ecom-20220331

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 March 31, 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 April 29, 2022 was 30,475,830.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of March 31 , 202 2 (unaudited) and December 31, 20 21			2

Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31 , 202 2 and 20 21			3

Unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31 , 202 2 and 20 21			4

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 2 and 20 21			5

Notes to Unaudited Condensed Consolidated Financial Statements			6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			12

Item 3. Quantitative and Qualitative Disclosures About Market Risk			26

Item 4. Controls and Procedures			26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			27

Item 1A. Risk Factors			27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			27

Item 3. Defaults Upon Senior Securities			27

Item 4. Mine Safety Disclosures			27

Item 5. Other Information			27

Item 6. Exhibits			28

Signatures			29

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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)


	March 31, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	106,906	$	100,567
Accounts receivable, net of allowance of $318 and $279 as of March 31, 2022 and December 31, 2021, respectively	26,951		28,886
Prepaid expenses and other current assets	14,745		15,497
Total current assets	148,602		144,950
Operating lease right of use assets	1,923		2,856
Property and equipment, net	8,168		7,682
Goodwill	29,762		30,042
Intangible assets, net	2,875		3,079
Deferred contract costs, net of current portion	18,562		17,951
Long-term deferred tax assets, net	31,460		32,616
Other assets	705		796
Total assets	$	242,057	$	239,972
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	746	$	1,457
Accrued expenses	12,761		12,644
Deferred revenue	31,395		29,942
Other current liabilities	3,634		4,831
Total current liabilities	48,536		48,874
Long-term operating leases, net of current portion	832		1,182
Other long-term liabilities	1,407		1,718
Total liabilities	50,775		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 March 31, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 100,000,000 shares authorized, 30,475,830 and 30,188,595 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	30		30
Additional paid-in capital	302,551		300,875
Accumulated other comprehensive loss	(2,653)		(2,237)
Accumulated deficit	(108,646)		(110,470)
Total stockholders' equity	191,282		188,198
Total liabilities and stockholders' equity	$	242,057	$	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 March 31,
	2022		2021
Revenue	$	42,297	$	39,166
Cost of revenue	10,382		8,408
Gross profit	31,915		30,758
Operating expenses:
Sales and marketing	15,946		14,632
Research and development	5,423		5,527
General and administrative	7,222		4,882
Total operating expenses	28,591		25,041
Income from operations	3,324		5,717
Other expense:
Interest expense	28		33
Other expense	35		130
Total other expense	63		163
Income before income taxes	3,261		5,554
Income tax expense	1,437		97
Net income	$	1,824	$	5,457
Net income per share:
Basic	$	0.06	$	0.19
Diluted	$	0.06	$	0.18
Weighted average common shares outstanding:
Basic	30,273,338		29,294,130
Diluted	31,656,555		31,138,533

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 INCOME

(in thousands)


	Three Months Ended March 31,
	2022		2021
Net income	$	1,824	$	5,457
Other comprehensive loss:
Foreign currency translation adjustments	(416)		(150)
Total comprehensive income	$	1,408	$	5,307

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)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Net income	$	1,824	$	5,457
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities:
Depreciation and amortization	1,470		1,832
Bad debt expense (recovery)	85		(4)
Stock-based compensation expense	3,132		3,048
Deferred income taxes	1,106		97
Other items, net	(302)		(1,536)
Changes in assets and liabilities:
Accounts receivable	1,660		(1,060)
Prepaid expenses and other assets	1,032		1,290
Deferred contract costs	(986)		(1,131)
Accounts payable and accrued expenses	(2,457)		(2,203)
Deferred revenue	1,354		2,589
Cash and cash equivalents provided by operating activities	7,918		8,379
Cash flows from investing activities
Purchases of property and equipment	(957)		(225)
Payment of software development costs	(939)		(749)
Cash and cash equivalents used in investing activities	(1,896)		(974)
Cash flows from financing activities
Repayment of finance leases	(4)		(4)
Proceeds from exercise of stock options	362		3,587
Payment of statutory tax withholding related to net-share settlement of restricted stock units	(75)		(66)
Cash and cash equivalents provided by financing activities	283		3,517
Effect of currency exchange rate changes on cash and cash equivalents	34		(83)
Net increase in cash and cash equivalents	6,339		10,839
Cash and cash equivalents, beginning of period	100,567		71,545
Cash and cash equivalents, end of period	$	106,906	$	82,384
Supplemental disclosure of cash flow information
Cash paid for interest	$	32	$	30
Cash paid for income taxes, net	$	12	$	1
Supplemental disclosure of noncash investing and financing activities
Accrued statutory tax withholding related to net-share settlement of restricted stock units	$	1,743	$	1,995
Accrued capital expenditures	$	8	$	2

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 income and cash flows. The results of operations for the three months ended March 31, 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 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 three months ended March 31, 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 three months ended March 31, 2022 and 2021 (in thousands, except number of shares):


	Quarterly Activity For The Three Months Ended March 31, 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


	Quarterly Activity For The Three Months Ended March 31, 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

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 March 31, 2022 and 2021, respectively.

The following table summarizes the changes in the carrying amount of goodwill during the three months ended March 31, 2022 (in thousands):


Balance, December 31, 2021	$	30,042
Effects of foreign currency translation	(280)
Balance, March 31, 2022	$	29,762

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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 $0.9 million and $0.7 million during the three months ended March 31, 2022 and 2021, respectively. Amortization expense related to capitalized internally developed software was $0.8 million and $0.6 million for the three months ended March 31, 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 $4.9 million and $4.8 million at March 31, 2022 and December 31, 2021, respectively.

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 months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		Percentage of Total		2021		Percentage of Total
Brands	$	18,835	45	%	$	14,249	36	%
Retailers	21,246		50	%	21,777		56	%
Other	2,216		5	%	3,140		8	%
	$	42,297			$	39,166

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.

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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 March 31, 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 $42.1 million as of March 31, 2022, of which $25.0 million is expected to be recognized as revenue over the next twelve months.

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 three months ended March 31, 2022 (in thousands):


	Balance, beginning of period		Net additions	Revenue recognized from deferred revenue	Balance, end of period
Deferred revenue	$	30,868	36,654	(35,511)	$	32,011

Of the $42.3 million of revenue recognized in the three months ended March 31, 2022, $18.4 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 March 31, 2022, $9.2 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 three months ended March 31, 2022 (in thousands):


	Balance, beginning of period		Additions	Amortized costs (1)	Balance, end of period
Deferred contract costs	$	26,959	3,482	(2,640)	$	27,801

(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 months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	159	$	232
Sales and marketing	822		820
Research and development	417		612
General and administrative	1,734		1,384
Total stock-based compensation expense	$	3,132	$	3,048

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During the three months ended March 31, 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 March 31,
	2022		2021
Basic:
Net income	$	1,824	$	5,457
Weighted average common shares outstanding, basic	30,273,338		29,294,130
Basic net income per share	$	0.06	$	0.19
Diluted:
Net income	$	1,824	$	5,457
Weighted average common shares outstanding, basic	30,273,338		29,294,130
Dilutive effect of:
Stock options	396,450		631,657
Unvested service-based restricted stock units	848,411		1,212,746
Unvested performance-based restricted stock units	138,356		—
Weighted average common shares outstanding, diluted	31,656,555		31,138,533
Diluted net income per share	$	0.06	$	0.18

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 March 31,
	2022	2021
Stock options	22,830	22,856
Restricted stock units	253,889	84,147

