization methodology used in computing amortization are as follows:


	Estimated Useful Life	Amortization Methodology
Customer relationships	7 years	Straight-line
Acquired technology	7 years	Straight-line

Amortization expense associated with the Company's intangible assets was $0.1 million and $0.3 million for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $0.6 million for the six months ended June 30, 2022 and 2021, respectively.

The following table summarizes the changes in the carrying amount of goodwill during the six months ended June 30, 2022 (in thousands):


Balance, December 31, 2021	$	30,042
Effects of foreign currency translation	(1,056)
Balance, June 30, 2022	$	28,986

5. CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Capitalized software development costs related to creating internally developed software and implementing software purchased for internal use are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalized software development costs of $1.0 million and $0.9 million during the three months ended June 30, 2022 and 2021, respectively, and $1.9 million and $1.6 million during the six months ended June 30, 2022 and 2021, respectively. Amortization expense related to capitalized internally developed software was $0.8 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $1.6 million and $1.3 million for the six months ended June 30, 2022 and 2021, respectively, and is included in cost of revenue or general and administrative expense in the accompanying condensed consolidated statements of operations, depending upon the nature of the software development project. The net book value of capitalized internally developed software was $5.1 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively.

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6. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition and Disaggregation of Revenue

The Company derives the majority of its revenue from subscription fees paid for access to and usage of its software solutions for a specified contract term. A customer typically pays a recurring subscription fee based on a specified minimum amount of gross merchandise value, or GMV, or advertising spend that the customer expects to process through the Company's platform. Subscription fees may also include implementation fees such as launch assistance and training fees. The remaining portion of a customer's fee is variable and is based on a specified percentage of GMV or advertising spend processed through the Company's platform in excess of the customer's specified minimum GMV or advertising spend amount. In most cases, the specified percentage of excess GMV or advertising spend on which the variable fee is based is fixed and does not vary depending on the amount of the excess. Subscription fees are billed in advance of the subscription term and are due in accordance with contract terms, which generally provide for payment within 30 days. Variable fees are subject to the same payment terms, although they are generally billed at the end of the period in which they are incurred. The Company also generates revenue from its solutions that allow brands to direct potential consumers from their websites and digital marketing campaigns to authorized resellers. The majority of the Company's contracts have a one year term. The Company's contractual arrangements include performance, termination and cancellation provisions, but do not provide for refunds. Customers do not have the contractual right to take possession of the Company's software at any time. Sales taxes collected from customers and remitted to government authorities are excluded from revenue.

The Company's customers are categorized as follows:

Brands. The Company generally categorizes a customer as a brand if it primarily focuses on selling its own proprietary products.

Retailers. The Company generally categorizes a customer as a retailer if it primarily focuses on selling third-party products.

Other. Other is primarily comprised of strategic partnerships.

The following table summarizes revenue disaggregation by customer type for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2022		Percentage of Total		2021		Percentage of Total		2022		Percentage of Total		2021		Percentage of Total
Brands	$	19,111	45	%	$	15,956	38	%	$	37,946	45	%	$	30,205	37	%
Retailers	21,590		50	%	22,516		54	%	$	42,836	50	%	$	44,293	55	%
Other	2,101		5	%	3,071		7	%	4,317		5	%	6,211		8	%
	$	42,802			$	41,543			$	85,099			$	80,709

Contracts with Multiple Performance Obligations

Customers may elect to purchase a subscription to multiple modules, multiple modules with multiple service levels, or, for certain of the Company's solutions, multiple brands or geographies. The Company evaluates such contracts to determine whether the services to be provided are distinct and accordingly should be accounted for as separate performance obligations. If the Company determines that a contract has multiple performance obligations, the transaction price, which is the total price of the contract, is allocated to each performance obligation based on a relative standalone selling price method. The Company estimates standalone selling price based on observable prices in past transactions for which the product offering subject to the performance obligation has been sold separately. As the performance obligations are satisfied, revenue is recognized as discussed above.

Transaction Price Allocated to Future Performance Obligations

As the Company typically enters into contracts with customers for a twelve-month subscription term, a substantial majority of its performance obligations that have not yet been satisfied as of June 30, 2022 are part of a contract that has an original expected duration of one year or less. For contracts with an original expected duration of greater than one year, the aggregate transaction price allocated to the unsatisfied performance obligations was $40.5 million as of June 30, 2022, of which $24.7 million is expected to be recognized as revenue over the next twelve months.

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Deferred Revenue

Deferred revenue generally represents the unearned portion of subscription fees. Deferred revenue is recorded when fees are invoiced in advance of performance. Deferred amounts are generally recognized within one year. Deferred revenue is included in the accompanying condensed consolidated balance sheets under "Total current liabilities," net of any long-term portion that is included in "Other long-term liabilities." The following table summarizes deferred revenue activity for the six months ended June 30, 2022 (in thousands):


	Balance, beginning of period		Net additions	Revenue recognized from deferred revenue	Balance, end of period
Deferred revenue	$	30,868	72,757	(71,597)	$	32,028

Of the $85.1 million of revenue recognized in the six months ended June 30, 2022, $24.8 million was included in deferred revenue at January 1, 2022.

Costs to Obtain Contracts

The Company capitalizes sales commissions and a portion of other incentive compensation costs that are directly related to obtaining customer contracts and that would not have been incurred if the contract had not been obtained. These costs are included in the accompanying condensed consolidated balance sheets and are classified as "Prepaid expenses and other current assets," net of any long-term portion that is included in "Deferred contract costs, net of current portion." As of June 30, 2022, $9.3 million was included in "Prepaid expenses and other current assets." Deferred contract costs are amortized to sales and marketing expense over the expected period of benefit, which the Company has determined to be five years based on the estimated customer relationship period. The following table summarizes deferred contract cost activity for the six months ended June 30, 2022 (in thousands):


	Balance, beginning of period		Additions	Amortized costs (1)	Balance, end of period
Deferred contract costs	$	26,959	6,807	(5,861)	$	27,905

(1) Includes contract costs amortized to sales and marketing expense during the period and the impact from foreign currency exchange rate fluctuations.

7. STOCK-BASED COMPENSATION

The Company recognizes stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche.

Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of revenue	$	337	$	264	$	496	$	496
Sales and marketing	825		996		1,647		1,816
Research and development	620		690		1,037		1,302
General and administrative	1,692		1,626		3,426		3,010
Total stock-based compensation expense	$	3,474	$	3,576	$	6,606	$	6,624

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During the six months ended June 30, 2022, the Company granted the following share-based awards:


	Number of Shares Underlying Grant	Weighted Average Grant Date Fair Value
Service-based restricted stock units	700,046	$	17.78
Performance-based restricted stock units	185,154	$	17.78
Total share-based awards	885,200

8. NET INCOME PER SHARE

Basic net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated giving effect to all potentially dilutive shares of common stock, including stock options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method.

The following table summarizes the calculation of basic and diluted net income per share (in thousands, except share and per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic:
Net income	$	1,837	$	4,560	$	3,661	$	10,017
Weighted average common shares outstanding, basic	29,949,978		29,764,013		30,110,764		29,530,369
Basic net income per share	$	0.06	$	0.15	$	0.12	$	0.34
Diluted:
Net income	$	1,837	$	4,560	$	3,661	$	10,017
Weighted average common shares outstanding, basic	29,949,978		29,764,013		30,110,764		29,530,369
Dilutive effect of:
Stock options	227,244		572,474		322,521		604,491
Unvested service-based restricted stock units	656,324		1,066,208		746,621		1,134,567
Unvested performance-based restricted stock units	78,238		—		110,298		—
Weighted average common shares outstanding, diluted	30,911,784		31,402,695		31,290,204		31,269,427
Diluted net income per share	$	0.06	$	0.15	$	0.12	$	0.32

The following equity instruments have been excluded from the calculation of diluted net income per share because the effect is anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Stock options	157,509	22,229	22,760	22,541
Restricted stock units	565,513	20,796	529,047	20,852

9. INCOME TAXES

At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods.

The Company's effective tax rate was 47.4% and (12.0)% for the three months ended June 30, 2022 and 2021, respectively, and 45.8% and (4.1)% for the six months ended June 30, 2022 and 2021, respectively. The tax expense and benefit for each of the periods was based on U.S. federal, state, local and foreign income taxes. The Company’s effective tax rate for the three and six months ended June 30, 2022 was higher than the U.S. federal statutory rate of 21% primarily due to the

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generation of foreign operating losses which are subject to a valuation allowance as the related loss carryforwards are not yet deemed realizable and the U.S. federal and state requirement to capitalize research and development expenditures, effective for years beginning after December 31, 2021, as discussed below. The Company’s effective tax rate for the three and six months ended June 30, 2021 was lower than the U.S. federal statutory rate of 21% primarily due to the utilization of U.S. federal and state operating loss carryforwards which had previously been subject to a valuation allowance. As a result of uncertainties relating to the timing and sufficiency of future taxable income in certain tax jurisdictions in which the Company operates, the Company could not recognize the tax benefit of operating loss carryforwards generated in those jurisdictions until the operating loss carryforwards were utilized. The effective tax rate for the three and six months ended June 30, 2022 was higher than the effective tax rate for the three and six months ended June 30, 2021 primarily due to the tax benefit recorded from the utilization of U.S. federal and state operating loss carryforwards which had been previously subject to a valuation allowance during the three and six months ended June 30, 2021 and the U.S. federal and state requirement to capitalize research and development expenditures, effective for years beginning after December 31, 2021, as discussed below. The Company reversed most of the valuation allowance recorded against its U.S. federal and state operating loss carryforwards as of December 31, 2021. Therefore, the Company did not record a similar tax benefit from the utilization of U.S. federal and state operating loss carryforwards during the three and six months ended June 30, 2022.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them over five years for research performed in the United States and 15 years for research performed outside the United States, pursuant to Section 174 of the Internal Revenue Code. This change has had a material impact on the expected utilization of the Company's U.S. federal and state operating loss carryforwards and resulted in an increase in its effective tax rate for the three and six months ended June 30, 2022. Although Congress is considering legislation that would repeal or defer the capitalization and amortization requirement to later years, it is not certain that the provision will be repealed or otherwise modified. If the requirement is repealed or modified during a subsequent period, it could result in a decrease to the effective tax rate. The actual impact will depend on if and when this requirement is repealed or modified by Congress, including if retroactively to January 1, 2022, and the amount of research and development expenditures incurred in 2022.

10. SEGMENT AND GEOGRAPHIC INFORMATION

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, or CODM, for purposes of allocating resources and evaluating financial performance. The Company's CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company's operations constitute a single operating segment and one reportable segment.

Substantially all assets were held in the United States during the six months ended June 30, 2022 and the year ended December 31, 2021. The Company categorizes domestic and international revenue from customers based on their billing address. The following table summarizes revenue by geography for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Domestic	$	30,061	$	29,471	$	59,936	$	57,982
International	12,741		12,072		25,163		22,727
Total revenue	$	42,802	$	41,543	$	85,099	$	80,709

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions, or the negative of such words or phrases, are intended to identify "forward-looking statements." We have based these forward-looking statements on our current expectations and projections about future events. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Factors that could cause or contribute to these differences include those below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II – Item 1A, "Risk Factors," and our other filings with the Securities and Exchange Commission. Statements made herein are as of the date of the filing of this Form 10-Q with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes for the year ended December 31, 2021, which are included in our Annual Report on Form 10-K for fiscal 2021.

We are a leading provider of cloud-based e-commerce solutions whose mission is to connect and optimize the world's commerce. For over two decades, we have helped brands and retailers worldwide to streamline their e-commerce operations, expand to new channels and grow their sales. Our multichannel commerce platform allows our customers to connect to hundreds of global channels, market to consumers on those channels, sell products, manage fulfillment processes, and analyze and optimize channel performance. Thousands of customers depend on us to securely power their e-commerce operations on channels such as Amazon, eBay, Facebook, Google, Shopify, Walmart and Zalando. Our platform helps global brands gain a competitive advantage with actionable insights into digital shelf performance across thousands of retailer websites and marketplaces and helps make digital campaigns shoppable. Overall, our platform provides the breadth, scalability and flexibility to facilitate billions of dollars in e-commerce transactions annually across the globe.

We serve customers across a wide range of industries and geographies. Our customers include the online businesses of brands and retailers, as well as agencies that use our solutions on behalf of their clients.

EXECUTIVE OVERVIEW

FINANCIAL HIGHLIGHTS

•Total revenue of $42.8 million and $85.1 million for the three and six months ended June 30, 2022 increased 3.0% and 5.4%, respectively, from the comparable prior year periods;

•Revenue was comprised of 84.3% subscription revenue and 15.7% variable revenue for the three months ended June 30, 2022 compared with 77.1% subscription revenue and 22.9% variable revenue for the comparable prior year period;

•Revenue was comprised of 84.1% subscription revenue and 15.9% variable revenue for the six months ended June 30, 2022 compared with 77.2% subscription revenue and 22.8% variable revenue for the comparable prior year period;

•Revenue from our brands customers represented 44.6% of total revenue for both the three and six months ended June 30, 2022, up from 38.4% and 37.4% of total revenue for the comparable prior year periods;

•Revenue derived from customers located outside of the United States as a percentage of total revenue was 29.8% and 29.6% for the three and six months ended June 30, 2022, respectively, compared with 29.1% and 28.2% for the comparable prior year periods;

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•Gross margin of 75.7% and 75.6% for the three and six months ended June 30, 2022, respectively, declined by 140 and 220 basis points compared with 77.1% and 77.8% for the comparable prior year periods;

•Operating margin of 8.0% and 7.9% for the three and six months ended June 30, 2022, respectively, declined from 9.9% and 12.2% for the comparable prior year periods;

•Net income was $1.8 million and $3.7 million for the three and six months ended June 30, 2022, respectively, compared with $4.6 million and $10.0 million for the comparable prior year periods;

•Adjusted EBITDA, a non-GAAP measure, was $8.4 million and $16.6 million for the three and six months ended June 30, 2022, respectively, compared with $9.3 million and $18.5 million for the comparable prior year periods;

•Cash and cash equivalents were $84.2 million at June 30, 2022 compared with $100.6 million at December 31, 2021;

•Operating cash flow was $13.7 million for the six months ended June 30, 2022 compared with $17.6 million for the comparable prior year period; and

•Free cash flow, a non-GAAP measure, was $10.6 million for the six months ended June 30, 2022 compared with $15.5 million for the comparable prior year period.

