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Table of Contents
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, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from                          to                         
Commission file number 001-33508
 Item
Edgio, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware20-1677033
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
11811 North Tatum Blvd., Suite 3031,
Phoenix, AZ 85028
(Address of principal executive offices, including Zip Code)
(602850-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act;
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareEGIONasdaq
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated 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 Exchange Act).    Yes    No  
The number of shares outstanding of the registrant’s Common Stock, par value $0.001 per share, as of August 11, 2023: 222,702,083 shares.


Table of Contents
EDGIO, INC.
FORM 10-Q
Quarterly Period Ended March 31, 2023
TABLE OF CONTENTS
  Page
PART I. FINANCIAL INFORMATION
Item 1.FINANCIAL STATEMENTS
Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022
Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022
Unaudited Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022
Unaudited Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2023 and 2022
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022
Notes to Unaudited Consolidated Financial Statements
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 4.CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
Item 1A.RISK FACTORS
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item 3.DEFAULTS UPON SENIOR SECURITIES
Item 4.MINE SAFETY DISCLOSURES
Item 5.OTHER INFORMATION
Item 6.EXHIBITS
SIGNATURES
 


Table of Contents
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the words “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events, as well as trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These statements include, among other things:
our beliefs regarding delivery traffic growth trends and demand for digital content and edge services;
our expectations regarding revenue, costs, expenses, gross margin, and capital expenditures;
our plans regarding investing in our Media and Applications platforms, our coordinated complete solution to deliver instant, secure, and reliable digital experiences, as well as other products and technologies;
our beliefs regarding the competition within the digital edge platform industry;
our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
our expectations regarding headcount and our ability to recruit personnel;
the impact of certain new accounting standards and guidance as well as the time and cost of continued compliance with existing rules and standards;
our plans with respect to investments in marketable securities;
our expectations and strategies regarding acquisitions;
our expectations regarding litigation and other pending or potential disputes;
our ability to remediate the material weaknesses identified in internal control over financial reporting;
our determination to restate the prior period consolidated financial statements and its impact on investor confidence and reputational issues;
our ability to maintain an effective system of internal controls;
our estimations regarding taxes and belief regarding our tax reserves;
our approach to identifying, attracting and keeping new and existing clients, our focus on core market growth segments where we have a right-to-win, as well as our expectations regarding client turnover;
the sufficiency of our sources of funding;
our beliefs regarding our interest rate risk;
our beliefs regarding inflation risks;
our beliefs regarding expense and productivity of and competition for our sales force;
our beliefs regarding the significance of our large clients;
our beliefs regarding the United States and global economy; and
our beliefs regarding the impact of health epidemics and pandemics, such as the COVID-19 pandemic, on our current and potential clients, our balance sheet, financial condition, and results of operations.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the caption “Risk Factors” in Part II, Item 1A in this Quarterly Report on Form 10-Q and those discussed in other documents we file with the Securities and Exchange Commission (the “SEC”).
In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
The forward-looking statements contained herein are based on our current expectations and assumptions and on information available as of the date of the filing of this Quarterly Report on Form 10-Q. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless expressly indicated or the context requires otherwise, the terms “Edgio,” “company,” “we,” “us,” and “our” in this document refer to Edgio, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries. All information is presented in thousands, except per share amounts, client count, headcount and where specifically noted.


Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.        Financial Statements
4

Table of Contents
Edgio, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
March 31,
2023
December 31,
2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$32,787 $55,275 
Marketable securities15,396 18,734 
Accounts receivable, net (1)82,461 84,627 
Income taxes receivable373 105 
Prepaid expenses and other current assets (1)36,987 36,374 
Total current assets168,004 195,115 
Property and equipment, net72,976 73,467 
Operating lease right of use assets5,053 5,290 
Deferred income taxes2,388 2,338 
Goodwill168,961 169,156 
Intangible assets, net86,348 91,661 
Other assets (1)2,586 5,353 
Total assets$506,316 $542,380 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable (1)$48,312 $52,776 
Deferred revenue10,500 9,286 
Operating lease liability obligations4,483 4,557 
Income taxes payable3,286 3,133 
Financing obligations6,839 6,346 
Other current liabilities (1)76,947 76,160 
Total current liabilities150,367 152,258 
Convertible senior notes, net122,849 122,631 
Operating lease liability obligations, less current portion8,066 9,181 
Deferred income taxes602 596 
Deferred revenue, less current portion2,333 2,949 
Financing obligations, less current portion12,738 13,784 
Other long-term liabilities721 1,658 
Total liabilities297,676 303,057 
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued
  and outstanding
  