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 44.1% and 1.7% for the three months ended March 31, 2022 and 2021, respectively. The tax expense 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 months ended March 31, 2022 was higher than the U.S. federal statutory rate of 21% primarily due to the generation of foreign operating loss carryforwards which were subject to a valuation allowance. The Company’s effective tax rate for the three months ended March 31, 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 were subject to a valuation

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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 months ended March 31, 2022 was higher than the effective tax rate for the three months ended March 31, 2021 primarily due to the tax benefit recorded from the utilization of U.S. federal and state operating loss carryforwards which were subject to a valuation allowance during the three months ended March 31, 2021. 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 months ended March 31, 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 U.S. and 15 years for research performed outside the U.S., pursuant to Section 174. 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 months ended March 31, 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 three months ended March 31, 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 months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Domestic	$	29,875	$	28,511
International	12,422		10,655
Total revenue	$	42,297	$	39,166

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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 $42.3 million for the three months ended March 31, 2022 increased 8.0% from the comparable prior year period;

•Revenue was comprised of 84.0% subscription revenue and 16.0% variable revenue for the three months ended March 31, 2022 compared with 77.3% subscription revenue and 22.7% variable revenue for the comparable prior year period;

•Revenue from our brands customers represented 44.5% of total revenue for the three months ended March 31, 2022, up from 36.4% of total revenue for the comparable prior year period;

•Revenue derived from customers located outside of the United States as a percentage of total revenue was 29.4% for the three months ended March 31, 2022, compared with 27.2% for the comparable prior year period;

•Gross margin of 75.5% for the three months ended March 31, 2022 declined by 300 basis points compared with 78.5% for the comparable prior year period;

•Operating margin of 7.9% for the three months ended March 31, 2022 declined from 14.6% for the comparable prior year period;

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•Net income was $1.8 million for the three months ended March 31, 2022, compared with $5.5 million for the comparable prior year period;

•Adjusted EBITDA, a non-GAAP measure, was $8.2 million for the three months ended March 31, 2022, compared with $9.2 million for the comparable prior year period;

•Cash and cash equivalents were $106.9 million at March 31, 2022 compared with $100.6 million at December 31, 2021;

•Operating cash flow was $7.9 million for the three months ended March 31, 2022 compared with $8.4 million for the comparable prior year period; and

•Free cash flow, a non-GAAP measure, was $6.0 million for the three months ended March 31, 2022 compared with $7.4 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 macro or geo-political factors beyond our control. For example, during the most recent quarter, 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 Q1 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 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

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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 March 31,				Period-to-Period Change
	2022		2021			Q1 2022 to Q1 2021
(dollars in thousands)
Revenue	$	42,297	$	39,166		$	3,131	8.0	%
Cost of revenue	10,382		8,408			1,974		23.5
Gross profit	31,915		30,758			1,157		3.8
Operating expenses:
Sales and marketing	15,946		14,632			1,314		9.0
Research and development	5,423		5,527			(104)		(1.9)
General and administrative	7,222		4,882			2,340		47.9
Total operating expenses	28,591		25,041			3,550		14.2
Income from operations	3,324		5,717			(2,393)		(41.9)
Other expense:
Interest expense	28		33			(5)		*
Other expense	35		130			(95)		*
Total other expense	63		163			(100)		*
Income before income taxes	3,261		5,554			(2,293)		(41.3)
Income tax expense	1,437		97			1,340		*
Net income	$	1,824	$	5,457		$	(3,633)	(66.6)	%

* Not meaningful


	Three Months Ended March 31,
	2022		2021
	(as a percentage of revenue)

















Revenue	100.0	%	100.0	%
Cost of revenue	24.5		21.5
Gross profit	75.5		78.5
Operating expenses:
Sales and marketing	37.7		37.4
Research and development	12.8		14.1
General and administrative	17.1		12.5
Total operating expenses	67.6		63.9
Income from operations	7.9		14.6
Other expense:
Interest expense	0.1		0.1
Other expense	0.1		0.3
Total other expense	0.2		0.4
Income before income taxes	7.7		14.2
Income tax expense	3.4		0.2
Net income	4.3	%	13.9	%

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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 months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	1,143	$	1,202
Sales and marketing	71		159
Research and development	31		63
General and administrative	225		408
Total depreciation and amortization expense	$	1,470	$	1,832

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REVENUE

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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.

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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 Q1 2022 to Q1 2021

Revenue increased by 8.0%, or $3.1 million, to $42.3 million for the three months ended March 31, 2022 compared with $39.2 million for the prior year period. The change was primarily due to a $5.2 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 32.2%, or $4.6 million, compared to the prior year period, driven by an increase in new customers and expansions with existing customers. For the three months ended March 31, 2022, brands customers represented approximately 45% of our total revenue and 49% of total subscription revenue compared to approximately 36% and 42%, respectively, for the prior year period.

COST OF REVENUE

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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.

Comparison of Q1 2022 to Q1 2021

Cost of revenue increased by 23.5%, or $2.0 million, to $10.4 million for the three months ended March 31, 2022 compared with $8.4 million for the prior year period. The change was comprised primarily of increases of:

•$1.2 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;

•$0.4 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.

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OPERATING EXPENSES

SALES AND MARKETING EXPENSE

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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 Q1 2022 to Q1 2021

Sales and marketing expense increased by 9.0%, or $1.3 million, to $15.9 million for the three months ended March 31, 2022 compared with $14.6 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.

RESEARCH AND DEVELOPMENT EXPENSE

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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 Q1 2022 to Q1 2021

Research and development expense decreased by 1.9%, or $0.1 million, to $5.4 million for the three months ended March 31, 2022 compared with $5.5 million for the prior year period. The change was primarily driven by an increase in capitalized compensation and employee-related costs tied to software development and enhancement of our product offerings. In addition, a larger proportion of our research and development resources are staffed in lower cost locations. Refer to Note 5, "Capitalized Software Development Costs," to our condensed consolidated financial statements included in this report for additional information regarding capitalized software development costs.

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GENERAL AND ADMINISTRATIVE EXPENSE

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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 Q1 2022 to Q1 2021

General and administrative expense increased by 47.9%, or $2.3 million, to $7.2 million for the three months ended March 31, 2022 compared with $4.9 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;

•$0.6 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

•$0.2 million in recruiting costs to support the growth of our business.

ADJUSTED EBITDA

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Adjusted EBITDA represents our earnings before interest expense, income tax expense 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.

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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):


	Three Months Ended March 31,
	2022		2021
Net income	$	1,824	$	5,457
Adjustments:
Interest expense	28		33
Income tax expense	1,437		97
Depreciation and amortization expense	1,470		1,832
Total adjustments	2,935		1,962
EBITDA	4,759		7,419
Stock-based compensation expense	3,132		3,048
Lease abandonment and related costs	288		—
Contingent consideration fair value adjustment	—		(1,313)
Adjusted EBITDA	$	8,179	$	9,154

GROSS AND OPERATING MARGINS

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Comparison of Q1 2022 to Q1 2021

Gross margin declined by 300 basis points to 75.5% during the three months ended March 31, 2022 compared with 78.5% for the prior year period as a result of the increase in cost of revenue of 23.5% noted above, which exceeded the 8.0% increase in revenue.

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Operating margin declined by 670 basis points to 7.9% during the three months ended March 31, 2022 compared with 14.6% for the prior year period due to increases in operating expenses and cost of revenue of 14.2% and 23.5%, 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.

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 Q1 2022 to Q1 2021

Income tax expense was $1.4 million for the three months ended March 31, 2022 compared with $0.1 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.

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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.