TRENDS IN OUR BUSINESS

The following trends have contributed to the results of our consolidated operations, and we anticipate that they will continue to affect our future results:

•Growth in Online Shopping. Consumers continue to move more of their spending from offline to online. The continuing shift to online shopping and overall growth has contributed to our historical growth and we expect that this online shift will continue to benefit our business. Global efforts to implement social distancing, including stay-at-home orders and similar mobility and gathering restrictions, due to the COVID-19 pandemic, have increased e-commerce as consumers have increasingly turned to online purchasing for many products they would have purchased at brick and mortar stores. However, it is unclear to what degree this recent shift in favor of e-commerce will continue once the public health impacts of the COVID-19 pandemic have begun to subside or as a result of other macroeconomic or geopolitical factors beyond our control. For example, we have begun to see moderation of gross merchandise value, or GMV, and variable revenue performance compared to the prior year resulting from factors beyond COVID and government stimulus-generated tailwinds, such as the effects of inflation on consumer shopping habits.

•Product Offering Expansion. As online shopping evolves, we continue to expand our product offerings to reflect the needs of companies seeking to attract consumers. We continue to enhance our product offerings by increasing online shopping channel integrations, including marketplace and first-party retail programs, and providing capabilities that allow brands and retailers to be more competitive. This includes support for advertising, advanced algorithmic repricing, machine learning-based demand forecasting, analytics capabilities, fulfillment features and user experience. Product expansion and enhancement has been key to our strategic focus and success with Brands.

•Channel Expansion. We have experienced substantial growth in GMV on our platform from large channels like Zalando, Target Plus and Shopify, as well as numerous smaller marketplaces that we refer to collectively as our long tail of marketplaces. Many of our brands customers see a significant opportunity in expanding their reach to more consumers via global channel expansion. We implemented a strategic plan at the beginning of 2021 to add at least 80 additional channel connections across the globe over an 18-month period to help our customers with this opportunity. We exceeded this goal by adding over 100 new channels by the end of the first quarter of 2022. We intend to continue to add new channel connections over the remainder of 2022.

•Growth in Mobile Usage. We believe the shift toward mobile commerce will increasingly favor aggregators such as Amazon, eBay, Google and Walmart, all of which are focal points of our platform. These systems understand the identity of the buyer, helping to reduce friction in the mobile commerce process, while offering a wide selection of merchandise in a single location. We believe that the growth in mobile commerce may result in increased revenue for us.

•Evolving Fulfillment Landscape. Consumers have been conditioned to expect fast, efficient delivery of products. We believe that determining and executing on a strategy to more expeditiously receive, process and deliver online orders, which we refer to collectively as fulfillment, is critical to success for online sellers. Therefore, it will be increasingly important for us to facilitate and optimize fulfillment services on behalf of our customers, which in turn may result in additional research and development investment.

•Focus on Employees. We strive to provide competitive compensation and benefits programs to help attract and retain employees who are focused on facilitating the success of our customers. We believe the human capital programs

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we have in place are market competitive and recognized by our employees, as evidenced by our having been recognized by Triangle Business Journal as a member of the 2022 class of "Best Places to Work" in the Triangle region of North Carolina, the eighth time we have won this recognition. We have implemented a formal global flexible work policy that provides many of our employees the ability to determine whether they will continue to work from home or from the office, even as our offices around the world reopen following closures during the COVID-19 pandemic. We are not dependent on our physical office locations or travel for our business operations. Refer to "Employees and Human Capital Resources" included in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional information on employees and human capital resources.

•Seasonality. Our revenue fluctuates as a result of seasonal variations in our business, principally due to the peak consumer demand and related increased volume of our customers' GMV during the year-end holiday season. As a result, we have historically had higher revenue in our fourth quarter than other quarters due to increased GMV processed through our platform, resulting in higher variable fees.

OPPORTUNITIES AND RISKS

•Brands. We believe the digital transformation to e-commerce has changed the way brands interact with their customers, which is why we have identified that growing our brands business represents a significant strategic opportunity for us. We generally categorize a customer as a brand if it primarily focuses on selling its own proprietary products. Brands tend to have longer customer life cycles, stronger financial stability and overall better unit economics than retailers, which we consider to be companies focused primarily on selling third-party products. Brands also offer increased expansion opportunities to grow their e-commerce business through our platform; however they tend to have longer sales cycles. To help drive our future growth, we have made significant investments in our sales capacity and incentives to focus on acquiring new, and then expanding business with, brands customers. In addition, we have invested in our services organization to establish a higher level of service for our brands customers and we have prioritized our R&D resources to focus on innovations that enable the success of our brands clients. We believe these investments will improve client results, growing revenue through attracting new prospects and improved retention and expansion with existing customers.

•Dynamic E-commerce Landscape. We need to continue to innovate in the face of a rapidly changing e-commerce landscape if we are to remain competitive.

•Strategic Partnerships. Our business development team's mission is to expand our sales and market opportunities through strategic partner relationships. We plan to continue to invest in initiatives to expand our strategic partnership base to further enhance our offerings for customers and to help support our indirect sales channel efforts. The goal of these strategic partnerships is to further improve the value of our platform for our customers and, when possible, provide us opportunities for incremental revenue streams.

•Increasing Complexity of E-commerce. Although e-commerce continues to expand as brands and retailers continue to increase their online sales, it is also becoming more complex due to the hundreds of channels available to brands and retailers and the rapid pace of change and innovation across those channels. In order to gain consumers' attention in a more crowded and competitive online marketplace, an increasing number of brands and retailers sell their merchandise through multiple online channels, each with its own rules, requirements and specifications. In particular, third-party marketplaces are an increasingly important driver of growth for a number of brands and large online retailers. As a result, we need to continue to support multiple channels in a variety of geographies in order to support our targeted revenue growth, and we intend to continue making strategic investments focused on channel expansion.

•Global Growth in E-commerce. We believe the growth in e-commerce globally presents an opportunity for brands and retailers to engage in international sales. However, country-specific marketplaces are often a market share leader in their regions, as is the case for Zalando in Europe, for example. In order to help our customers capitalize on this potential market opportunity, and to address our customers' needs with respect to cross-border trade, we intend to continue to invest in our international operations. However, doing business overseas involves substantial challenges, including management attention and resources needed to adapt to multiple languages, cultures, laws and commercial infrastructure.

Our senior management continuously focuses on these and other trends and challenges, and we believe that our culture of innovation and our history of growth and expansion will contribute to the success of our business.

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RESULTS OF OPERATIONS

The following tables set forth our condensed consolidated statement of operations data and such data expressed as a percentage of revenues for each of the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,				Period-to-Period Change				Period-to-Period Change
	2022		2021		2022		2021		Q2 2022 to Q2 2021				YTD 2022 to YTD 2021
(dollars in thousands)
Revenue	$	42,802	$	41,543	$	85,099	$	80,709	$	1,259	3.0	%	$	4,390	5.4	%
Cost of revenue	10,407		9,533		20,789		17,941		874		9.2		2,848		15.9
Gross profit	32,395		32,010		64,310		62,768		385		1.2		1,542		2.5
Operating expenses:
Sales and marketing	16,156		15,159		32,102		29,791		997		6.6		2,311		7.8
Research and development	5,380		5,908		10,803		11,435		(528)		(8.9)		(632)		(5.5)
General and administrative	7,448		6,835		14,670		11,717		613		9.0		2,953		25.2
Total operating expenses	28,984		27,902		57,575		52,943		1,082		3.9		4,632		8.7
Income from operations	3,411		4,108		6,735		9,825		(697)		(17.0)		(3,090)		(31.5)
Other income (expense):
Interest income (expense)	45		(33)		17		(66)		78		*		83		*
Other income (expense)	35		(5)		—		(135)		40		*		135		*
Total other income (expense)	80		(38)		17		(201)		118		*		218		*
Income before income taxes	3,491		4,070		6,752		9,624		(579)		(14.2)		(2,872)		(29.8)
Income tax expense (benefit)	1,654		(490)		3,091		(393)		2,144		*		3,484		*
Net income	$	1,837	$	4,560	$	3,661	$	10,017	$	(2,723)	(59.7)	%	$	(6,356)	(63.5)	%

* Not meaningful

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	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(as a percentage of revenue)				(as a percentage of revenue)

















Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	24.3		22.9		24.4		22.2
Gross profit	75.7		77.1		75.6		77.8
Operating expenses:
Sales and marketing	37.7		36.5		37.7		36.9
Research and development	12.6		14.2		12.7		14.2
General and administrative	17.4		16.5		17.2		14.5
Total operating expenses	67.7		67.2		67.7		65.6
Income from operations	8.0		9.9		7.9		12.2
Other income (expense):
Interest income (expense)	0.1		(0.1)		0.0		(0.1)
Other income (expense)	0.1		0.0		0.0		(0.2)
Total other income (expense)	0.2		(0.1)		0.0		(0.2)
Income before income taxes	8.2		9.8		7.9		11.9
Income tax expense (benefit)	3.9		(1.2)		3.6		(0.5)
Net income	4.3	%	11.0	%	4.3	%	12.4	%

Depreciation and Amortization

Depreciation and amortization expense is included in the following line items in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of revenue	$	1,171	$	1,107	$	2,314	$	2,309
Sales and marketing	74		112		145		271
Research and development	32		44		63		107
General and administrative	217		384		442		792
Total depreciation and amortization expense	$	1,494	$	1,647	$	2,964	$	3,479

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REVENUE

We derive the majority of our revenue from subscription fees paid to us by our customers for access to and usage of our software solutions for a specified contract term, which is typically one year. A customer typically pays a recurring subscription fee based on a specified minimum amount of GMV or advertising spend that the customer expects to process through our platform. Subscription fees may also include implementation fees such as launch assistance and training fees. The remaining portion of a customer's fee is variable and is based on a specified percentage of GMV or advertising spend processed through our platform in excess of the customer's specified minimum GMV or advertising spend amount. In most cases, the specified percentage of excess GMV or advertising spend on which the variable fee is based is fixed and does not vary depending on the amount of the excess.

Because our customer contracts generally contain both subscription and variable pricing components, changes in GMV between periods do not translate directly or linearly into changes in our revenue. We use customized pricing structures for each of our customers depending upon the individual situation of the customer. For example, some customers may commit to a higher specified minimum GMV amount per month in exchange for a lower percentage fee on that committed GMV. In addition, the percentage fee assessed on the variable GMV in excess of the committed minimum for each customer is typically higher than the fee on the committed portion. As a result, our overall revenue could increase or decrease even without any change in overall GMV between periods, depending on which customers generated the GMV. In addition, changes in GMV from month to month for any individual customer that are below the specified minimum amount would have no effect on our revenue from that customer, and each customer may alternate between being over the committed amount or under it from month to month. For these reasons, while GMV is an important qualitative and long-term directional indicator, we do not regard it as a useful quantitative measurement of our historic revenues or as a predictor of future revenues.

We recognize subscription fees and implementation fees ratably over the contract period beginning on the date the customer has access to the software. In determining the amount of revenue to be recognized, we apply the following steps:

•Identify the promised services in the contract;

•Determine whether the promised services are performance obligations, including whether they are distinct in the context of the contract;

•Determine the transaction price;

•Allocate the transaction price to the performance obligations based on estimated selling prices; and

•Recognize revenue as we satisfy each performance obligation.

We generally invoice our customers for subscription fees in advance, in monthly, quarterly, semi-annual or annual installments. We generally also invoice our customers for any implementation fees at the inception of the arrangement. Fees that have been invoiced in advance are initially recorded as deferred revenue and are generally recognized ratably over the contract term.

In general, we invoice and recognize variable revenue in the period in which the related GMV or advertising spend is processed.

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Our customers are categorized as follows:

•Brands. We generally categorize a customer as a brand if it primarily focuses on selling its own proprietary products.

•Retailers. We generally categorize a customer as a retailer if it primarily focuses on selling third-party products.

•Other. Other is primarily comprised of strategic partnerships.

Comparison of Q2 2022 to Q2 2021

Revenue increased by 3.0%, or $1.3 million, to $42.8 million for the three months ended June 30, 2022 compared with $41.5 million for the prior year period. The change was primarily due to a $4.1 million increase in subscription revenue compared to the prior year period, driven by positive net bookings, particularly from brands customers. Revenue from our brands customers increased 19.8%, or $3.2 million, compared to the prior year period, driven by an increase in new customers and expansions with existing customers. For the three months ended June 30, 2022, brands customers represented approximately 45% of our total revenue and 49% of total subscription revenue compared to approximately 38% and 44%, respectively, for the prior year period. Variable revenue decreased $2.8 million compared to the prior year period due to customers converting their variable fees to subscription fees upon their annual renewal, as well as moderation in GMV driven by factors such as federal stimulus and Amazon Prime Day occurring in the prior year.

Comparison of YTD 2022 to YTD 2021

Revenue increased by 5.4%, or $4.4 million, to $85.1 million for the six months ended June 30, 2022 compared with $80.7 million for the prior year period. The change was primarily due to a $9.3 million increase in subscription revenue compared to the prior year period, driven by strong net bookings, particularly from brands customers. Revenue from our brands customers increased 25.6%, or $7.7 million, compared to the prior period, driven by an increase in new customers and expansions with existing customers. For the six months ended June 30, 2022, brands customers represented approximately 45% of our total revenue and 49% of total subscription revenue compared to approximately 37% and 43%, respectively, for the prior year period. Variable revenue decreased $4.9 million compared to the prior year period due to customers converting their variable fees to subscription fees upon their annual renewal, as well as moderation in GMV driven by factors such as federal stimulus and Amazon Prime Day occurring in the prior year.

COST OF REVENUE

Cost of revenue primarily consists of:

•Salaries and personnel-related costs for employees providing services to our customers and supporting our platform infrastructure, including benefits, bonuses and stock-based compensation;

•Co-location facility costs for our data centers;

•Infrastructure maintenance costs; and

•Fees we pay to credit card vendors in connection with our customers' payments to us.