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 $13.4 million as of March 31, 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

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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):

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	Three Months Ended March 31,
	2022		2021
Cash and cash equivalents provided by operating activities	$	7,918	$	8,379
Less: Purchases of property and equipment	(957)		(225)
Less: Payment of capitalized software development costs	(939)		(749)
Free cash flow	$	6,022	$	7,405

Free cash flow decreased by $1.4 million to $6.0 million for the three months ended March 31, 2022 compared with $7.4 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

•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;

•Payments on finance lease obligations; and

•Payment of financing costs.

Q1 2022

Operating Activities

Our cash provided by operating activities of $7.9 million consisted of net income of $1.8 million adjusted for non-cash items totaling $5.5 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 increases of $0.6 million from changes in assets and liabilities.

The net increase in cash of $0.6 million resulting from changes in assets and liabilities primarily consisted of:

•a $1.7 million decrease in accounts receivable driven by strong cash collections during the period;

•a $1.4 million increase in deferred revenue driven by an increase in net bookings and the timing of invoicing during the period; and

•a $1.0 million decrease in prepaid expenses and other assets driven by the timing of payments to our vendors during the period. These increases in cash were partially offset by decreases in cash due to:

•a $2.5 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 $1.0 million increase in deferred contract costs consisting of sales commissions and a portion of other incentive compensation driven by strong net bookings performance. These contract costs are deferred and amortized to expense over the expected period of benefit.

Investing Activities

Our cash used in investing activities of $1.9 million consisted of:

•$1.0 million of capital expenditures primarily related to the purchase of computer equipment; and

•$0.9 million of capitalized software development costs.

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Financing Activities

Our cash provided by financing activities of $0.3 million consisted of:

•$0.4 million in cash received upon the exercise of stock options; partially offset by

•$0.1 million used for the payment of taxes related to the net-share settlement of restricted stock units.

Q1 2021

Operating Activities

Our cash provided by operating activities of $8.4 million consisted of net income of $5.5 million adjusted for non-cash items totaling $3.4 million, which consisted of stock-based compensation expense, depreciation and amortization expense, bad debt recovery and other non-cash items, including the contingent consideration fair value adjustment, and cash decreases of $0.5 million from changes in assets and liabilities.

The net decrease in cash of $0.5 million resulting from changes in assets and liabilities primarily consisted of:

•a $2.2 million decrease in accrued expenses and accounts payable primarily due to the payment of bonuses earned in the prior year;

•a $1.1 million increase in accounts receivable driven by strong net bookings performance and an increase in variable revenue during the period; and

•a $1.1 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. These decreases in cash were partially offset by increases in cash due to:

•a $2.6 million increase in deferred revenue as a result of an increase in net bookings during the period; and

•a $1.3 million decrease in prepaid expenses and other assets driven by the timing of payments to our vendors during the period.

Investing Activities

Our cash used in investing activities of $1.0 million consisted of:

•$0.7 million of capitalized software development costs; and

•$0.2 million of capital expenditures primarily related to the purchase of computer equipment.

Financing Activities

Our cash provided by financing activities of $3.5 million consisted of:

•$3.6 million in cash received upon the exercise of stock options; partially offset by

•$0.1 million used for the payment of taxes related to the net-share settlement of restricted stock units.

SHARE REPURCHASE PROGRAM

In September 2021, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $25 million of our common stock through August 10, 2022. Repurchases may be made from time to time on the open market at prevailing prices or in negotiated transactions off the market. The share repurchase program does not obligate us to repurchase any particular amount of our shares. As of March 31, 2022, we had not repurchased any shares under this program.

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

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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.

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 three months ended March 31, 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 March 31, 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 March 31, 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

Not applicable.

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	*+	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under 2013 Equity Incentive Plan

10.2	*+	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for Non-U.S. Participants under 2013 Equity Incentive Plan

10.3	*+	Form of Performance Stock Unit Grant Notice and Performance Stock Unit Agreement under 2013 Equity Incentive Plan

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:

May 6, 2022

By:

/s/ Richard F. Cornetta

Richard F. Cornetta

Chief Financial Officer

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

Document

Exhibit 10.1

CHANNELADVISOR CORPORATION
RESTRICTED STOCK UNIT GRANT NOTICE
2013 EQUITY INCENTIVE PLAN

ChannelAdvisor Corporation (the “Company”) hereby awards to Participant the number of restricted stock units (“RSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth in this Restricted Stock Unit Grant Notice (the “Notice”), the 2013 Equity Incentive Plan (the “Plan”) and the Restricted Stock Unit Agreement (the “Award Agreement”), both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Award Agreement will have the same definitions as in the Plan or the Award Agreement. In the event of any conflict between the terms of the Award and the Plan, the terms of the Plan will control.

Participant:

Date of Grant:

Vesting Commencement Date:

Number of RSUs:

Vesting Schedule: The Award vests as to 25% of the RSUs on each of the first, second, third and fourth anniversaries of the Vesting Commencement Date (rounded down to the nearest whole RSU, except for the last vesting installment) such that 100% of the RSUs shall be vested on the fourth anniversary of the Vesting Commencement Date, subject to Participant’s Continuous Service with the Company through each such vesting date.

Issuance Schedule: Subject to any change on a Capitalization Adjustment, one share of Common Stock will be issued for each RSU that vests at the time set forth in Section 6 of the Award Agreement.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Notice, the Award Agreement, the Plan and the stock plan prospectus for this Plan. As of the Date of Grant, this Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements, promises and/or representations on the terms of the Award, with the exception, if applicable, of (i) any written employment or severance arrangement entered into between the Company and Participant that would provide for vesting acceleration of this Award upon the terms and conditions set forth therein, and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Award, Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

CHANNELADVISOR CORPORATION

PARTICIPANT:

By:

Signature

Title:

Date:

Attachments: Restricted Stock Unit Agreement, 2013 Equity Incentive Plan

CHANNELADVISOR CORPORATION

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Agreement (the “Agreement”) and in consideration of your services, ChannelAdvisor Corporation (the “Company”) has awarded you a Restricted Stock Unit Award (the “Award”) under its 2013 Equity Incentive Plan (the “Plan”) for the number of Restricted Stock Units indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. In the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control.

The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. GRANT OF THE AWARD. The Award represents your right to be issued on a future date one share of Common Stock for each Restricted Stock Unit that vests.

2. VESTING. Your Restricted Stock Units will vest as provided in the Grant Notice. Vesting will cease upon the termination of your Continuous Service. Any Restricted Stock Units that have not yet vested will be forfeited on the termination of your Continuous Service.

3. NUMBER OF RESTRICTED STOCK UNITS & SHARES OF COMMON STOCK.

(a) The Restricted Stock Units subject to your Award will be adjusted for Capitalization Adjustments, as provided in the Plan.

(b) Any additional Restricted Stock Units and any shares, cash or other property that become subject to the Award pursuant to this Section 3 will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units and shares covered by your Award.

(c) No fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share.

4. SECURITIES LAW COMPLIANCE. You will not be issued any Common Stock underlying the Restricted Stock Units or other shares with respect to your Restricted Stock Units unless either (i) the shares are registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive shares underlying your Restricted Stock Units if the Company determines that such receipt would not be in material compliance with such laws and regulations. You understand that the Company is under no obligation to register or qualify the shares under the Securities Act or with any securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, you agree that the Company shall have unilateral authority to amend this Agreement without your consent to the extent necessary to comply with securities or other laws applicable to the issuance of the shares.

5. TRANSFERABILITY. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of any portion of the Restricted Stock Units or the shares in respect of your Restricted Stock Units. For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares. This restriction on transfer will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units.