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Comparison of Q2 2022 to Q2 2021

Cost of revenue increased by 9.2%, or $0.9 million, to $10.4 million for the three months ended June 30, 2022 compared with $9.5 million for the prior year period. The change was comprised primarily of increases of:

•$0.7 million in compensation and employee-related costs due to an increase in headcount to support the growth of our business and a higher level of service for brands; and

•$0.1 million in contractor costs primarily to support data scraping and our client services team.

Comparison of YTD 2022 to YTD 2021

Cost of revenue increased by 15.9%, or $2.8 million, to $20.8 million for the six months ended June 30, 2022 compared with $17.9 million for the prior year period. The change was comprised primarily of:

•$1.9 million in compensation and employee-related costs due to an increase in headcount to support the growth of our business and a higher level of service for brands;

•$0.6 million in contractor costs primarily to support data scraping and our client services team; and

•$0.3 million in software and website maintenance costs to support the growth of our business.

OPERATING EXPENSES

SALES AND MARKETING EXPENSE

Sales and marketing expense consists primarily of:

•Salaries and personnel-related costs for our sales and marketing employees, including benefits, bonuses and stock-based compensation;

•Amortization of capitalized sales commissions and related incentive payments over their expected term of benefit;

•Marketing, advertising and promotional event programs; and

•Corporate communications.

Comparison of Q2 2022 to Q2 2021

Sales and marketing expense increased by 6.6%, or $1.0 million, to $16.2 million for the three months ended June 30, 2022 compared with $15.2 million for the prior year period. The change was comprised primarily of compensation and employee-related costs due to an increase in headcount, as we continue to invest in resources to support the growth of our business.

Comparison of YTD 2022 to YTD 2021

Sales and marketing expense increased by 7.8%, or $2.3 million, to $32.1 million for the six months ended June 30, 2022 compared with $29.8 million for the prior year period. The change was comprised primarily of compensation and employee-related costs due to an increase in headcount, as we continue to invest in resources to support the growth of our business.

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RESEARCH AND DEVELOPMENT EXPENSE

Research and development expense consists primarily of:

•Salaries and personnel-related costs for our research and development employees, including benefits, bonuses and stock-based compensation;

•Costs related to the development, quality assurance and testing of new technology and enhancement of our existing platform technology; and

•Infrastructure and cloud computing expenses to support our platform.

Comparison of Q2 2022 to Q2 2021

Research and development expense decreased by 8.9%, or $0.5 million, to $5.4 million for the three months ended June 30, 2022 compared with $5.9 million for the prior year period. The change was comprised primarily of compensation and employee-related costs, driven by a larger proportion of our research and development resources being staffed in lower cost locations.

Comparison of YTD 2022 to YTD 2021

Research and development expense decreased by 5.5%, or $0.6 million, to $10.8 million for the six months ended June 30, 2022 compared with $11.4 million for the prior year period. The change was comprised primarily of compensation and employee-related costs, driven by a larger proportion of our research and development resources being staffed in lower cost locations.

GENERAL AND ADMINISTRATIVE EXPENSE

General and administrative expense consists primarily of:

•Salaries and personnel-related costs for administrative, finance and accounting, information systems, legal and human resource employees, including benefits, bonuses and stock-based compensation;

•Consulting and professional fees;

•Insurance;

•Bad debt expense; and

•Costs associated with SEC compliance, including with the Sarbanes-Oxley Act and other regulations governing public companies.

Comparison of Q2 2022 to Q2 2021

General and administrative expense increased by 9.0%, or $0.6 million, to $7.4 million for the three months ended June 30, 2022 compared with $6.8 million for the prior year period. The change was comprised primarily of increases of:

•$0.4 million in compensation and employee related costs, including stock-based compensation, due to an increase in headcount to support the growth of our business; and

•$0.1 million in recruiting costs to support the growth of our business.

Comparison of YTD 2022 to YTD 2021

General and administrative expense increased by 25.2%, or $3.0 million, to $14.7 million for the six months ended June 30, 2022 compared with $11.7 million for the prior year period. The change was comprised primarily of increases of:

•$1.3 million in general administrative costs driven by the prior year benefit from the decrease in the fair value of acquisition-related contingent consideration;

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•$1.1 million in compensation and employee related costs, including stock-based compensation, due to an increase in headcount to support the growth of our business;

•$0.3 million in lease abandonment costs related to right of use lease assets, driven by a reduction in our leased office space; and

•$0.3 million in recruiting costs to support the growth of our business.

ADJUSTED EBITDA

Adjusted EBITDA represents our earnings before interest income (expense), income tax expense (benefit) and depreciation and amortization, adjusted to eliminate stock-based compensation expense, which is a non-cash item. For some periods, we have also adjusted for non-recurring costs, such as lease abandonment and related costs and the change in fair value of acquisition-related contingent consideration.

We believe that adjusted EBITDA provides useful information to management and others in understanding and evaluating our operating results. However, adjusted EBITDA is not a measure calculated in accordance with GAAP and should not be considered as an alternative to any measure of financial performance calculated and presented in accordance with GAAP. In addition, adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate adjusted EBITDA in the same manner that we do.

Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;

•adjusted EBITDA does not reflect interest or income tax payments that may represent a reduction in cash available to us; and

•other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider adjusted EBITDA together with other GAAP-based financial performance measures, including various cash flow metrics, net income and our other GAAP results. The following table presents a reconciliation of net income to adjusted EBITDA for each of the periods indicated (in thousands):

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	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	1,837	$	4,560	$	3,661	$	10,017
Adjustments:
Interest (income) expense	(45)		33		(17)		66
Income tax expense (benefit)	1,654		(490)		3,091		(393)
Depreciation and amortization expense	1,494		1,647		2,964		3,479
Total adjustments	3,103		1,190		6,038		3,152
EBITDA	4,940		5,750		9,699		13,169
Stock-based compensation expense	3,474		3,576		6,606		6,624
Lease abandonment and related costs	—		—		288		—
Contingent consideration fair value adjustment	—		—		—		(1,313)
Adjusted EBITDA	$	8,414	$	9,326	$	16,593	$	18,480

GROSS AND OPERATING MARGINS

Comparison of Q2 2022 to Q2 2021

Gross margin declined by 140 basis points to 75.7% during the three months ended June 30, 2022 compared with 77.1% for the prior year period as a result of the increase in cost of revenue of 9.2% noted above, which exceeded the 3.0% increase in revenue.

Operating margin declined by 190 basis points to 8.0% during the three months ended June 30, 2022 compared with 9.9% for the prior year period due to increases in operating expenses and cost of revenue of 3.9% and 9.2%, respectively, primarily as a result of an increase in compensation and employee-related costs driven by additional headcount as we invest in resources to support the growth of our business.

Comparison of YTD 2022 to YTD 2021

Gross margin declined by 220 basis points to 75.6% during the six months ended June 30, 2022 compared with 77.8% for the prior year period as a result of the increase in cost of revenue of 15.9% noted above, which exceeded the 5.4% increase in revenue.

Operating margin declined by 430 basis points to 7.9% during the six months ended June 30, 2022 compared with 12.2% for the prior year period due to increases in operating expenses and cost of revenue of 8.7% and 15.9%, respectively, primarily as a result of an increase in compensation and employee-related costs driven by additional headcount as we invest in resources to support the growth of our business.

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INCOME TAX EXPENSE

At the end of each interim reporting period, we estimate our effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods.

Comparison of Q2 2022 to Q2 2021

Income tax expense was $1.7 million for the three months ended June 30, 2022 compared with income tax benefit of $(0.5) million for the prior year period. Refer to Note 9, "Income Taxes," to our condensed consolidated financial statements included in this report for additional information regarding income tax expense.

Comparison of YTD 2022 to YTD 2021

Income tax expense was $3.1 million for the six months ended June 30, 2022 compared with income tax benefit of $(0.4) million for the prior year period. Refer to Note 9, "Income Taxes," to our condensed consolidated financial statements included in this report for additional information regarding income tax expense.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, and to the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. There were no material changes to our critical accounting policies and estimates, which are disclosed in our audited consolidated financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K for fiscal 2021.

Recent Accounting Pronouncements

Refer to Note 2, "Significant Accounting Policies," to our condensed consolidated financial statements included in this report for information regarding recent accounting pronouncements.

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LIQUIDITY AND CAPITAL RESOURCES

We derive our liquidity and operating capital primarily from cash flows from operations. Based on our current level of operations and anticipated growth, we believe our future cash flows from operating activities and our existing cash balances will be sufficient to meet our cash requirements for at least the next twelve months.

The foregoing estimate does not give effect to any potential amounts that we may draw under our credit facility, or Credit Facility, with HSBC Bank, or HSBC, that is described in more detail below.

Our principal future commitments consist of non-cancelable leases for our current and future office space and computer equipment, totaling $11.9 million as of June 30, 2022. We believe our future cash flows from operating activities and existing cash balances, together with amounts available under the Credit Facility, will be sufficient to meet these commitments.

CASH FLOWS

Free Cash Flow

We view free cash flow as an important financial metric as it demonstrates our ability to generate cash and can allow us to pursue opportunities that enhance shareholder value. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for, measures of our financial performance prepared in accordance with GAAP. The following table presents a reconciliation of cash provided by operating activities, the most directly comparable GAAP measure, to free cash flow for each of the periods indicated (in thousands):


	Six Months Ended June 30,
	2022		2021
Cash and cash equivalents provided by operating activities	$	13,727	$	17,586
Less: Purchases of property and equipment	(1,138)		(494)
Less: Payment of capitalized software development costs	(1,955)		(1,631)
Free cash flow	$	10,634	$	15,461

Free cash flow decreased by $4.8 million to $10.6 million for the six months ended June 30, 2022 compared with $15.5 million for the prior year period. The decrease in free cash flow was primarily a result of an increase in operating expenses to support the growth of our business and changes in assets and liabilities, which are further described below.

Operating activities cash flows are largely driven by:

•The amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business;

•The amount and timing of customer payments; and

•The seasonality of our business, as noted above, which results in variations in the timing of invoicing and the receipt of payments from our customers.

Investing activities cash flows are largely driven by:

•Capitalized expenditures to create internally developed software and implement software purchased for internal use; and

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•Purchases of property and equipment to support the expansion of our infrastructure.

Financing activities cash flows are largely driven by:

•Proceeds from the exercises of stock options;

•Tax withholdings related to the net-share settlement of restricted stock units;

•Repurchases of our common stock;

•Payments on finance lease obligations; and

•Payment of financing costs.

YTD 2022

Operating Activities

Our cash provided by operating activities of $13.7 million consisted of net income of $3.7 million adjusted for non-cash items totaling $10.9 million, which consisted of stock-based compensation expense, depreciation and amortization expense, bad debt expense and other non-cash items, including lease abandonment costs, and cash decreases of $0.8 million from changes in assets and liabilities.

The net decrease in cash of $0.8 million resulting from changes in assets and liabilities primarily consisted of:

•a $2.9 million decrease in accrued expenses and accounts payable due to the payment of bonuses earned in the prior year, as well as the timing of payments to our vendors during the period; and

•a $1.7 million increase in deferred contract costs consisting of sales commissions and a portion of other incentive compensation driven by net bookings performance. These contract costs are deferred and amortized to expense over the expected period of benefit. These decreases in cash were partially offset by increases in cash due to:

•a $2.1 million increase in deferred revenue driven by positive net bookings and the timing of invoicing during the period; and

•a $1.8 million decrease in accounts receivable driven by strong cash collections during the period.

Investing Activities

Our cash used in investing activities of $3.1 million consisted of:

•$2.0 million of capitalized software development costs; and

•$1.1 million of capital expenditures primarily related to the purchase of computer equipment.

Financing Activities

Our cash used in financing activities of $26.5 million consisted of:

•$25.0 million in cash used for the repurchase of our common stock; and

•$1.9 million used for the payment of taxes related to the net-share settlement of restricted stock units; partially offset by

•$0.4 million in cash received upon the exercise of stock options.

YTD 2021

Operating Activities

Our cash provided by operating activities of $17.6 million consisted of net income of $10.0 million adjusted for non-cash items totaling $7.5 million, which consisted of stock-based compensation expense, depreciation and amortization expense, bad debt expense and other non-cash items, including the contingent consideration fair value adjustment, and cash increases of $0.1 million from changes in assets and liabilities.

The net increase in cash of $0.1 million resulting from changes in assets and liabilities primarily consisted of:

•a $4.4 million increase in deferred revenue as a result of an increase in net bookings during the period. This increase in cash was partially offset by decreases in cash due to:

•a $3.3 million increase in deferred contract costs consisting of sales commissions and a portion of other incentive compensation that is deferred and amortized to expense over the expected period of benefit;

•a $0.5 million increase in accounts receivable driven by strong net bookings performance during the period;

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•a $0.3 million increase in prepaid expenses and other assets driven by the timing of payments to our vendors during the period; and

•a $0.2 million decrease in accrued expenses and accounts payable primarily due to the payment of bonuses earned in the prior year.

Investing Activities

Our cash used in investing activities of $2.1 million consisted of:

•$1.6 million of capitalized software development costs; and

•$0.5 million of capital expenditures primarily related to the purchase of computer equipment.

Financing Activities

Our cash provided by financing activities of $3.4 million consisted of:

•$3.7 million in cash received upon the exercise of stock options; partially offset by

•$0.3 million used for the payment of taxes related to the net-share settlement of restricted stock units.

SHARE REPURCHASE PROGRAM

In August 2021, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $25.0 million of our common stock through August 10, 2022. During the three months ended June 30, 2022, 1,828,604 shares were repurchased and retired under the repurchase program at an average price of $13.67 per share for an aggregate total price of $25.0 million, which completed the share repurchase program authorized in August 2021.

In June 2022, our Board of Directors authorized an additional share repurchase program of up to $25.0 million of our common stock through June 30, 2023. We had not repurchased any shares under the June 2022 authorization as of June 30, 2022. Repurchases may be made from time to time on the open market at prevailing prices, including pursuant to Rule 10b5-1 trading plans, or in negotiated transactions off the market. The share repurchase program does not obligate us to repurchase any particular amount of our shares.

CREDIT FACILITY

On August 5, 2020, we established the Credit Facility with HSBC under which we may borrow up to $25 million. We may use proceeds from borrowings under the Credit Facility for working capital and general corporate purposes, including acquisitions, and up to $10 million is available for letters of credit. We may also request increases in the amount of the Credit Facility, with such increases not to exceed $10 million in the aggregate, subject to HSBC’s consent. As of the date of this report, we have not drawn on, or issued any letters of credit under, the Credit Facility. The Credit Facility matures in August 2023.

Any borrowings under the Credit Facility will bear interest at a per annum interest rate based on a base rate plus 2.25% or LIBOR plus 3.25%. The base rate will equal the highest of (a) the prime rate as publicly announced by HSBC, (b) the sum of (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System plus (ii) 0.50%, and (c) the LIBOR rate plus 1.00% per annum, with a floor of 1.50%. The LIBOR rate will be based on London interbank offered rates published by ICE Benchmark Administration Limited for the applicable interest period, with a floor of 0.50%. We will pay a fee on all outstanding letters of credit at a rate of 3.25% per annum. We will pay HSBC a commitment fee on the undrawn portion of the facility at a rate per annum equal to 0.50%. We may terminate the Credit Facility, or prepay any borrowings, at any time in our discretion without premium or penalty.

The credit agreement for the Credit Facility, or the Credit Agreement, contains affirmative and negative covenants. For example, we may not permit the ratio of our outstanding indebtedness to consolidated EBITDA to exceed 2.50 to 1.00 as of the last day of any fiscal quarter. We also may not permit the ratio of our consolidated EBITDA (minus maintenance-related capital expenditures paid in cash and minus dividends, distributions and stock repurchases paid in cash) to consolidated interest expense to be less than 3.00 to 1.00 for any period of four consecutive fiscal quarters.

The Credit Agreement contains customary events of default. Upon the occurrence and during the continuance of an event of default, HSBC may terminate the commitments under the Credit Facility and declare the outstanding advances and all other obligations under the Credit Facility immediately due and payable.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss to future earnings, values or future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, exchange rates, commodity prices, equity prices and other market changes. We are exposed to market risk related to changes in foreign currency exchange rates. Although we have not drawn on our Credit Facility, we may do so in the future which may subject us to risks from changing interest rates. We do not use derivative financial instruments for speculative, hedging or trading purposes, although in the future we may enter into exchange rate hedging arrangements to manage foreign currency exchange risk. During the six months ended June 30, 2022, there were no material changes to our market risks from those disclosed in our Annual Report on Form 10-K for fiscal 2021.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of such date at the reasonable assurance level.

(b) Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting during our fiscal quarter ended June 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to litigation and claims arising in the ordinary course of business, but we are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

ITEM 1A. RISK FACTORS

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 10, 2022, for a detailed discussion of risk factors affecting us. Our risk factors as of the date of this report have not changed materially from those disclosed in our Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information with respect to repurchases of our common stock during the three months ended June 30, 2022:


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (in thousands)
April 1, 2022 through April 30, 2022	—	$	—	—	$	25,000
May 1, 2022 through May 31, 2022	891,412	$	13.03	891,412	$	13,382
June 1, 2022 through June 30, 2022	937,192	$	14.28	937,192	$	—
Total	1,828,604	$	13.67	1,828,604

In August 2021, our Board of Directors approved the repurchase of up to $25.0 million of our common stock through August 10, 2022. All shares listed above were purchased under this authorization in open market transactions, pursuant to a Rule 10b5-1 trading plan. In June 2022, our Board of Directors authorized an additional share repurchase program of up to $25.0 million of our common stock through June 30, 2023, all of which remained available as of June 30, 2022.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS


Exhibit Number		Description of Document

3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K (File No. 001-35940), filed with the Securities and Exchange Commission on May 29, 2013).

3.2		Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K (File No. 001-35940), filed with the Securities and Exchange Commission on February 22, 2021).

4.1		Specimen stock certificate evidencing shares of Common Stock (incorporated herein by reference to Exhibit 4.2 of the Company's Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-187865), filed with the Securities and Exchange Commission on May 9, 2013).

10.1	+	Second Amended and Restated Executive Severance and Change in Control Letter Agreement, by and between the Company and David Spitz, dated as of June 14, 2022.

10.2	+	Amended and Restated Executive Severance and Change in Control Letter Agreement, by and between the Company and Richard Cornetta, dated as of June 14, 2022.

10.3	+	Second Amended and Restated Executive Severance and Change in Control Letter Agreement, by and between the Company and Elizabeth Segovia, dated as of June 14, 2022.

10.4	+	Form of Amendment to Performance Stock Unit Award Agreements, dated as of June 14, 2022, by and between the Company and its executive officers.

31.1	*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.

31.2	*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.

32.1	**	Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.

101.INS	*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	*	Inline XBRL Taxonomy Extension Schema Document

101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

+ Indicates management contract or compensatory plan.

** These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CHANNELADVISOR CORPORATION

Date:

August 9, 2022

By:

/s/ Richard F. Cornetta

Richard F. Cornetta

Chief Financial Officer

(On behalf of the Registrant and as Principal Financial Officer)

Document

SECOND AMENDED AND RESTATED EXECUTIVE SEVERANCE
AND CHANGE IN CONTROL LETTER AGREEMENT

Dear David:

This Second Amended and Restated Executive Severance and Change in Control Letter Agreement (the “Agreement”) is made and entered into effective as of June 14, 2022 by and between ChannelAdvisor Corporation (“ChannelAdvisor”) and David Spitz (“You”) to set forth certain obligations if Your employment with ChannelAdvisor is terminated under different scenarios. This Agreement amends and restates in its entirety the Amended and Restated Executive Severance and Change of Control Letter Agreement between You and ChannelAdvisor dated December 17, 2014, as amended December 31, 2018 and November 11, 2019, and is effective as of the date above.

1.Definitions

“Award” shall mean any rights held by You to receive shares of ChannelAdvisor stock under a ChannelAdvisor equity incentive plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Performance Stock Award, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, or any Other Stock Award, each as defined in the applicable ChannelAdvisor equity incentive plan.

“Change in Control” shall have the meaning stated in the ChannelAdvisor Corporation 2013 Equity Incentive Plan, as amended from time to time. If required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of’ ChannelAdvisor or “a change in the ownership of a substantial portion of the assets of’ ChannelAdvisor as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). ChannelAdvisor may, in its sole discretion and without Your consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.

“For Cause” termination shall mean the termination of Your employment for (i) Your conviction of, or plea of nolo contendere to, a felony involving fraud, moral turpitude or dishonesty; (ii) Your willful participation in a fraud or act of dishonesty against ChannelAdvisor, or Your breach of Your fiduciary duty to ChannelAdvisor, which results in material harm or damage to ChannelAdvisor; (iii) willful violation of a reasonable ChannelAdvisor written policy that causes material harm or damage to ChannelAdvisor that is not cured within thirty days after written notice thereof; (iv) Your intentional damage to ChannelAdvisor’s real and intellectual property which results in harm to ChannelAdvisor; (v) Your death; or (vi) Your physical or mental inability to perform substantially all of Your duties for a period of one hundred eighty (180) days, whether or not consecutive, during any 365-day period.

“Good Reason” termination shall mean the termination of Your employment by Your resignation in the following circumstances: (i) the forced relocation of You to a location that is outside of a thirty (30) mile radius of Morrisville, NC; or (ii) a material reduction in Your total compensation which is not a part of a general reduction or other concessionary arrangement affecting all employees or affecting all senior executive officers on a pro rata, equitable basis. For each event listed in (i) and (ii) above, You shall give ChannelAdvisor notice thereof within ninety (90) days of the initial existence of the event, after which date ChannelAdvisor shall have no less than thirty (30) days to cure the event which would otherwise constitute Good Reason and You must terminate Your employment with the Company for such Good Reason no later than one (1) year after the initial existence of the event giving rise to Good Reason.

“Resignation” shall mean Your resignation of employment from ChannelAdvisor in circumstances other than Good Reason.

“Termination Date” shall mean the date Your employment at ChannelAdvisor ends.

2.Compensation and Benefits Upon Termination

(A)By ChannelAdvisor For Cause or by You Upon Resignation

If ChannelAdvisor terminates Your employment For Cause or You submit Your Resignation, You shall not be entitled to any of the severance benefits in Sections 2(B) or 2(C) below. However, on the next regularly scheduled payroll date after the Termination Date, ChannelAdvisor shall pay You (i) all earned and unpaid salary and variable compensation, if any, payable pursuant to the applicable variable compensation plan, through the Termination Date; (ii) all accrued and unused vacation time in accordance with ChannelAdvisor policies; and (iii) all of Your outstanding business expenses incurred through the Termination Date pursuant to ChannelAdvisor policies, provided that You submit invoices in accordance with ChannelAdvisor policies (collectively, the “Employment Termination Payments”).

(B)By ChannelAdvisor other than for Cause or by You for Good Reason

If ChannelAdvisor terminates Your employment, other than For Cause, or You terminate Your employment for Good Reason, and provided that such termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-l(h)) (a “Separation From Service”), You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of a waiver and release in substantial conformity with the form attached hereto as Attachment 1 (“Severance Agreement”):

(1)ChannelAdvisor shall pay to You a payment equal to twelve (12) months of Your base compensation (“Base Compensation”).

In addition, ChannelAdvisor shall pay to You either:

(a)if Your compensation includes a quarterly variable incentive component and the Termination Date is not the last day of the calendar quarter, then one calendar quarter of Your then current quarterly variable incentive compensation calculated at 100% achievement; OR

(b)if Your compensation includes an annual variable incentive compensation component and the Termination Date is not the last day of the calendar year, a prorated share (for the period from the beginning of the calendar year to the Termination Date) of Your then current annual variable compensation calculated at 100% achievement.

Payment of the amounts in this Section 2(B)(l) shall be made in a one time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date.

(2)If You timely and properly elect COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor shall pay the monthly premium for the coverage directly to the insurance provider for a period of up to 12 months following the Termination Date. If You receive subsequent employment that includes one or both of these benefits, then upon the first date You are eligible to receive the benefits, You shall promptly notify ChannelAdvisor in writing. Upon receipt of Your notice, ChannelAdvisor shall cease payment for any benefits that are provided by Your new employer. If You delay in notifying ChannelAdvisor of a change in benefits status, You shall promptly return all overpayments.

(3)ChannelAdvisor shall accelerate vesting of all of the Awards that are unvested as of the Termination Date by one quarter of a year (3 months), and any outstanding performance-vesting Awards (including, for the avoidance of doubt, any

performance stock units (“PSUs”) that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable award agreements (the “Performance-Based Award Agreements”).

(4)ChannelAdvisor shall extend the exercise period for the Awards until two (2) years from the Termination Date, but in no event will the exercise period extend beyond the original term of the Award.

(C)Termination in Connection with Change in Control Event

(1)ChannelAdvisor shall pay to You a payment equal to two years of Your Base Compensation.

In addition, ChannelAdvisor shall pay to You either:

Payment of the amounts in this Section 2(C)(1) shall be made in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date.

(2)If You timely and properly elect COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor shall pay the monthly premium for the coverage directly to the insurance provider for a period of up to 18 months following the Termination Date. If You receive subsequent employment that includes one or both of these benefits, then upon the first date You are eligible to receive the benefits, You shall promptly notify ChannelAdvisor in writing. Upon receipt of Your notice, ChannelAdvisor shall cease payment for any benefits that are provided by Your new employer. If You delay in notifying ChannelAdvisor of a change in benefits status, You shall promptly return all overpayments.

(3)ChannelAdvisor shall fully accelerate vesting of all of the time-vesting Awards that are unvested as of the Termination Date, with the effect that all such Awards shall be fully vested and exercisable as of the Termination Date. In addition, Your outstanding performance-vesting Awards (including, for the avoidance of doubt, any PSUs that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable Performance-Based Award Agreements.

(4)ChannelAdvisor shall extend the exercise period for the Awards until two (2) years from the Termination Date, but in no event will the exercise period extend beyond the original term of the Award.

(5) The Severance Agreement shall reflect the benefits stated in this Section 2(C).

3.Section 280G

(A)Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if (i) any of the payments or benefits provided or to be provided by ChannelAdvisor to You or for Your benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute “parachute payments” within the meaning of Section 280G of the Code subject to the excise tax imposed under Section 4999 of the Code (or any successor provision) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), and (ii) the net after-tax amount of such Covered Payments, after You have paid all taxes due thereon (including, without limitation, the Excise Tax), is less than the net after-tax amount of all such Covered Payments otherwise due to You in the aggregate, if such Covered Payments were reduced to an amount equal to 2.99 times Your “base amount” as defined in Section 280G(b)(3) of the Code, then the aggregate amount of such Covered Payments shall be reduced (but not below zero) to an amount that will equal 2.99 times Your base amount; provided, however, that such reduction will be made only if it results in You retaining a greater portion of Covered Payments on an after-tax basis (taking into account the Excise Tax and applicable federal, state, and local income and payroll taxes).

(B)To the extent such Covered Payments are required to be reduced, any such reduction shall be made by in accordance with Section 409A of the Code and the following:

(i)the Covered Payments which do not constitute nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first;

(ii)all other Covered Payments shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date; and

(iii)in the event that accelerated vesting of Awards is to be reduced, such acceleration will be cancelled in the reverse order of the dates on which the Awards were granted.

(C)You shall provide ChannelAdvisor with such information and documents as ChannelAdvisor may reasonably request in order to make a determination under this Section 3.