(a) Death. Your Restricted Stock Units are not transferable other than by will and by the laws of descent and distribution. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect transactions under the Plan, designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Common Stock or other consideration to which you were entitled at the time of your death pursuant to this Agreement. In the absence of such a designation, your executor or administrator of your estate will be entitled to receive, on behalf of your estate, such Common Stock or other consideration.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive the distribution of Common Stock or other consideration under your Restricted Stock Units, pursuant to the terms of a domestic relations order or official marital settlement agreement that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss with the Company’s General Counsel the proposed terms of any such transfer prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. The Company is not obligated to allow you to transfer your Award in connection with your domestic relations order or marital settlement agreement.

6. DATE OF ISSUANCE.

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.

(b) Subject to the satisfaction of the withholding obligations set forth in Section 10 of this Agreement, in the event one or more Restricted Stock Units vests, the Company will issue to you, on the applicable vesting date, one share of Common Stock for each Restricted Stock Unit that vests 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.

(c) However, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established Company-approved 10b5-1 trading plan), and (ii) the Company elects, prior to the Original Issuance Date, (1) not to satisfy the withholding obligations for Tax-Related Items described in Section 10 by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award (or if such share withholding procedure has not been approved by the Compensation Committee to the extent required under Section 10(b)(iv) below), (2) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 10 of this Agreement (including but not limited to a commitment under a previously established Company-approved 10b5-1 trading plan) and (3) not to permit you to pay the Tax-Related Items in cash, then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

7. DIVIDENDS. You will receive no benefit or adjustment to your Restricted Stock Units with respect to any cash dividend, stock dividend or other distribution except as provided in the Plan with respect to a Capitalization Adjustment.

8. RESTRICTIVE LEGENDS. The Common Stock issued with respect to your Restricted Stock Units will be endorsed with appropriate legends determined by the Company.

9. AWARD NOT A SERVICE CONTRACT. Your Continuous Service is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of your Restricted Stock Units or the issuance of the shares subject to your Restricted Stock Units), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

10. RESPONSIBILITY FOR TAXES.

(a) Regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer, in its discretion, to be an appropriate charge to you even if legally applicable to the Company or the Employer (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of your Award, including, but not limited to, the grant, vesting or settlement of Restricted Stock Units or the subsequent sale of shares of Common Stock acquired pursuant to such settlement; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of your Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b) Prior to the relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by one or a combination of the following:

(i) withholding from any compensation otherwise payable to you by the Company and/or the Employer;

(ii) causing you to tender a cash payment;

(iii) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be delivered in connection with your Stock Units to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or the Employer;

(iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date the amount of the Tax-Related Items withholding obligation is determined) equal to the amount of such Tax-Related Items; provided, however, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Company’s Compensation Committee; or

(v) any method determined by the Company to be in compliance with applicable law.

(c) Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable withholding rates, including maximum applicable rates, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the vested Restricted Stock Units, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying the Tax-Related Items.

(d) You agree to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares if you fail to comply with your obligations in connection with the Tax-Related Items.

11. NATURE OF GRANT. In accepting the Award, you acknowledge, understand and agree that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(b) the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

(c) all decisions with respect to future Restricted Stock Unit or other grants, if any, will be at the sole discretion of the Company;

(d) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not intended to replace any pension rights or compensation;

(e) you are voluntarily participating in the Plan;

(f) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not intended to replace any pension rights or compensation;

(g) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits or similar payments;

(h) unless otherwise agreed with the Company in writing, the Restricted Stock Units and the shares of Common Stock subject to the Restricted Stock Units, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of the Company;

(i) the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty;

(j) no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from the termination of your Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are providing service or the terms of your service agreement, if any);

(k) unless otherwise provided in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of Common Stock; and

(l) neither the Employer, the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Award or of any amounts due to you pursuant to the settlement of the Award or the subsequent sale of any shares of Common Stock acquired upon settlement.

12. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of Restricted Stock Units, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or an Affiliate or any other person.

13. OTHER DOCUMENTS. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

14. NOTICES. Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15. GOVERNING LAW; VENUE. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to that state’s conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Wake County, North Carolina, or the federal courts for the United States for Eastern District of North Carolina, and no other courts, where this grant is made and/or to be performed.

16. MISCELLANEOUS.

(a) The rights and obligations of the Company under your Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c) You acknowledge and agree that you have reviewed this Agreement and the Plan in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award.

(d) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

17. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided in this Agreement, in the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan will control. In addition, your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

18. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

19. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

20. AMENDMENT. Any amendment to this Agreement must be in writing, signed by a duly authorized representative of the Company. The Board reserves the right to amend this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicial decision.

21. NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

22. COMPLIANCE WITH SECTION 409A OF THE CODE. This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4). However, if this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled dates and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2). The Committee reserves the right, to the extent the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Award Agreement to ensure that the Restricted Stock Units qualify for exemption from or comply with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply thereunder if compliance is not practical; provided, however, that the Company makes no representations that the Restricted Stock Units will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to these Restricted Stock Units. Nothing in this Award Agreement shall provide a basis for any person to take any action against the Company or any Affiliate based on matters covered by Section 409A of the Code and neither the Company nor any Affiliate will have any liability under any circumstances to you or any other party if the Restricted Stock Units that are intended to be exempt from, or compliant with, Section 409A of the Code, are not so exempt or compliant or for any action taken by the Committee with respect thereto.

23. NO OBLIGATION TO MINIMIZE TAXES. The Company has no duty or obligation to minimize the tax consequences to you of this Award and will not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so.

24. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on your Award and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

25. WAIVER. You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other Participant.

* * *

This Restricted Stock Unit Agreement will be deemed to be signed and accepted by you upon the signing by you of the Grant Notice to which it is attached or upon your online acceptance of the Grant Notice

Document

Exhibit 10.2

CHANNELADVISOR CORPORATION
2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT GRANT NOTICE
FOR NON-U.S. PARTICIPANTS

ChannelAdvisor Corporation (the “Company”) hereby awards to Participant the number of restricted stock units (“RSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth in this Restricted Stock Unit Grant Notice for Non-U.S. Participants (the “Notice”), the 2013 Equity Incentive Plan (the “Plan”) and the Restricted Stock Unit Agreement for Non-U.S. Participants (the “Award Agreement”), including any special terms and conditions for Participant’s country set forth in the appendix to the Award Agreement (“the “Appendix” and, together with the Award Agreement, the “Agreement”), all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Award Agreement will have the same definitions as in the Plan or the Award Agreement. In the event of any conflict between the terms of the Award Agreement and the Plan, the terms of the Plan will control.

Participant:

Date of Grant:

Vesting Commencement Date:

Number of RSUs:

Issuance Schedule: Subject to any change on a Capitalization Adjustment, one share of Common Stock will be issued for each RSU that vests at the time set forth in Section 6 of the Award Agreement.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Notice, the Agreement, the Plan and the stock plan prospectus for this Plan. As of the Date of Grant, this Notice, the Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements, promises and/or representations on the terms of the Award, with the exception of any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Award, Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

CHANNELADVISOR CORPORATION

PARTICIPANT:

By:

Signature

Title:

Date:

Attachments: Award Agreement, Appendix, 2013 Equity Incentive Plan

CHANNELADVISOR CORPORATION

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT
FOR NON-U.S. PARTICIPANTS

Pursuant to the Restricted Stock Unit Grant Notice for Non-U.S. Participants (the “Grant Notice”) and this Restricted Stock Unit Agreement for Non-U.S. Participants (the “Award Agreement”), including any special terms and conditions for your country set forth in the appendix to this Award Agreement (the “Appendix” and, together with this Award Agreement, the “Agreement”), ChannelAdvisor Corporation (the “Company”) has awarded you a Restricted Stock Unit Award (the “Award”) under its 2013 Equity Incentive Plan (the “Plan”) for the number of Restricted Stock Units indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. In the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control.