4.Compliance with Section 409A of the Code

It is intended that all of the payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions. If any of the payments are not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A of the Code, and incorporates by reference all required definitions and payment terms. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Your right to receive any installment payments under this Agreement (whether severance payments, expense reimbursements or otherwise) will be treated as a right to receive a series of separate payments and, accordingly, each installment payment under this Agreement will at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, if You are deemed by ChannelAdvisor at the time of Your Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments, including the severance benefits provided under this Agreement, upon Separation From Service set forth herein and/or under any other agreement with ChannelAdvisor are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A of the Code, such payments will not be provided to You prior to the earliest of (i) the expiration of the six (6)-month period measured from the date of Your Separation From Service with ChannelAdvisor, (ii) the date of Your death or (iii) such earlier date as permitted under Section 409A of the Code without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Paragraph will be paid in a lump sum to You, and any remaining payments due will be paid as otherwise provided in this Agreement or in the applicable agreement. No interest will be due on any amounts so deferred.

5.Special Terms and Conditions of Employment

You acknowledge and agree that You remain subject to the ChannelAdvisor Corporation Special Terms and Conditions of Employment between You and ChannelAdvisor dated April 1, 2006, as may be amended from time to time (the “Special Terms”). Notwithstanding anything therein to the contrary, in the event that Your employment terminates under the circumstances set forth in either Section 2(B) or 2(C) hereof, the term of the restrictions set forth in Section 12(f) of the Special Terms will be (a) twelve (12) months following the termination of Your employment, to the extent Your employment terminates pursuant to Section 2(B), or (b) twenty-four (24) months following the termination of Your employment, to the extent Your employment terminates pursuant to Section 2(C).

6.General

ChannelAdvisor shall take any required corporate actions needed as of the Termination Date to ensure the acceleration of the Awards and extension of the exercise period as described in this Agreement. This Agreement constitutes the entire agreement between the parties with respect to termination of Your employment with ChannelAdvisor except for the Special Terms (as amended hereby) and the Performance-Based Award Agreements. If there is a conflict between the terms of this and any other agreement between You and ChannelAdvisor, this Agreement shall control. Any amendments to this Agreement and any material changes to Attachment 1 hereto must be in writing and executed by both parties. This Agreement may be entered into by each party in separate counterparts and shall constitute one fully executed Agreement upon execution by both You and ChannelAdvisor. This Agreement shall be construed in accordance with the laws of the State of North Carolina, without regard to conflict of laws principles. If the parties enter into legal proceedings in dispute of any of the terms of this Agreement, the losing party shall pay all reasonable legal fees of the prevailing party. This Agreement is binding upon ChannelAdvisor’s successors (whether by merger, sale of stock, or sale of all or substantially all its assets) and assigns.

Sincerely,

CHANNELADVISOR CORPORATION

Kathryn F. Twiddy

VP, General Counsel & Secretary


Accepted and agreed to by:


David Spitz

Attachment 1 To The Agreement

SEVERANCE AGREEMENT

This Severance Agreement (“Severance Agreement”), containing a release and waiver among other terms, is made as of the day of , by and between David Spitz (“Employee”) and ChannelAdvisor Corporation, for the benefit of its employees, officers, directors, successors and assigns (collectively and individually, “ChannelAdvisor”).

1.Separation. Employee’s last day of work with ChannelAdvisor and Employee’s employment termination date will be (the “Separation Date”).

2.Payment to Employee.

(a)Accrued Compensation. Employee agrees that, upon payment by ChannelAdvisor of Employee’s earned salary and variable compensation, if any, payable pursuant to the applicable variable compensation plan through the Separation Date (collectively, “Compensation”), Employee has received from ChannelAdvisor all compensation due to Employee. Employee further agrees that Employee will be paid for all accrued and unused vacation time due to Employee in accordance with ChannelAdvisor policies. The ChannelAdvisor vacation policy is that upon termination, eligible employees are paid for accrued but unused vacation, up to a maximum of 40 hours. Employee will receive these Compensation and vacation payments on the first regular pay date following the Separation Date in accordance with ChannelAdvisor’s normal pay cycle, regardless of whether or not Employee signs this Severance Agreement

(b)Expense Reimbursements. If Employee has been issued any ChannelAdvisor credit or calling cards, ChannelAdvisor will cancel these card(s) effective as of the Separation Date. Employee agrees that, on the Separation Date, Employee will submit Employee’s final documented expense reimbursement statement reflecting all business expenses Employee incurred through the Separation Date, if any, for which Employee seeks reimbursement. ChannelAdvisor will reimburse Employee for reasonable business expenses pursuant to ChannelAdvisor’s regular business practice. Employee will receive these payments regardless of whether or not Employee signs this Severance Agreement

(c)Severance Payment and Benefits. In accordance with and subject to the terms of that certain Second Amended and Restated Executive Severance and Change in Control Letter Agreement between Employee and ChannelAdvisor dated [__], 2022 (as may be amended from time to time, the “Agreement”) in particular, the requirement that this Severance Agreement becomes effective by the sixtieth (60th) day following the Separation Date as provided in Paragraph 11 of this Severance Agreement, ChannelAdvisor will:

(1)pay Employee an amount equal to $ pursuant to Section 2(B)(l) of the Agreement, which total amount shall be paid in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Separation Date, and,

(2)if Employee timely and properly elects COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor will pay the monthly premium for the coverage directly to the insurance provider for a period of up to 12 months. If Employee receives subsequent employment that includes one or both of these benefits, then upon the first date Employee is eligible to receive the benefits, Employee shall promptly notify ChannelAdvisor in writing. Upon receipt of Employee’s notice, ChannelAdvisor shall cease payment for any benefits that are being provided by Employee’s new employer. If Employee delays in notifying ChannelAdvisor of the change in benefits status, Employee shall promptly return all overpayments.

(d)Withholding. Employee agrees that all payments made pursuant to this Paragraph are compensation income and that ChannelAdvisor will make these payments net of applicable withholding and other employment related truces, with withholding on payments under Paragraph 2(c) shall be made at the lower of Employee’s normal withholding rate or the statutory rate for supplemental wages.

(e)No Other Payments Related to Employment. Employee agrees that upon payment of the amounts specified in Paragraphs 2(a), (b) and (c) no further amounts (including without limitation base salary, bonus, incentive or variable compensation, equity, severance or benefits) are due to Employee from ChannelAdvisor for any cause or reason with respect to, related to, or arising from Employee’s employment with ChannelAdvisor after the Separation Date except as otherwise set forth in this Severance Agreement.

(f)Awards. Exhibit A states the number of Awards (as defined in the Agreement) held by Employee to receive shares of ChannelAdvisor stock under a ChannelAdvisor equity incentive plan and vested as of the Separation Date, after giving effect to any applicable acceleration provisions in the Agreement relating to the Awards. Upon expiration of an Award, Employee shall have no further rights under the Award.

3.Worker’s Compensation, 401(k) Plan and other Benefits. Employee understands that this Severance Agreement does not affect any rights Employee may have with respect to any applicable worker’s compensation claims, but represents that as of the execution of this Severance Agreement Employee has no injuries or physical or mental limitations, restrictions or impairments that preclude Employee from working in any way and has not suffered any on-the-job injury for which Employee has not already filed a claim. Employee understands that Employee’s right to participate in all ChannelAdvisor employee benefit plans terminates on the Separation Date, except for continuation of medical and dental coverage as provided herein. Any benefits accrued and vested as of the Separation Date and which, by their express terms, survive any termination of employment, shall survive in accordance with their respective terms. Following the Separation Date, the ChannelAdvisor 401(k) Plan administrator will provide Employee with information regarding the distribution and/or rollover of any 401(k) funds.

4.Ongoing Obligations. Employee acknowledges that all obligations under the applicable ChannelAdvisor Corporation Special Terms and Conditions of Employment by and between ChannelAdvisor and Employee, dated April 1, 2006 (as may be amended from time to time, the “Special Terms”), shall continue and shall remain in full force and effect following Employee’s termination in accordance with the terms and conditions of the Special Terms. In particular, Employee understands that all obligations concerning non-disclosure and non-use of confidential information, ownership of confidential information and work product, assistance after employment and non-competition shall continue in accordance with the terms and conditions of the Special Terms. Employee acknowledges that Employee will abide by the terms set forth in the Special Terms, including without limitation the terms regarding noncompetition, nondisclosure and non-use of confidential information.

5.Pre-Employment Excluded Work Product. If Employee listed certain excluded pre-employment work product or creation (collectively, “Excluded Work Product”) from ChannelAdvisor Ownership in Employee’s Special Terms, Employee represents and warrants that no Excluded Work Product, as defined in the Special Terms, was ever included in any product, process, methodology, service, or machine that Employee worked on or worked in conjunction with while employed with ChannelAdvisor. Without limiting the preceding, if in the course of Employee’s employment with ChannelAdvisor, Employee incorporated, whether intentional or incidental, Excluded Work Product into a ChannelAdvisor product, process, methodology, service, or machine, ChannelAdvisor is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, fully-paid, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, make (and own) derivative works of, publicly perform, use, sell, import, and exercise any and all present and future rights in such Excluded Work Product

6.Return of Property. By the Separation Date, Employee shall return to ChannelAdvisor all property of ChannelAdvisor, whether tangible or intangible, in Employee’s possession or control, including without limitation, the ChannelAdvisor laptop computer Employee has been using, electronic storage devices, and any other equipment provided by ChannelAdvisor (without deletion of any information stored thereon), company credit cards and calling cards, ChannelAdvisor office keys, and any documents, books, rolodexes (in paper or electronic form), or other information, and all copies thereof. Please coordinate return of ChannelAdvisor property with [ ]. Employee represents that as of the Separation Date, Employee does not have any other ChannelAdvisor equipment, materials, resources or confidential information in Employee’s possession or under Employee’s control. Receipt of the payments and benefits described in this Severance Agreement is expressly conditioned upon return of all ChannelAdvisor property.

7.Confidentiality. The provisions of this Severance Agreement will be held in strictest confidence by Employee and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) Employee may disclose this Severance Agreement to Employee’s immediate family; (b) Employee may disclose this Severance Agreement in confidence to Employee’s attorney, accountant, auditor, tax preparer, and financial advisor; and (c) Employee may disclose this Severance Agreement to the extent required by law, a governmental investigatory agency or legal process.

8.Nondisparagement. Employee agrees not to disparage ChannelAdvisor or ChannelAdvisor’s attorneys, directors, managers, partners, employees, agents and affiliates, in any manner likely to be harmful to them or their business, business reputation or personal reputation; provided that Employee may respond accurately and fully to any question, inquiry or request for information by a governmental investigatory agency or when required by legal process. ChannelAdvisor and its directors, officers and employees agree not to disparage Employee in any manner likely to be harmful to the goodwill and good reputation of Employee, provided that ChannelAdvisor may respond accurately and fully to any question, inquiry, or request for information when required by a governmental investigatory agency or legal process.

9.Inquiries. In consideration of the payments and benefits provided to Employee by this Severance Agreement, Employee agrees to answer from time to time, inquiries from ChannelAdvisor related to work undertaken by Employee during Employee’s employment with ChannelAdvisor.

10.Waiver and Release.

(d)In consideration of the payments and benefits made pursuant to this Severance Agreement the sufficiency of which is hereby acknowledged, Employee hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, fully releases and discharges ChannelAdvisor (and its officers, directors, employees, agents and representatives) of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff, demands or liability whatsoever of every name and nature, both at law and in equity [[Applicable only if over 40] including, by way of example and not limitation, rights and claims arising under the Age Discrimination in Employment Act (the “ADEA”) of 1967, as amended, the Older Worker Benefit Protection Act], Title VII of the Civil Rights Act of 1964, as amended, Sections 1981 - 1983 of Title 42 of the United States Code, the Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, and any other applicable state and federal employment discrimination laws, breach of contract (including without limitation breach of contract to provide Employee with additional stock in ChannelAdvisor), unpaid expenses or benefits, wrongful discharge, interference with contract, breach of any ChannelAdvisor policy, practice or procedure, negligence, the Employee Income Retirement Security Act of 1974, as amended, loss of consortium, loss of fringe benefits, fraud, misrepresentation, defamation and/or all other claims of tortious conduct which Employee or Employee’s successors in interest or assigns now have, ever have had, or can, shall or may have, as of the date hereof, whether known or unknown, suspected or unsuspected, against ChannelAdvisor arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date Employee executes this Severance Agreement; provided however that this waiver and release does not cover any claim Employee may have for breach of the terms of this Severance Agreement by ChannelAdvisor and does not affect Employee’s right and ability to enforce the terms of this Severance Agreement. Employee represents that Employee has no lawsuits, claims or actions pending in Employee’s name, or on behalf of any other person or entity, against ChannelAdvisor or any other person or entity subject to the release granted in this Paragraph. Notwithstanding the foregoing, Employee is not releasing ChannelAdvisor from any claims that cannot be waived by law, Employee is not releasing ChannelAdvisor from any obligation undertaken in any preexisting obligation to indemnify Employee pursuant to ChannelAdvisor articles and bylaws or applicable law, and Employee is not waiving Employee’s right to make any claim, charge or complaint with any governmental agency or participate in an investigation by any such agency. Employee is waiving, however, Employee’s right to any monetary or other relief if any governmental agency or entity, including without limitation the U.S. Equal Employment Opportunity Commission or the federal or a state department of labor, pursues any claims on Employee’s behalf.

(e)In consideration of the execution of this Severance Agreement by Employee, ChannelAdvisor hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, releases and discharges Employee of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff; demands or liability whatsoever of every name and nature, both at Law and in Equity which ChannelAdvisor or its successors in interest or assigns now have, ever have had, or can, shall or may have, whether known or unknown, suspected or unsuspected, against Employee arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date hereof. ChannelAdvisor represents that ChannelAdvisor has no lawsuits, claims or actions pending in ChannelAdvisor’s name, or on behalf of any person or entity, against the Employee or any other person or entity subject to the release granted in this Paragraph. ChannelAdvisor warrants and covenants it shall maintain for at least six (6) years following Employee’s Termination Date, liability insurance coverage (Director’s and Officer’s liability insurance coverage or tail coverage), sufficient to cover (but no less than $3 million dollars) Employee’s actions as a director and/or officer of ChannelAdvisor with respect to matters arising prior to or as of Employee’s Termination Date.