The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. GRANT OF THE AWARD. The Award represents your right to be issued on a future date one share of Common Stock for each Restricted Stock Unit that vests.

For purposes of the Award, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company or any Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are providing service or the terms of your service agreement, if any) and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are providing service or the terms of your service agreement, if any); the Committee shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your Award (including whether you may still be considered to be providing services while on a leave of absence).

3. NUMBER OF RESTRICTED STOCK UNITS & SHARES OF COMMON STOCK.

(a) The Restricted Stock Units subject to your Award will be adjusted for Capitalization Adjustments, as provided in the Plan.

(c) No fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share.

4. SECURITIES LAW COMPLIANCE. You will not be issued any shares of Common Stock underlying the Restricted Stock Units or other shares with respect to your Restricted Stock Units unless either (i) the shares are registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive shares underlying your Restricted Stock Units if the Company determines that such receipt would not be in material compliance with such laws and regulations. You understand that the Company is under no obligation to register or qualify the shares under the Securities Act or with any securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, you agree that the Company shall have unilateral authority to amend this Agreement without your consent to the extent necessary to comply with securities or other laws applicable to the issuance of the shares.

5. TRANSFERABILITY. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of any portion of the Restricted Stock Units or the shares in respect of your Restricted Stock Units, except as expressly provided in this Section 5. For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares. This restriction on transfer will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units.

Your Restricted Stock Units are not transferable other than by will and by the laws of descent and distribution. At your death, vesting of your Award will cease and your executor or administrator of your estate will be entitled to receive, on behalf of your estate, any Common Stock or other consideration that vested but was not issued before your death.

6. DATE OF ISSUANCE.

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.

(b) Subject to the satisfaction of the withholding obligations for any Tax-Related Items (as defined in Section 9 of this Agreement), in the event one or more Restricted Stock Units vests, the Company will issue to you, on the applicable vesting date, one share of Common Stock for each Restricted Stock Unit that vests 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.

(c) However, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established Company-approved 10b5-1 trading plan), and (ii) the Company elects, prior to the Original Issuance Date, (1) not to satisfy the withholding obligations for Tax-Related Items by withholding shares of Common Stock from the shares otherwise due on the Original Issuance Date to you under this Award (or if such share withholding procedure has not been approved by the Compensation Committee to the extent required under Section 9(b)(iv) below), (2) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 9 of this Agreement (including but not limited to a commitment under a previously established Company-approved 10b5-1 trading plan) and (3) not to permit you to pay the Tax-Related Items in cash, then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs, (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

8. RESTRICTIVE LEGENDS. The Common Stock issued with respect to your Restricted Stock Units will be endorsed with appropriate legends determined by the Company.

9. RESPONSIBILITY FOR TAXES.

(i) withholding from any compensation otherwise payable to you by the Company and/or the Employer;

(ii) causing you to tender a cash payment;

(v) any method determined by the Company to be in compliance with applicable law.

10. NATURE OF GRANT. In accepting the Award, you acknowledge, understand and agree that:

(c) all decisions with respect to future Restricted Stock Unit or other grants, if any, will be at the sole discretion of the Company;

(d) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not intended to replace any pension rights or compensation;

(e) you are voluntarily participating in the Plan;

(f) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not intended to replace any pension rights or compensation;

(i) the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty;

11. Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other Award grant materials by and among, as applicable, the Employer, the Company and any other Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.

You understand that Data will be transferred to Merrill Lynch or any other third-party stock plan service provider as may be selected by the Company, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company, Merrill Lynch and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing your consent is that the Company would not be able to grant Restricted Stock Units or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

12. AWARD NOT A SERVICE CONTRACT. Your Continuous Service is not for any specified term and may be terminated by you or by the Employer at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of your Restricted Stock Units or the issuance of the shares subject to your Restricted Stock Units), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ or service of, or affiliation with, the Company or an Affiliate, including the Employer, or be interpreted as forming an employment or service contract with the Company or an Affiliate, including the Employer, ; (ii) constitute any promise or commitment by the Company, an Affiliate, including the Employer regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Employer of the right to terminate you at any time and without regard to any future vesting opportunity that you may have.

13. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of Restricted Stock Units, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or an Affiliate or any other person.

14. OTHER DOCUMENTS. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

15. NOTICES. Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail or similar foreign postal courier, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

16. GOVERNING LAW; VENUE. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to that state’s conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Wake County, North Carolina, or the federal courts for the United States for Eastern District of North Carolina, and no other courts, where this grant is made and/or to be performed.

17. MISCELLANEOUS.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(d) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

18. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided in this Agreement, in the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan will control. In addition, your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

19. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

20. LANGUAGE. If you have received this Agreement or any other document related to the Award and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

21. APPENDIX. Notwithstanding any provisions in this Award Agreement, the Award shall be subject to any special terms and conditions set forth in the Appendix to this Award Agreement. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Award Agreement.

22. NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

23. COMPLIANCE WITH SECTION 409A OF THE CODE. This Award is intended to comply with the “short-term deferral” rule set forth in U.S. Treasury Regulation Section 1.409A-1(b)(4). However, if this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of U.S.Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled dates and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is a “separate payment” for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2). The Committee reserves the right, to the extent the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Award Agreement to ensure that the Restricted Stock Units qualify for exemption from or comply with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply thereunder if compliance is not practical; provided, however, that the Company makes no representations that the Restricted Stock Units will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to these Restricted Stock Units. Nothing in this Award Agreement shall provide a basis for any person to take any action against the Company or any Affiliate based on matters covered by Section 409A of the Code and neither the Company nor any Affiliate will have any liability under any circumstances to you or any other party if the Restricted Stock Units that are intended to be exempt from, or compliant with, Section 409A of the Code, are not so exempt or compliant or for any action taken by the Committee with respect thereto.

* * *

APPENDIX TO THE

CHANNELADVISOR CORPORATION

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

FOR NON-U.S. PARTICIPANTS

Terms and Conditions

This Appendix to the Restricted Stock Unit Agreement for Non-U.S. Participants (the “Award Agreement”) includes additional terms and conditions that govern the grant of the Award in your country.

If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the Award is granted to you or are considered a resident of another country for local law purposes, the Company will determine to what extent the terms and conditions herein will apply to you.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the ChannelAdvisor Corporation 2013 Equity Incentive Plan (the “Plan”). The information is based on the securities, exchange control and other laws in effect in the respective countries as of February 2022. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information contained herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date when you vest in the Award or subsequently sell the shares of Common Stock acquired at vesting.

In addition, the information is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the Award is granted to you or are considered a resident of another country for local law purposes, the information contained herein may not be applicable to you.

Capitalized terms not explicitly defined in this Appendix have the definitions ascribed to them in the Plan and/or the Award Agreement, as applicable.

AUSTRALIA

Notifications

SECURITIES LAW INFORMATION. If you acquire shares of Common Stock pursuant to the Award and you offer the shares of Common Stock for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. You should obtain legal advice on disclosure obligations prior to making any such offer.

EXCHANGE CONTROL INFORMATION. Exchange control reporting is required for cash transactions exceeding A$10,000 and international fund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in the transfer, you will be required to file the report.

FRANCE

Terms and Conditions

AWARD TYPE. The Restricted Stock Units are not intended to qualify for favorable tax or social security treatment in France provided by sections L. 225-197-1 to L. 225-197-5 and Sections L. 22-10-59 to L. 22-10-60 of the French Commercial Code.

LANGUAGE CONSENT. By accepting the Award, you confirm having read and understood the documents related to the grant (the Grant Notice, the Award Agreement and the Plan), which were provided in the English language. You accept the terms of those documents accordingly.

CONSENTEMENT RELATIF A LA LANGUE. En acceptant cette Attribution, vous confirmez avoir lu et comprendre les documents relatifs à l’attribution (l’Avis, le Contrat et le Plan) qui ont été fournis en langue anglaise. Vous acceptez les dispositions de ces documents en connaissance de cause.

Notifications

FOREIGN ASSET / ACCOUNT REPORTING INFORMATION. French residents may hold shares of Common Stock and cash acquired under the Plan outside France, provided they declare all foreign accounts, whether open, current, or closed, on an annual basis on a special form N° 3916 together with their income tax return.

GERMANY

Notifications

EXCHANGE CONTROL INFORMATION. Cross-border payments in excess of €12,500, including any cross-border payments received in connection with the sale of shares of Common Stock acquired under the Plan or any dividends paid on such shares, must be reported monthly to the German Federal Bank (Bundesbank). The form of report (“Allgemeines Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) and is available in both German and English. In addition, you may be required to report the acquisition of shares of Common Stock under the Plan to the Bundesbank via email or telephone if the value of the shares acquired exceeds €12,500. You should consult with your personal advisor to ensure compliance with applicable exchange control reporting requirements.

IRELAND

Notifications

DIRECTOR NOTIFICATION OBLIGATION. If you are a director, shadow director or secretary of an Irish Affiliate, you must notify the Irish Affiliate in writing within five business days of receiving or disposing of an interest in the Company (e.g., Restricted Stock Units), or within five business days of becoming aware of the event giving rise to the notification requirement or within five business days of becoming a director or secretary if such an interest exists at the time, but only to the extent that you own 1% or more of the Company’s total voting share capital. This notification requirement also applies with respect to the interests of a spouse or children under the age of 18 (whose interests will be attributed to the director, shadow director or secretary).

SPAIN

Terms and Conditions

NATURE OF GRANT. The following provision supplements Section 10 of the Award Agreement:

By accepting the Restricted Stock Units, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.

You understand and agree that, unless otherwise provided in the Award Agreement, you will forfeit the Restricted Stock Units as of the date of the termination of your Continuous Service without entitlement to any shares of Common Stock underlying the Restricted Stock Units or to any amount of indemnification in the event of a termination of Continuous Service for any reason including, but not limited to, resignation, retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause (i.e., subject to a “despido improcedente”), individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment or service under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, and/or Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree 1382/1985.

You understand that the Company has unilaterally, gratuitously and in its own discretion decided to grant Restricted Stock Units under the Plan to certain individuals who may be employees of the Company or an Affiliate of the Company throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company or any Affiliate, other than as set forth in the Award Agreement. Consequently, you understand that the Restricted Stock Units are granted on the assumption and condition that the Restricted Stock Units and any shares of Common Stock acquired upon settlement of the Restricted Stock Units are not a part of any employment or service contract (either with the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation), or any other right whatsoever. Further, you understand that the Restricted Stock Units would not be granted to you but for the assumptions and conditions referred to above; thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken, or should any of the conditions not be met for any reason, any grant of or right to the Restricted Stock Units shall be null and void.

Notifications

SECURITIES LAW INFORMATION. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the Plan or the grant of the Restricted Stock Units. Neither the Plan nor the Award Agreement (including this Appendix) have not been nor will they be registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and they do not constitute a public offering prospectus.

EXCHANGE CONTROL INFORMATION. You are required to electronically declare to the Bank of Spain any security accounts (including brokerage accounts held abroad), as well as the securities (including shares of Common Stock acquired under the Plan) held in such accounts if the value of the transactions for all such accounts during the prior year or the balances of such accounts as of December 31 of the prior year exceeds €1 million.

Different thresholds and deadlines to file this declaration apply. However, if neither such transactions during the immediately preceding year nor the balances/positions as of December 31 exceed €1 million, no such declaration must be filed unless expressly required by the Bank of Spain. If any of such thresholds were exceeded during the current year, you may be required to file the relevant declaration corresponding to the prior year; however, a summarized form of declaration may be available. You should consult your personal tax or legal advisor for further information regarding your exchange control reporting obligations.

Additionally, the acquisition of shares of Common Stock under Plan must be declared for statistical purposes to the Direccion General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Industry, Trade and Tourism. Generally, the declaration must be filed in January for shares of Common Stock (and any other securities) owned as of December 31 of each year; however, if the value of the shares of Common Stock acquired or the amount of the sale proceeds you realize from the sale of shares exceeds a certain threshold, the declaration must be filed within one month of the acquisition or sale, as applicable.

FOREIGN ASSET / ACCOUNT REPORTING INFORMATION. To the extent you hold shares of Common Stock or have bank accounts outside Spain with a value in excess of €50,000 (for each type of asset category) as of December 31, you will be required to report information on such assets on your tax return Form 720 for such year with severe penalties in the event of non-compliance. After such shares or accounts are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously reported shares of Common Stock or accounts increases by more than €20,000 (for each type of asset category) as of each subsequent December 31, or if you sell shares of Common Stock or cancel bank accounts that were previously reported. You should consult with your personal tax advisor for further information regarding your foreign asset reporting obligations.

UNITED KINGDOM

Terms and Conditions

RESPONSIBILITY FOR TAXES. The following provisions supplement Section 9 of the Award Agreement:

You agree to indemnify the Company or the Employer for all Tax-Related Items that they are required to pay or withhold or have paid or will pay to Her Majesty’s Revenue & Customs (“HMRC”) (or any other relevant authority) on your behalf, and you authorize the Company or the Employer to recover such amounts by any of the means set out in Section 9 of the Award Agreement. You also agree to be liable for any Tax-Related Items related to the Award and legally applicable to you, and hereby covenant to pay any such Tax-Related items as and when requested by the Company, the Employer or by HMRC (or any other relevant authority).

Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that you are a director or an executive officer and the income tax is not collected from or paid by you within ninety (90) days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute a benefit to you on which additional income tax and National Insurance contributions (“NICs”) may be payable. You acknowledge that you will be responsible for reporting and paying any income tax due on this additional benefit directly to the HMRC under the self-assessment regime and for paying the Company or the Employer, as applicable, for the value of any employee NICs due on this additional benefit.

Document

Exhibit 10.3

CHANNELADVISOR CORPORATION
PERFORMANCE STOCK UNIT GRANT NOTICE
2013 EQUITY INCENTIVE PLAN

ChannelAdvisor Corporation (the “Company”) hereby awards to Participant the performance stock award consisting of a number of performance stock units (“PSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth in this Performance Stock Unit Grant Notice (the “Grant Notice”), the 2013 Equity Incentive Plan (the “Plan”) and the Performance Stock Unit Agreement, including any special terms and conditions for Participant’s country set forth in Exhibit B (the “Award Agreement”), both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Award Agreement will have the same definitions as in the Plan or the Award Agreement. In the event of any conflict between the terms of the Award Agreement and the Plan, the terms of the Plan will control.

Participant:

Date of Grant:

Target Number of PSUs:

Vesting Schedule: Unless otherwise provided in the Award Agreement, the PSUs shall vest and become payable in shares of Common Stock on the Vesting Dates set forth on the schedule attached as Exhibit A to the Award Agreement, (i) to the extent the Performance Goals applicable to the Performance Period specified in Exhibit A are attained, as determined according to Section 2 of the Award Agreement, and (ii) subject to Participant’s Continuous Service with the Company or an Affiliate from the Date of Grant through the applicable Vesting Dates.