11.ADEA Waiver. [Applicable only if over 40] Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA, as amended. Employee also acknowledges that (i) the consideration given to Employee in exchange for the waiver and release in this Severance Agreement is in addition to anything of value to which Employee was already entitled, and (ii) that Employee has been paid for all time worked and has received all the leave, leaves of absence and leave benefits and protections for which Employee is eligible. Employee further acknowledges that Employee has been advised by this writing that: (a) Employee’s waiver and release do not apply to any rights or claims that may arise after the execution date of this Severance Agreement; (b) Employee has been advised hereby that Employee should consult with an attorney prior to executing this Severance Agreement; (c) Employee twenty-one (21) days to consider this Severance Agreement (although Employee may choose to voluntarily execute this Severance Agreement earlier and, if Employee does, Employee will sign the Consideration Period waiver below); (d) Employee has seven (7) days following Employee’s execution of this Severance Agreement to revoke the Severance Agreement in writing and actually delivered to [ ] at ChannelAdvisor; and (e) this Severance Agreement shall not be effective until the date upon which the revocation period has expired unexercised, which shall be the eighth day after this Severance Agreement is executed by Employee (the “Effective Date”).

12.No Admission. This Severance Agreement does not constitute an admission by ChannelAdvisor of any wrongful action or violation of any federal, state, or local statute, or common law rights, including without limitation those relating to the provisions of any law or statute concerning employment actions, or of any other possible or claimed violation of law or rights.

13.Breach. Employee agrees that upon any breach of this Severance Agreement by Employee, Employee will forfeit all amounts paid or owing to Employee under this Severance Agreement and ChannelAdvisor will be relieved of its obligations hereunder except to the extent that such forfeiture and relief would result in an invalidation of the release set forth above. Further, Employee acknowledges that it may be impossible to assess the damages caused by Employee’s violation of the terms of Paragraphs 4 to 11 of this Severance Agreement and further agrees that any threatened or actual violation or breach of those paragraphs of this Severance Agreement will constitute immediate and irreparable injury to ChannelAdvisor. Employee therefore agrees that any such breach of this Severance Agreement is a material breach of this Severance Agreement, and, in addition to any and all other damages and remedies available to ChannelAdvisor upon Employee’s breach of this Severance Agreement, ChannelAdvisor shall be entitled to an injunction to prevent Employee from violating or breaching this Severance Agreement.

14.Reliance. Employee acknowledges and represents that in executing this Severance Agreement Employee is not relying, and has not relied, upon any representation or statement not expressly stated in this Severance Agreement made by ChannelAdvisor, its agents, employees, representatives, or agents with regard to the subject matter of this Severance Agreement

15.Waiver. No waiver of any right or remedy with respect to any occurrence or event shall be valid unless it is in writing and executed by the waiving party, and further no such valid waiver shall be deemed a waiver of such right or remedy with respect to such occurrence or event in the future, and shall not excuse a subsequent breach of the same term.

16.Successors and Assigns. This Severance Agreement is binding upon the parties hereto, and their respective heirs, successors and assigns.

17.Legal Review. Both parties have had an opportunity for legal review of all terms of this Severance Agreement. The parties agree that in interpreting any issues which may arise, any rules of construction related to who prepared the Severance Agreement shall be inapplicable, each party having contributed or having had the opportunity to contribute to clarify any issue.

18.Severability; Entire Agreement. Each provision of this Severance Agreement is severable from every other provision of this Severance Agreement. Any provision of this Severance Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision hereof or the invalid or unenforceable provision in any other situation or in any other jurisdiction. Any provision of this Severance Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. Employee acknowledges that this Severance Agreement, together with any agreements specifically referenced herein, contains the entire agreement of the parties with respect to the subject matter hereof. Any agreement between the parties purporting to amend a term or condition of this Severance Agreement shall be in writing and shall specifically identify the paragraph number of the term or condition to be changed, as well as state the parties’ specific intent to amend that term or condition.

Please return this signed Severance Agreement by , otherwise, this Severance Agreement shall expire and Employee will forfeit any and all right to the considerations described above.

IN WITNESS WHEREOF, each of the parties to this Severance Agreement has freely and knowingly executed this Severance Agreement.

EMPLOYEE

CHANNELADVISOR CORPORATION

By:

Name:

Date:

Its:

Forwarding Address:

Applicable only if over 40

CONSIDERATION PERIOD

I, , understand that I have the right to take at least 21 days to consider whether to sign this Severance Agreement, which I received on , 20[__]. If I elect to sign this Severance Agreement before 21 days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the 21 day consideration period.

Agreed:

Employee Signature

Date

Exhibit A

Employee Vested Equity Incentive Awards

Document

AMENDED AND RESTATED EXECUTIVE SEVERANCE AND CHANGE IN CONTROL LETTER AGREEMENT

Dear Rich:

This Amended and Restated Executive Severance and Change in Control Letter Agreement (the “Agreement”) is made and entered into effective as of June 14, 2022 by and between ChannelAdvisor Corporation (“ChannelAdvisor”) and Richard Cornetta (“You”) to set forth certain obligations if Your employment with ChannelAdvisor is terminated under different scenarios. This Agreement amends and restates in its entirety the Executive Severance and Change of Control Letter Agreement between You and ChannelAdvisor dated November 5, 2015, as amended December 31, 2018, and is effective as of the date above.

1.Definitions

“Resignation” shall mean Your resignation of employment from ChannelAdvisor in circumstances other than Good Reason.

“Termination Date” shall mean the date Your employment at ChannelAdvisor ends.

2.Compensation and Benefits Upon Termination

(A)By ChannelAdvisor For Cause or by You Upon Resignation

(B)By ChannelAdvisor other than for Cause or by You for Good Reason

If ChannelAdvisor terminates Your employment, other than For Cause, or You terminate Your employment for Good Reason, and provided that such termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a “Separation From Service”), You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of a waiver and release in substantial conformity with the form attached hereto as Attachment 1 (“Severance Agreement”):

(1)ChannelAdvisor shall pay to You a payment equal to twelve (12) months of Your base compensation (“Base Compensation”).

In addition, ChannelAdvisor shall pay to You either:

Payment of the amounts in this Section 2(B)(l) shall be made in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date.

doubt, any performance stock units (“PSUs”) that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable award agreements (the “Performance-Based Award Agreements”).

(4)ChannelAdvisor shall extend the exercise period for the Awards until two (2) years from the Termination Date, but in no event will the exercise period extend beyond the original term of the Award.

(C)Termination in Connection with Change in Control Event

If there is a Change in Control, and if, within the period during the two (2) months before or the twenty-four (24) months after the Change in Control, ChannelAdvisor (or the acquiring entity) (i) terminates Your employment, other than For Cause, or (ii) You terminate Your employment for Good Reason, in each case provided that the termination of employment constitutes a Separation From Service, You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of the Severance Agreement, on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date, ChannelAdvisor shall provide You (1) the benefits in Sections 2(B)(l), (2) and (4) above, (2) full acceleration of vesting of all Your time-vesting Awards that are unvested as of the Termination Date, with the effect that all such Awards shall be fully vested and exercisable as of the Termination Date, and (3) Your outstanding performance-vesting Awards (including, for the avoidance of doubt, any PSUs that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable Performance-Based Award Agreements.

3.Section 280G

(B)To the extent such Covered Payments are required to be reduced, any such reduction shall be made by in accordance with Section 409A of the Code and the following:

(1)the Covered Payments which do not constitute nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first;

(2)all other Covered Payments shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date; and

(3)in the event that accelerated vesting of Awards is to be reduced, such acceleration will be cancelled in the reverse order of the dates on which the Awards were granted.

(C)You shall provide ChannelAdvisor with such information and documents as ChannelAdvisor may reasonably request in order to make a determination under this Section 3.

4.Compliance with Section 409A of the Code

5.Special Terms and Conditions of Employment

You acknowledge and agree that You remain subject to the ChannelAdvisor Corporation Special Terms and Conditions of Employment between You and ChannelAdvisor dated September 23, 2013, as may be amended from time to time (the “Special Terms”). Notwithstanding anything therein to the contrary, in the event that Your employment terminates under the circumstances set forth in either Section 2(B) or 2(C) hereof, the term of the restrictions set forth in Section 12(f) of the Special Terms will be twelve (12) months following the termination of Your employment.

6.General

Sincerely,

CHANNELADVISOR CORPORATION

David J. Spitz

Chief Executive Officer


Accepted and signed to by:


Richard Cornetta

Attachment 1 to the Agreement

SEVERANCE AGREEMENT

This Severance Agreement (“Severance Agreement”), containing a release and waiver among other terms, is made as of the ____________ day of ________________________, by and between Richard Cornetta (“Employee”) and ChannelAdvisor Corporation, for the benefit of its employees, officers, directors, successors and assigns (collectively and individually, “ChannelAdvisor”).

1. Separation. Employee’s last day of work with ChannelAdvisor and Employee’s employment termination date will be ____________ (the “Separation Date”).

2. Payment to Employee.

(a) Accrued Compensation. Employee agrees that, upon payment by ChannelAdvisor of Employee’s earned salary and variable compensation, if any, payable pursuant to the applicable variable compensation plan through the Separation Date (collectively, “Compensation”), Employee has received from ChannelAdvisor all compensation due to Employee. Employee further agrees that Employee will be paid for all accrued and unused vacation time due to Employee in accordance with ChannelAdvisor policies. The ChannelAdvisor vacation policy is that upon termination, eligible employees are paid for accrued but unused vacation, up to a maximum of 40 hours. Employee will receive these Compensation and vacation payments on the first regular pay date following the Separation Date in accordance with ChannelAdvisor’s normal pay cycle, regardless of whether or not Employee signs this Severance Agreement

(b) Expense Reimbursements. If Employee has been issued any ChannelAdvisor credit or calling cards, ChannelAdvisor will cancel these card(s) effective as of the Separation Date. Employee agrees that, on the Separation Date, Employee will submit Employee’s final documented expense reimbursement statement reflecting all business expenses Employee incurred through the Separation Date, if any, for which Employee seeks reimbursement. ChannelAdvisor will reimburse Employee for reasonable business expenses pursuant to ChannelAdvisor’s regular business practice. Employee will receive these payments regardless of whether or not Employee signs this Severance Agreement

(c) Severance Payment and Benefits. In accordance with and subject to the terms of that certain Amended and Restated Executive Severance and Change in Control Letter Agreement between Employee and ChannelAdvisor dated [___], 2022 (as may be amended from time to time, the “Agreement”) in particular, the requirement that this Severance Agreement becomes effective by the twenty-ninth (29th) day following the Separation Date as provided in Paragraph 11 of this Severance Agreement, ChannelAdvisor will:

(1) pay Employee an amount equal to $____________ pursuant to Section 2(B)(l) of the Agreement, which total amount shall be paid in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Separation Date, and,

(2) if Employee timely and properly elects COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor will pay the monthly premium for the coverage directly to the insurance provider for a period of up to 12 months. If Employee receives subsequent employment that includes one or both of these benefits, then upon the·first date Employee is eligible to receive the benefits, Employee shall promptly notify ChannelAdvisor in writing. Upon receipt of Employee’s notice, ChannelAdvisor shall cease payment for any benefits that are being provided by Employee’s new employer. If Employee delays in notifying ChannelAdvisor of the change in benefits status, Employee shall promptly return all overpayments.

(d) Withholding. Employee agrees that all payments made pursuant to this Paragraph are compensation income and that ChannelAdvisor will make these payments net of applicable withholding and other employment related taxes, with withholding on payments under Paragraph 2(c) shall be made at the lower of Employee’s normal withholding rate or the statutory rate for supplemental wages.

(e) No Other Payments Related to Employment. Employee agrees that upon payment of the amounts specified in Paragraphs 2(a), (b) and (c) no further amounts (including without limitation base salary, bonus, incentive or variable compensation, equity, severance or benefits) are due to Employee from ChannelAdvisor for any cause or reason with respect to, related to, or arising from Employee’s employment with ChannelAdvisor after the Separation Date except as otherwise set forth in this Severance Agreement.

(f) Awards. Exhibit A states the number of Awards (as defined in the Agreement) held by Employee to receive shares of ChannelAdvisor stock under a ChannelAdvisor equity incentive plan and vested as of the Separation Date, after giving effect to any applicable acceleration provisions in the Agreement relating to the Awards. Upon expiration of an Award, Employee shall have no further rights under the Award.

3. Worker’s Compensation, 401(k) Plan and other Benefits. Employee understands that this Severance Agreement does not affect any rights Employee may have with respect to any applicable worker’s compensation claims, but represents that as of the execution of this Severance Agreement Employee has no injuries or physical or mental limitations, restrictions or impairments that preclude Employee from working in any way and has not suffered any on-the job injury for which Employee has not already filed a claim. Employee understands that Employee’s right to participate in all ChannelAdvisor employee benefit plans terminates on the Separation Date, except for continuation of medical and dental coverage as provided herein. Any benefits accrued and vested as of the Separation Date and which, by their express terms, survive any termination of employment, shall survive in accordance with their respective terms. Following the Separation Date, the ChannelAdvisor 401(k) Plan administrator will provide Employee with information regarding the distribution and/or rollover of any 401(k) funds.

4. Ongoing Obligations. Employee acknowledges that all obligations under the applicable ChannelAdvisor Corporation Special Terms and Conditions of Employment by and between ChannelAdvisor and Employee, dated September 23, 2013 (as may be amended from time to time, the “Special Terms”), shall continue and shall remain in full force and effect following Employee’s termination in accordance with the terms and conditions of the Special Terms. In particular, Employee understands that all obligations concerning non-disclosure and non-use of confidential information, ownership of confidential information and work product, assistance after employment and non-competition shall continue in accordance with the terms and conditions of the Special Terms. Employee acknowledges that Employee will abide by the terms set forth in the Special Terms, including without limitation the terms regarding noncompetition, non-disclosure and non-use of confidential information.