The number of PSUs that shall be eligible to vest on each of the Vesting Dates shall be equal to the quotient of (i) the total number of PSUs that are determined to be eligible to vest based on the level of attainment of each of the Performance Goals in accordance with Section 2 of the Award Agreement, divided by (ii) the number of Vesting Dates (rounded down to the nearest whole PSU except for the last vesting installment, at which point any fractional portion of a PSU will be rounded up to the nearest whole PSU).

Issuance Schedule: Subject to any change on a Capitalization Adjustment, one share of Common Stock will be issued for each PSU that vests at the time set forth in Section 6 of the Award Agreement.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Award Agreement, the Plan and the stock plan prospectus for this Plan. As of the Date of Grant, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements, promises and/or representations on the terms of the Award, with the exception, if applicable, of (i) any written employment or severance arrangement entered into between the Company and Participant that would provide for vesting acceleration of this Award upon the terms and conditions set forth therein, and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Award, Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

CHANNELADVISOR CORPORATION

PARTICIPANT:

By:

Signature

Title:

Date:

Attachments: Performance Stock Unit Agreement, 2013 Equity Incentive Plan

CHANNELADVISOR CORPORATION

2013 EQUITY INCENTIVE PLAN

PERFORMANCE STOCK UNIT AGREEMENT

Pursuant to the Performance Stock Unit Grant Notice (the “Grant Notice”) and this Performance Stock Unit Agreement, including any special terms and conditions for your country set forth in Exhibit B (the “Award Agreement”), ChannelAdvisor Corporation (the “Company”) has awarded you a Performance Stock Unit (the “Award”) under its 2013 Equity Incentive Plan (the “Plan”) for the target number of performance stock units (“PSUs”) indicated in the Grant Notice (the “Target PSUs”). Capitalized terms not explicitly defined in this Award Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. In the event of any conflict between the terms in this Award Agreement and the Plan, the terms of the Plan will control.

The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. GRANT OF THE AWARD. The Award represents your right to be issued on a future date one share of Common Stock for each PSU that vests.

2. VESTING.

(a) As soon as reasonably practicable after the completion of the Performance Period specified in Exhibit A attached hereto, the Committee shall determine the level of attainment of each of the Performance Goals applicable to the PSUs as specified in Exhibit A. On the basis of the determined level of attainment of each of the Performance Goals, and the weighting assigned to each of the Performance Goals, the number of PSUs eligible to vest on each of the Vesting Dates will be calculated, and such PSUs will vest as provided in the Grant Notice and Exhibit A. To the extent that the level of performance attainment for any Performance Goal is below the applicable Threshold level for such Performance Goal (as set forth in Exhibit A), the unvested portion of the PSUs subject to such Performance Goal will be forfeited. Further, vesting will cease upon the termination of your Continuous Service and, subject to Section 2(c) below, any PSUs that have not yet vested will be forfeited on the termination of your Continuous Service.

(b) For purposes of the Award, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company or any Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are providing service or the terms of your service agreement, if any) and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are providing service or the terms of your service agreement, if any). The Committee shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your Award (including whether you may still be considered to be providing services while on a leave of absence).

(c) To the extent that any written employment or severance arrangement entered into between you and the Company provides for vesting acceleration of this Award upon your termination of Continuous Service, a Change in Control or in other circumstances, such acceleration of vesting will be with respect to the Target PSUs if the applicable vesting 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 event occurs at or after the end of the Performance Period.

3. NUMBER OF PSUS & SHARES OF COMMON STOCK.

(a) The PSUs subject to your Award will be adjusted for Capitalization Adjustments, as provided in the Plan.

(b) Any additional PSUs and any shares, cash or other property that become subject to the Award pursuant to this Section 3 will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other PSUs and shares covered by your Award.

(c) No fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. Any fraction of a share will be rounded down to the nearest whole share.

4. SECURITIES LAW COMPLIANCE. You will not be issued any Common Stock underlying the PSUs or other shares with respect to your PSUs unless either (i) the shares are registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive shares underlying your PSUs if the Company determines that such receipt would not be in material compliance with such laws and regulations. You understand that the Company is under no obligation to register or qualify the shares under the Securities Act or with any securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, you agree that the Company shall have unilateral authority to amend this Award Agreement without your consent to the extent necessary to comply with securities or other laws applicable to the issuance of the shares.

5. TRANSFERABILITY. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of any portion of the PSUs or the shares in respect of your PSUs, except as expressly provided in this Section 5. For example, you may not use shares that may be issued in respect of your PSUs as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares. This restriction on transfer will lapse upon delivery to you of shares in respect of your vested PSUs.

(a) Death. Your PSUs are not transferable other than by will and by the laws of descent and distribution. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company and any broker designated by the Company to effect transactions under the Plan, designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Common Stock or other consideration to which you were entitled at the time of your death pursuant to this Award Agreement. In the absence of such a designation, your executor or administrator of your estate will be entitled to receive, on behalf of your estate, such Common Stock or other consideration.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive the distribution of Common Stock or other consideration under your PSUs, pursuant to the terms of a domestic relations order or official marital settlement agreement that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss with the Company’s General Counsel the proposed terms of any such transfer prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. The Company is not obligated to allow you to transfer your Award in connection with your domestic relations order or marital settlement agreement.

6. DATE OF ISSUANCE.

(a) The issuance of shares in respect of the PSUs is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.

(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 (but in any event within the earlier of 60 days of such Vesting Date or December 31 of the calendar year in which the Vesting Date occurs, 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.

(c) However, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established Company-approved 10b5-1 trading plan), and (ii) the Company elects, prior to the Original Issuance Date, (1) not to satisfy the withholding obligations for Tax-Related Items by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award (or if such share withholding procedure has not been approved by the Committee to the extent required under Section 10(b)(iv) below), (2) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 10 of this Award Agreement (including but not limited to a commitment under a previously established Company-approved 10b5-1 trading plan) and (3) not to permit you to pay the Tax-Related Items in cash, then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

7. DIVIDENDS. You will receive no benefit or adjustment to your PSUs with respect to any cash dividend, stock dividend or other distribution except as provided in the Plan with respect to a Capitalization Adjustment.

8. RESTRICTIVE LEGENDS. The Common Stock issued with respect to your PSUs will be endorsed with appropriate legends determined by the Company.

9. AWARD NOT A SERVICE CONTRACT. Your Continuous Service is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Award Agreement (including, but not limited to, the vesting of your PSUs or the issuance of the shares subject to your PSUs), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Award Agreement or the Plan shall: (i) confer upon you any right to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Award Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Award Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

10. RESPONSIBILITY FOR TAXES.

(a) Regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer, in its discretion, to be an appropriate charge to you even if legally applicable to the Company or the Employer (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of your Award, including, but not limited to, the grant, vesting or settlement of the PSUs or the subsequent sale of shares of Common Stock acquired pursuant to such settlement or the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of your Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(i) withholding from any compensation otherwise payable to you by the Company and/or the Employer;

(ii) causing you to tender a cash payment;

(iii) permitting or requiring you to enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be delivered in connection with your PSUs to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or the Employer;

(v) any other method determined by the Company to be in compliance with applicable law.

(c) Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable withholding rates, including maximum applicable rates, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the PSUs that are eligible to vest, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying the Tax-Related Items.

11. NATURE OF GRANT. In accepting the Award, you acknowledge, understand and agree that:

(b) the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted in the past;

(d) the Award is granted as an incentive for future services and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate;

(e) you are voluntarily participating in the Plan;

(f) the Award and the shares of Common Stock subject to the Award, and the income from and value of same, are not intended to replace any pension rights or compensation;

(h) unless otherwise agreed with the Company in writing, the PSUs and the shares of Common Stock subject to the PSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of the Company;

(i) the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty;

(k) unless otherwise provided in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the PSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of Common Stock; and

12. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of unvested PSUs, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property pursuant to this Award Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Award Agreement until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Award Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company of an Affiliate or any other person.

14. NOTICES. Any notices provided for in this Award Agreement or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15. GOVERNING LAW; VENUE. The Award and the provisions of this Award Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to that state’s conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Award Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Wake County, North Carolina, or the federal courts for the United States for Eastern District of North Carolina, and no other courts, where this grant is made and/or to be performed.

16. MISCELLANEOUS.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c) You acknowledge and agree that you have reviewed this Award Agreement and the Plan in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all terms of your Award.

(d) This Award Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Award Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

17. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided in this Award Agreement, in the event of any conflict between the provisions of this Award Agreement and those of the Plan, the provisions of the Plan will control. In addition, your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

18. SEVERABILITY. If all or any part of this Award Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Award Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

19. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Award Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

20. AMENDMENT. Any amendment to this Award Agreement must be in writing, signed by a duly authorized representative of the Company. The Board reserves the right to amend this Award Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicial decision.

22. COMPLIANCE WITH SECTION 409A OF THE CODE. This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4). However, if this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled dates and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2). The Committee reserves the right, to the extent the Committee deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Award Agreement to ensure that the PSUs qualify for exemption from or comply with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply thereunder if compliance is not practical; provided, however, that the Company makes no representations that the PSUs will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to these PSUs. Nothing in this Award Agreement shall provide a basis for any person to take any action against the Company or any Affiliate based on matters covered by Section 409A of the Code and neither the Company nor any Affiliate will have any liability under any circumstances to you or any other party if the PSUs that are intended to be exempt from, or compliant with, Section 409A of the Code, are not so exempt or compliant or for any action taken by the Committee with respect thereto.

23. COUNTRY-SPECIFIC PROVISIONS. Notwithstanding any provisions in this Award Agreement, the Award shall be subject to any special terms and conditions set forth in Exhibit B to this Award Agreement. Moreover, if you relocate to one of the countries included in Exhibit B, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit B constitutes part of this Award Agreement.

25. NO OBLIGATION TO MINIMIZE TAXES. The Company has no duty or obligation to minimize the tax consequences to you of this Award and will not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so.

26. WAIVER. You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other Participant.

* * *

This Performance Stock Unit Agreement will be deemed to be accepted by you upon your online accepted of the Performance Stock Unit Grant Notice to which it is attached.

EXHIBIT A

1. Number of PSUs Eligible to Vest:

The actual number of PSUs that are eligible to vest in accordance with Section 2 of the Award Agreement (the “Eligible PSUs”) shall be determined based on the attainment level of Revenue Growth (as defined below) and Adjusted EBITDA (as defined below), during the Performance Period, in accordance with the formula and performance attainment levels for each Performance Goal, as set forth below.

Eligible PSUs shall equal the sum of: (A) + (B), where

(A) = the Target Number of PSUs (set forth in the Grant Notice), multiplied by 75%, multiplied by the applicable Performance Attainment Factor achieved for Revenue Growth (as set forth in the table below)

(B) = the Target Number of PSUs (set forth in the Grant Notice), multiplied by 25%, multiplied by the applicable Performance Attainment Factor achieved for Adjusted EBITDA (as set forth in the table below)

2. Performance Period: January 1, 2022 – December 31, 2023

3. Performance Goals and Attainment Percentages:


Performance Goal	Below Threshold	Threshold	Target	Maximum
Revenue Growth*	< $373.9	$373.9	$393.5	$413
Adjusted EBITDA*	< $76.2	$76.2	$82.6	$89.0
Performance Attainment Factor	0%	50%	100%	200%

*Amounts in millions.

With respect to each Performance Goal, attainment between Threshold and Target performance and between Target and Maximum performance will be subject to straight-line interpolation. To the extent that the level of performance attainment for any Performance Goal is below the applicable Threshold level for such Performance Goal (as set forth in the table above), the unvested portion of the PSUs subject to such Performance Goal will be forfeited.

4. Performance Goal Adjustments: The Committee may make adjustments to the manner in which the applicable Performance Goal is determined as it deems equitable and appropriate to exclude the effect (whether positive or negative) of any of the following types of events or matters with respect to the Company occurring after the Date of Grant: (a) unusual, non-recurring or infrequent matters, transactions or events affecting the Company or its consolidated financial statements; (b) changes in accounting principles, practices or policies or in

tax laws or other laws or requirements; or (c) other similar events, matters or changed circumstances. Each such adjustment, if any, shall be made solely for the purpose of maintaining the intended economics of the Award in light of changed circumstances in order to prevent the dilution or enlargement of your rights with respect to the PSUs.

5. Performance Criteria:

“Revenue Growth” shall mean the Company’s year-over-year growth in revenue as reported in the Company’s annual financial statements in the Company’s Form 10-K (“Revenue”) for the two fiscal years coinciding with the Performance Period, calculated on a compound adjusted growth rate basis and expressed as a percentage.

“Adjusted EBITDA” shall mean the Company’s operating profit as measured by earnings before interest, taxes, depreciation, amortization, stock based compensation and other one-time expense and as reported in the Company’s annual financial statements in the Company’s Form 10-K for the fiscal years coinciding with the Performance Period.

6. Vesting Dates (assuming Performance Goals are attained):

First Vesting Date: Second anniversary of Date of Grant.

Second Vesting Date: Third anniversary of Date of Grant.

EXHIBIT B

COUNTRY-SPECIFIC PROVISIONS

Terms and Conditions

This Exhibit B to the Performance Stock Unit Agreement (the “Award Agreement”) includes additional terms and conditions that govern the grant of the Award in your country.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the ChannelAdvisor Corporation 2013 Equity Incentive Plan (the “Plan”). The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2022. Such laws are often complex and change frequently. As a result, you should not rely on the information contained herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date when you vest in the Award or subsequently sell the shares of Common Stock acquired at vesting.

In addition, the information is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result. Accordingly, you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

If you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment to another country after the Award is granted to you or are considered a resident of another country for local law purposes, the information contained herein may not be applicable to you.

Capitalized terms not explicitly defined in this Exhibit B have the definitions ascribed to them in the Plan and/or the Award Agreement, as applicable.

AUSTRALIA

Notifications

Securities Law Information. If you acquire shares of Common Stock pursuant to the Award and you offer the shares of Common Stock for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law. You should obtain legal advice on disclosure obligations prior to making any such offer.

Exchange Control Information. Exchange control reporting is required for cash transactions exceeding A$10,000 and international fund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in the transfer, you will be required to file the report.

UNITED KINGDOM

Terms & Conditions

Responsibility for Taxes. The following provisions supplement Section 10 of the Award Agreement:

You agree to indemnify the Company or the Employer for all Tax-Related Items that they are required to pay or withhold or have paid or will pay to Her Majesty’s Revenue & Customs (“HMRC”) (or any other relevant authority) on your behalf, and you authorize the Company or the Employer to recover such amounts by any of the means set out in Section 10 of the Award Agreement. You also agree to be liable for any Tax-Related Items related to the Award and legally applicable to you, and hereby covenant to pay any such Tax-Related items as and when requested by the Company, the Employer or by HMRC (or any other relevant authority).

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:	May 6, 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:	May 6, 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 March 31, 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
May 6, 2022						May 6, 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.