5. Pre-Employment Excluded Work Product. If Employee listed certain excluded pre-employment work product or creation (collectively, “Excluded Work Product”) from ChannelAdvisor Ownership in Employee’s Special Terms, Employee represents and warrants that no Excluded Work Product, as defined in the Special Terms, was ever included in any product, process, methodology, service, or machine that Employee worked on or worked in conjunction with while employed with ChannelAdvisor. Without limiting the preceding, if in the course of Employee’s employment with ChannelAdvisor, Employee incorporated, whether intentional or incidental, Excluded Work Product into a ChannelAdvisor product, process, methodology, service, or machine, ChannelAdvisor is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, fully-paid, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, make (and own) derivative works of, publicly perform, use, sell, import, and exercise any and all present and future rights in such Excluded Work Product

6. Return of Property. By the Separation Date, Employee shall return to ChannelAdvisor all property of ChannelAdvisor, whether tangible or intangible, in Employee’s possession or control, including without limitation, the ChannelAdvisor laptop computer Employee has been using, electronic storage devices, and any other equipment provided by ChannelAdvisor (without deletion of any information stored thereon), company credit cards and calling cards, ChannelAdvisor office keys, and any documents, books, rolodexes (in paper or electronic form), or other information, and all copies thereof. Please coordinate return of ChannelAdvisor property with [____________]. Employee represents that as of the Separation Date, Employee does not have any other ChannelAdvisor equipment, materials, resources or confidential information in Employee’s possession or under Employee’s control. Receipt of the payments and benefits described in this Severance Agreement is expressly conditioned upon return of all ChannelAdvisor property.

7. Confidentiality. The provisions of this Severance Agreement will be held in strictest confidence by Employee and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) Employee may disclose this Severance Agreement to Employee’s immediate family; (b) Employee may disclose this Severance Agreement in confidence to Employee’s attorney, accountant, auditor, tax preparer, and financial advisor; and (c) Employee may disclose this Severance Agreement to the extent required by law, a governmental investigatory agency or legal process.

8. Nondisparagement. Employee agrees not to disparage ChannelAdvisor or ChannelAdvisor’s attorneys, directors, managers, partners, employees, agents and affiliates, in any manner likely to be harmful to them or their business, business reputation or personal reputation; provided that Employee may respond accurately and fully to any question, inquiry or request for information by a governmental investigatory agency or when required by legal process. ChannelAdvisor and its directors, officers and employees agree not to disparage Employee in any manner likely to be harmful to the goodwill and good reputation of Employee, provided that ChannelAdvisor may respond accurately and fully to any question, inquiry, or request for information when required by a governmental investigatory agency or legal process.

9. Inquiries. In consideration of the payments and benefits provided to Employee by this Severance Agreement, Employee agrees to answer from time to time, inquiries from ChannelAdvisor related to work undertaken by Employee during Employee’s employment with ChannelAdvisor.

10. Waiver and Release.

(a) In consideration of the payments and benefits made pursuant to this Severance Agreement the sufficiency of which is hereby acknowledged, Employee hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, fully releases and discharges ChannelAdvisor (and its officers, directors, employees, agents and representatives) of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff, demands or liability whatsoever of every name and nature, both at law and in equity including, by way of example and not limitation, rights and claims arising under [[Applicable only if over 40] the Age Discrimination in Employment Act (the “ADEA”) of 1967, as amended, the Older Worker Benefit Protection Act, ] Title VII of the Civil Rights Act of 1964, as amended, Sections 1981 - 1983 of Title 42 of the United States Code, the Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, and any other applicable state and federal employment discrimination laws, breach of contract (including without limitation breach of contract to provide Employee with additional stock in ChannelAdvisor), unpaid expenses or benefits, wrongful discharge, interference with contract, breach of any ChannelAdvisor policy, practice or procedure, negligence, the Employee Income Retirement Security Act of 1974, as amended, loss of consortium, loss of fringe benefits, fraud, misrepresentation, defamation and/or all other claims of tortious conduct which Employee or Employee’s successors in interest or assigns now have, ever have had, or can, shall or may have, as of the date hereof, whether known or unknown, suspected or unsuspected, against ChannelAdvisor arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date Employee executes this Severance Agreement; provided however that this waiver and release does not cover any claim Employee may have for breach of the terms of this Severance Agreement by ChannelAdvisor and does not affect Employee’s right and ability to enforce the terms of this Severance Agreement. Employee represents that Employee has no lawsuits, claims or actions pending in Employee’s name, or on behalf of any other person or entity, against ChannelAdvisor or any other person or entity subject to the release granted in this Paragraph. Notwithstanding the foregoing, Employee is not releasing ChannelAdvisor from any claims that cannot be waived by law, Employee is not releasing ChannelAdvisor from any obligation undertaken in any preexisting obligation to indemnify Employee pursuant to ChannelAdvisor articles and bylaws or applicable law, and Employee is not waiving Employee’s right to make any claim, charge or complaint with any governmental agency or participate in an investigation by any such agency. Employee is waiving, however, Employee’s right to any monetary or other relief if any governmental agency or entity, including without limitation the U.S. Equal Employment Opportunity Commission or the federal or a state department of labor, pursues any claims on Employee’s behalf.

(b) In consideration of the execution of this Severance Agreement by Employee, ChannelAdvisor hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, releases and discharges Employee of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff; demands or liability whatsoever of every name and nature, both at Law and in Equity which ChannelAdvisor or its successors in interest or assigns now have, ever have had, or can, shall or may have, whether known or unknown, suspected or unsuspected, against Employee arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date hereof. ChannelAdvisor represents that ChannelAdvisor has no lawsuits, claims or actions pending in ChannelAdvisor’s name, or on behalf of any person or entity, against the Employee or any other person or entity subject to the release granted in this Paragraph. ChannelAdvisor warrants and covenants it shall maintain for at least six (6) years following Employee’s Termination Date, liability insurance coverage (Director’s and Officer’s liability insurance coverage or tail coverage), sufficient to cover (but no less than $3 million dollars) Employee’s actions as a director and/or officer of ChannelAdvisor with respect to matters arising prior to or as of Employee’s Termination Date.

11. ADEA Waiver. [Applicable only if over 40] Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA, as amended. Employee also acknowledges that (i) the consideration given to Employee in exchange for the waiver and release in this Severance Agreement is in addition to anything of value to which Employee was already entitled, and (ii) that Employee has been paid for all time worked and has received all the leave, leaves of absence and leave benefits and protections for which Employee is eligible. Employee further acknowledges that Employee has been advised by this writing that: (a) Employee’s waiver and release do not apply to any rights or claims that may arise after the execution date of this Severance Agreement; (b) Employee has been advised hereby that Employee should consult with an attorney prior to executing this Severance Agreement; (c) Employee twenty-one (21) days to consider this Severance Agreement (although Employee may choose to voluntarily execute this Severance Agreement earlier and, if Employee does, Employee will sign the Consideration Period waiver below); (d) Employee has seven (7) days following Employee’s execution of this Severance Agreement to revoke the Severance Agreement in writing actually delivered to [_____] at ChannelAdvisor; and (e) this Severance Agreement shall not be effective until the date upon which the revocation period has expired unexercised, which shall be the eighth day after this Severance Agreement is executed by Employee (the “Effective Date”).

12. No Admission. This Severance Agreement does not constitute an admission by ChannelAdvisor of any wrongful action or violation of any federal, state, or local statute, or common law rights, including without limitation those relating to the provisions of any law or statute concerning employment actions, or of any other possible or claimed violation of law or rights.

13. Breach. Employee agrees that upon any breach of this Severance Agreement by Employee, Employee will forfeit all amounts paid or owing to Employee under this Severance Agreement and ChannelAdvisor will be relieved of its obligations hereunder except to the extent that such forfeiture and relief would result in an invalidation of the release set forth above. Further, Employee acknowledges that it may be impossible to assess the damages caused by Employee’s violation of the terms of Paragraphs 4 to 11 of this Severance Agreement and further agrees that any threatened or actual violation or breach of those paragraphs of this Severance Agreement will constitute immediate and irreparable injury to ChannelAdvisor. Employee therefore agrees that any such breach of this Severance Agreement is a material breach of this Severance Agreement, and, in addition to any and all other damages and remedies available to ChannelAdvisor upon Employee’s breach of this Severance Agreement, ChannelAdvisor shall be entitled to an injunction to prevent Employee from violating or breaching this Severance Agreement.

14. Reliance. Employee acknowledges and represents that in executing this Severance Agreement Employee is not relying, and has not relied, upon any representation or statement not expressly stated in this Severance Agreement made by ChannelAdvisor, its agents, employees, representatives, or agents with regard to the subject matter of this Severance Agreement

15. Waiver. No waiver of any right or remedy with respect to any occurrence or event shall be valid unless it is in writing and executed by the waiving party, and further no such valid waiver shall be deemed a waiver of such right or remedy with respect to such occurrence or event in the future, and shall not excuse a subsequent breach of the same term.

16. Successors and Assigns. This Severance Agreement is binding upon the parties hereto, and their respective heirs, successors and assigns.

17. Legal Review. Both parties have had an opportunity for legal review of all terms of this Severance Agreement. The parties agree that in interpreting any issues which may arise, any rules of construction related to who prepared the Severance Agreement shall be inapplicable, each party having contributed or having had the opportunity to contribute to clarify any issue.

18. Severability; Entire Agreement. Each provision of this Severance Agreement is severable from every other provision of this Severance Agreement. Any provision of this Severance Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision hereof or the invalid or unenforceable provision in any other situation or in any other jurisdiction. Any provision of this Severance Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. Employee acknowledges that this Severance Agreement, together with any agreements specifically referenced herein, contains the entire agreement of the parties with respect to the subject matter hereof. Any agreement between the parties purporting to amend a term or condition of this Severance Agreement shall be in writing and shall specifically identify the paragraph number of the term or condition to be changed, as well as state the parties’ specific intent to amend that term or condition.

Please return this signed Severance Agreement by [_____] otherwise, this Severance Agreement shall expire and Employee will forfeit any and all right to the considerations described above.

IN WITNESS WHEREOF, each of the parties to this Severance Agreement has freely and knowingly executed this Severance Agreement.

Employee

ChannelAdvisor Corporation

By:

Name:

Date:

Its:

Forwarding Address:

Applicable only if over 40

CONSIDERATION PERIOD

I, _______________, understand that I have the right to take at least 21 days to consider whether to sign this Severance Agreement, which I received on ______________, 20[__]. If I elect to sign this Severance Agreement before 21 days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the 21 day consideration period.

Agreed:

Employee Signature

Date

Exhibit A

Employee Vested Equity Incentive Awards

Document

SECOND AMENDED AND RESTATED EXECUTIVE SEVERANCE AND CHANGE IN CONTROL LETTER AGREEMENT

Dear Beth:

This Second Amended and Restated Executive Severance and Change in Control Letter Agreement (the “Agreement”) is made and entered into effective as of June 14, 2022 by and between ChannelAdvisor Corporation (“ChannelAdvisor”) and Elizabeth Segovia (“You”) to set forth certain obligations if Your employment with ChannelAdvisor is terminated under different scenarios. This Agreement amends and restates in its entirety the Amended and Restated Executive Change in Control Letter Agreement between You and ChannelAdvisor dated August 8, 2019, and is effective as of the date above.

1.Definitions

“Change in Control” shall have the meaning stated in the ChannelAdvisor Corporation 2013 Equity Incentive Plan, as amended from time to time. If required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” ChannelAdvisor or “a change in the ownership of a substantial portion of the assets of” ChannelAdvisor as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). ChannelAdvisor may, in its sole discretion and without Your consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.

“Resignation” shall mean Your resignation of employment from ChannelAdvisor in circumstances other than Good Reason.

“Termination Date” shall mean the date Your employment at ChannelAdvisor ends.

2.Compensation and Benefits Upon Termination

(A)By ChannelAdvisor For Cause or by You Upon Resignation

(B)By ChannelAdvisor other than for Cause or by You for Good Reason

If ChannelAdvisor terminates Your employment, other than For Cause, or You terminate Your employment for Good Reason, and provided that such termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a “Separation From Service”), You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of a waiver and release in substantial conformity with the form attached hereto as Attachment 1 (“Severance Agreement”):

(1)ChannelAdvisor shall pay to You a payment equal to twelve (12) months of Your base compensation (“Base Compensation”).

In addition, ChannelAdvisor shall pay to You either:

Payment of the amounts in this Section 2(B)(1) shall be made in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date.

(3)ChannelAdvisor shall accelerate vesting of all of the time-vesting Awards that are unvested as of the Termination Date by one quarter of a year (3 months), and any outstanding performance-vesting Awards (including, for the avoidance of doubt, any performance stock units (“PSUs”) that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable award agreements (the “Performance-Based Award Agreements”).

(4)ChannelAdvisor shall extend the exercise period for the Awards until two (2) years from the Termination Date, but in no event will the exercise period extend beyond the original term of the Award.

(C)Termination in Connection with Change in Control Event

If there is a Change in Control, and if, within the period during the two (2) months before or the twenty-four (24) months after the Change in Control, ChannelAdvisor (or the acquiring entity) (i) terminates Your employment, other than For Cause, or (ii) You terminate Your employment for Good Reason, and provided that in each case such termination of employment constitutes a Separation From Service, You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of the Severance Agreement, on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date, ChannelAdvisor shall provide You (1) the benefits in Sections 2(B)(1), (2) and (4) above, (2) full acceleration of vesting of all Your time-vesting Awards that are unvested as of the Termination Date, with the effect that all such Awards shall be fully vested and exercisable as of the Termination Date, and (3) Your outstanding performance-vesting Awards (including, for the avoidance of doubt, any PSUs that have been earned based on performance, but which remain subject to time-based vesting) will be entitled to accelerated vesting as of the Termination Date, as set forth in the applicable Performance-Based Award Agreements.

3.Section 280G

(B)To the extent such Covered Payments are required to be reduced, any such reduction shall be made by in accordance with Section 409A of the Code and the following:

(i)the Covered Payments which do not constitute nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first;

(iii)in the event that accelerated vesting of Awards is to be reduced, such acceleration will be cancelled in the reverse order of the dates on which the Awards were granted.

(C)You shall provide ChannelAdvisor with such information and documents as ChannelAdvisor may reasonably request in order to make a determination under this Section 3.

4.Compliance with Section 409A of the Code

5.Special Terms and Conditions of Employment

You acknowledge and agree that You remain subject to that certain ChannelAdvisor Corporation Special Terms and Conditions of Employment between You and ChannelAdvisor dated October 13, 2017, as may be amended from time to time (the “Special Terms”).

6.General

ChannelAdvisor shall take any required corporate actions needed as of the Termination Date to ensure the acceleration of the Awards and extension of the exercise period as described in this Agreement. This Agreement constitutes the entire agreement between the parties with respect to termination of Your employment with ChannelAdvisor except for the Special Terms and the Performance-Based Award Agreements. If there is a conflict between the terms of this and any other agreement between You and ChannelAdvisor, this Agreement shall control. Any amendments to this Agreement and any material changes to Attachment 1 hereto must be in writing and executed by both parties. This Agreement may be entered into by each party in separate counterparts and shall constitute one fully executed Agreement upon execution by both You and ChannelAdvisor. This Agreement shall be construed in accordance with the laws of the State of North Carolina, without regard to conflict of laws principles. If the parties enter into legal proceedings in dispute of any of the terms of this Agreement, the losing party shall pay all reasonable legal fees of the prevailing party. This Agreement is binding upon ChannelAdvisor’s successors (whether by merger, sale of stock, or sale of all or substantially all its assets) and assigns.

Sincerely,

CHANNELADVISOR CORPORATION

David J. Spitz

Chief Executive Officer


Accepted and agreed to by:


Elizabeth Segovia

Attachment 1 to the Agreement

SEVERANCE AGREEMENT

This Severance Agreement (“Severance Agreement”), containing a release and waiver among other terms, is made as of the _______ day of _________________________, by and between Elizabeth Segovia (“Employee”) and ChannelAdvisor Corporation, for the benefit of its employees, officers, directors, successors and assigns (collectively and individually, “ChannelAdvisor”).

1.Separation. Employee’s last day of work with ChannelAdvisor and Employee’s employment termination date will be __________________ (the “Separation Date”).

2.Payment to Employee.

(c)Severance Payment and Benefits. In accordance with and subject to the terms of that certain Second Amended and Restated Executive Severance and Change in Control Letter Agreement between Employee and ChannelAdvisor dated [___], 2022 (as may be amended from time to time, the “Agreement”) in particular, the requirement that this Severance Agreement becomes effective by the twenty-ninth (29th) day following the Separation Date as provided in Paragraph 11 of this Severance Agreement, ChannelAdvisor will:

(1)pay Employee an amount equal to $_________ pursuant to Section 2(B)(1) of the Agreement, which total amount shall be paid in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Separation Date, and,

(d)Withholding. Employee agrees that all payments made pursuant to this Paragraph are compensation income and that ChannelAdvisor will make these payments net of applicable withholding and other employment related taxes, with withholding on payments under Paragraph 2(c) shall be made at the lower of Employee’s normal withholding rate or the statutory rate for supplemental wages.

4.Ongoing Obligations. Employee acknowledges that all obligations under the applicable ChannelAdvisor Corporation Special Terms and Conditions of Employment by and between ChannelAdvisor and Employee, dated October 13, 2017 (as amended from time to time, the “Special Terms”), shall continue and shall remain in full force and effect following Employee’s termination in accordance with the terms and conditions of the Special Terms. In particular, Employee understands that all obligations concerning non-disclosure and non-use of confidential information, ownership of confidential information and work product, assistance after employment and non-competition shall continue in accordance with the terms and conditions of the Special Terms. Employee acknowledges that Employee will abide by the terms set forth in the Special Terms, including without limitation the terms regarding noncompetition, non-disclosure and non-use of confidential information.

6.Return of Property. By the Separation Date, Employee shall return to ChannelAdvisor all property of ChannelAdvisor, whether tangible or intangible, in Employee’s possession or control, including without limitation, the ChannelAdvisor laptop computer Employee has been using, electronic storage devices, and any other equipment provided by ChannelAdvisor (without deletion of any information stored thereon), company credit cards and calling cards, ChannelAdvisor office keys, and any documents, books, rolodexes (in paper or electronic form), or other information, and all copies thereof. Please coordinate return of ChannelAdvisor property with [________]. Employee represents that as of the Separation Date, Employee does not have any other ChannelAdvisor equipment, materials, resources or confidential information in Employee’s possession or under Employee’s control. Receipt of the payments and benefits described in this Severance Agreement is expressly conditioned upon return of all ChannelAdvisor property.

10.Waiver and Release.

(d)In consideration of the payments and benefits made pursuant to this Severance Agreement the sufficiency of which is hereby acknowledged, Employee hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, fully releases and discharges ChannelAdvisor (and its officers, directors, employees, agents and representatives) of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff, demands or liability whatsoever of every name and nature, both at law and in equity including, by way of example and not limitation, rights and claims arising under [[Applicable only if over 40] the Age Discrimination in Employment Act (the “ADEA”) of 1967, as amended, the Older Worker Benefit Protection Act, ] Title VII of the Civil Rights Act of 1964, as amended, Sections 1981 - 1983 of Title 42 of the United States Code, the Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, and any other applicable state and federal employment discrimination laws, breach of contract (including without limitation breach of contract to provide Employee with additional stock in ChannelAdvisor), unpaid expenses or benefits, wrongful discharge, interference with contract, breach of any ChannelAdvisor policy, practice or procedure, negligence, the Employee Income Retirement Security Act of 1974, as amended, loss of consortium, loss of fringe benefits, fraud, misrepresentation, defamation and/or all other claims of tortious conduct which Employee or Employee’s successors in interest or assigns now have, ever have had, or can, shall or may have, as of the date hereof, whether known or unknown, suspected or unsuspected, against ChannelAdvisor arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date Employee executes this Severance Agreement; provided however that this waiver and release does not cover any claim Employee may have for breach of the terms of this Severance Agreement by ChannelAdvisor and does not affect Employee’s right and ability to enforce the terms of this Severance Agreement. Employee represents that Employee has no lawsuits, claims or actions pending in Employee’s name, or on behalf of any other person or entity, against ChannelAdvisor or any other person or entity subject to the release granted in this Paragraph. Notwithstanding the foregoing, Employee is not releasing ChannelAdvisor from any claims that cannot be waived by law, Employee is not releasing ChannelAdvisor from any obligation undertaken in any preexisting obligation to indemnify Employee pursuant to ChannelAdvisor articles and bylaws or applicable law, and Employee is not waiving Employee’s right to make any claim, charge or complaint with any governmental agency or participate in an investigation by any such agency. Employee is waiving, however, Employee’s right to any monetary or other relief if any governmental agency or entity, including without limitation the U.S. Equal Employment Opportunity Commission or the federal or a state department of labor, pursues any claims on Employee’s behalf.

11.ADEA Waiver. [Applicable only if over 40] Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA, as amended. Employee also acknowledges that (i) the consideration given to Employee in exchange for the waiver and release in this Severance Agreement is in addition to anything of value to which Employee was already entitled, and (ii) that Employee has been paid for all time worked and has received all the leave, leaves of absence and leave benefits and protections for which Employee is eligible. Employee further acknowledges that Employee has been advised by this writing that: (a) Employee’s waiver and release do not apply to any rights or claims that may arise after the execution date of this Severance Agreement; (b) Employee has been advised hereby that Employee should consult with an attorney prior to executing this Severance Agreement; (c) Employee twenty-one (21) days to consider this Severance Agreement (although Employee may choose to voluntarily execute this Severance Agreement earlier and, if Employee does, Employee will sign the Consideration Period waiver below); (d) Employee has seven (7) days following Employee’s execution of this Severance Agreement to revoke the Severance Agreement in writing actually delivered to [______] at ChannelAdvisor; and (e) this Severance Agreement shall not be effective until the date upon which the revocation period has expired unexercised, which shall be the eighth day after this Severance Agreement is executed by Employee (the “Effective Date”).

ChannelAdvisor upon Employee’s breach of this Severance Agreement, ChannelAdvisor shall be entitled to an injunction to prevent Employee from violating or breaching this Severance Agreement.

16.Successors and Assigns. This Severance Agreement is binding upon the parties hereto, and their respective heirs, successors and assigns.

Please return this signed Severance Agreement by ________________, otherwise, this Severance Agreement shall expire and Employee will forfeit any and all right to the considerations described above.

IN WITNESS WHEREOF, each of the parties to this Severance Agreement has freely and knowingly executed this Severance Agreement.

Employee

ChannelAdvisor Corporation

By:

Name:

Date:

Its:

Forwarding Address:

Applicable only if over 40

CONSIDERATION PERIOD

I, _______________________, understand that I have the right to take at least 21 days to consider whether to sign this Severance Agreement, which I received on _________________, 20[__]. If I elect to sign this Severance Agreement before 21 days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the 21 day consideration period.

Agreed:

Employee Signature

Date

Exhibit A

Employee Vested Equity Incentive Awards

Document

AMENDMENT TO PERFORMANCE STOCK UNIT AWARD AGREEMENTS

Dear [Name]:

This Amendment to Performance Stock Unit Award Agreements (the “Amendment”) is made and entered into effective as of June 14, 2022 (the “Amendment Effective Date”) by and between ChannelAdvisor Corporation (“ChannelAdvisor”) and [Name] (“You”). This Amendment amends the Performance Stock Unit Agreement between You and ChannelAdvisor dated March 1, 2021 and the Performance Stock Unit Agreement between You and ChannelAdvisor dated March 1, 2022 (each a “PSU Award Agreement” and together, the “PSU Award Agreements”) effective as of the Amendment Effective Date. Except as expressly provided in this Amendment, the PSU Award Agreements, each as amended by this Amendment, remain in full force and effect. All capitalized terms not defined in this Amendment have the meanings given to such terms in the applicable PSU Award Agreement.

I.Section 2(c) of each PSU Award Agreement is hereby replaced in its entirety with the following:

(c)(1) To the extent that any written employment or severance arrangement entered into between you and the Company provides for vesting acceleration of a stock-based award upon one of the events described in Sections 2(c)(i)–(iii) below, or (2) in the event of a Change in Control in which the successor company or an affiliate thereof does not assume, substitute or otherwise replace this Award (a “Non-Assumption,” and together with a vesting acceleration event described in 2(c)(1), a “Vesting Acceleration Event”), then this Award shall vest on an accelerated basis as follows:

(i)in the event your Continuous Service is terminated in connection with a Change in Control or another Vesting Acceleration Event that is conditioned on a Change in Control (including, for the avoidance of any uncertainty, a Non-Assumption) occurs prior to the end of the Performance Period, then such acceleration of vesting will be with respect to the greater of (1) the Target PSUs or (2) the actual number of PSUs determined eligible to vest as of the date of the Vesting Acceleration Event (to the extent the Performance Goal attainment level is determinable at such time), with any adjustments and modifications to the components comprising the Performance Goals and/or to the determination of the attainment of actual performance deemed appropriate by the Committee, in its sole discretion, in light of the truncated Performance Period;

(ii)if your Continuous Service is terminated in connection with a Change in Control or another Vesting Acceleration Event that is conditioned on a Change in Control (including, for the avoidance of any uncertainty, a Non-Assumption) occurs at or after the end of the Performance Period, then such acceleration of vesting will be with respect to the actual number of PSUs determined eligible to vest; or

(iii)if your Continuous Service is terminated (not in connection with a Change in Control) or if the relevant employment or severance agreement provides for vesting acceleration of a stock-based award in circumstances not described in Section 2(c)(i)–(ii), then such acceleration of vesting will be with respect to the Target PSUs if the applicable Vesting Acceleration Event occurs prior to the end of the Performance Period, and with respect to the actual number of PSUs determined eligible to vest if the applicable Vesting Acceleration Event occurs at or after the end of the Performance Period.

For purposes of Section 6 of this Award Agreement, “Vesting Acceleration Date” means the date of the Vesting Acceleration Event. This Award shall be considered assumed, substituted for, or replaced if following the Change in Control the Award confers the right to receive, for each share of Common Stock subject to the Award immediately prior to the Change in Control, the consideration (whether shares, cash or other securities or property) received in the transaction constituting a Change in Control by holders of shares of Common Stock for each share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the vesting of the shares of Common Stock for each share subject thereto will be solely common stock of the successor company substantially equal in fair market value to the per share consideration received by holders of shares of Common Stock in the transaction constituting a Change in Control.

II.Section 6(b) of each PSU Award Agreement is hereby replaced in its entirety with the following:

(b)Subject to the satisfaction of the withholding obligations for any Tax-Related Items (as defined in Section 10 of this Award Agreement), in the event one or more PSUs vests, the Company will issue to you, on or as soon as practicable after the applicable Vesting Date or Vesting Acceleration Date (but in any event (i) within the earlier of 60 days of a Vesting Date or December 31 of the calendar year in which the Vesting Date occurs and (ii) no later than the 15th day of the third calendar month of the year following the year containing the Vesting Acceleration Date), and in either (i) or (ii), except as otherwise provided herein, one share of Common Stock for each PSU that is eligible to vest as set forth in the Grant Notice and Section 2(a) of this Award Agreement and such issuance date is referred to as the “Original Issuance Date.” If the Original Issuance Date falls on a date that is not a business day, delivery will instead occur on the next following business day.

Sincerely,

CHANNELADVISOR CORPORATION

/s/ David J. Spitz

David J. Spitz

Chief Executive Officer


Accepted and signed by:



[Name]

Document

Exhibit 31.1

CERTIFICATION

I, David J. Spitz, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of ChannelAdvisor Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 9, 2022	By:	/s/ David J. Spitz
			David J. Spitz
			Chief Executive Officer
			(principal executive officer)

Document

Exhibit 31.2

CERTIFICATION

I, Richard F. Cornetta, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of ChannelAdvisor Corporation;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 9, 2022	By:	/s/ Richard F. Cornetta
			Richard F. Cornetta
			Chief Financial Officer
			(principal financial officer)

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ChannelAdvisor Corporation (the "Company”) for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers hereby certifies, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the end of the period covered by the Report and results of operations of the Company for the period covered by the Report.


/s/ David J. Spitz						/s/ Richard F. Cornetta
David J. Spitz						Richard F. Cornetta
Chief Executive Officer						Chief Financial Officer
August 9, 2022						August 9, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, is not being “filed” by the Company as part of the Report or as a separate disclosure document and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

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