Common stock, $0.001 par value; 300,000 shares authorized; 222,702 and 222,232 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
223 222 
Common stock contingent consideration16,300 16,300 
Additional paid-in capital811,571 807,507 
Accumulated other comprehensive loss(11,430)(11,665)
Accumulated deficit(608,024)(573,041)
Total stockholders’ equity208,640 239,323 
Total liabilities and stockholders’ equity$506,316 $542,380 
(1)    Includes amounts due to/from related parties. See Notes 6, 9, and 20 for further details.

The accompanying notes are an integral part of the unaudited consolidated financial statements.
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Edgio, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
 Three Months Ended March 31,
 20232022
Revenue (1)$101,948 $55,339 
Cost of revenue:
Cost of services (1)(2)67,353 32,673 
Depreciation — network3,610 5,848 
Total cost of revenue70,963 38,521 
Gross profit30,985 16,818 
Operating expenses:
General and administrative (1)16,836 15,833 
Sales and marketing (1)19,622 7,627 
Research and development (1)21,016 9,577 
Depreciation and amortization5,607 1,032 
Restructuring charges500 698 
Total operating expenses63,581 34,767 
Operating loss(32,596)(17,949)
Other income (expense):
Interest expense(1,577)(1,431)
Interest income397 27 
Other, net(809)(713)
Total other expense(1,989)(2,117)
Loss before income taxes(34,585)(20,066)
Income tax expense 398 206 
Net loss$(34,983)$(20,272)
Net loss per share:
Basic$(0.16)$(0.15)
Diluted$(0.16)$(0.15)
Weighted average shares used in per share calculation:
Basic222,462 135,528 
Diluted222,462 135,528 

(1)The three months ended March 31, 2023, includes revenue and costs from related parties. See Note 20 for further details.
(2)    Cost of services excludes amortization related to intangible assets, including technology, customer relationships, and trade names, which are included in depreciation and amortization in operating expenses.

The accompanying notes are an integral part of the unaudited consolidated financial statements.
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Edgio, Inc.
Unaudited Consolidated Statements of Comprehensive Loss
(In thousands)
 Three Months Ended March 31,
 20232022
Net loss$(34,983)$(20,272)
Other comprehensive gain (loss), net of tax:
Unrealized gain (loss) on investments2 (88)
Foreign currency translation gain (loss)233 (571)
Other comprehensive gain (loss)235 (659)
Comprehensive loss$(34,748)$(20,931)
The accompanying notes are an integral part of the unaudited consolidated financial statements.
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Edgio, Inc.
Unaudited Consolidated Statements of Stockholders' Equity
(In thousands)
For the Three Months Ended March 31, 2023
Common StockCommon Stock Contingent ConsiderationAdditional
Paid-In Capital
Accumulated Other Comprehensive LossAccumulated DeficitTotal
SharesAmount
Balance December 31, 2022222,232 $222 $16,300 $807,507 $(11,665)$(573,041)$239,323 
Net loss— — — — — (34,983)(34,983)
Change in unrealized gain on available-for-sale investments, net of taxes— — — — 2 — 2 
Foreign currency translation adjustment, net of taxes— — — — 233 — 233 
Exercise of common stock options6 — 3 — — 3 
Vesting of restricted stock units503 1 — (1)— —  
Restricted stock units surrendered in lieu of withholding taxes(39)— — (194)— — (194)
Share-based compensation— — — 4,256 — — 4,256 
Balance March 31, 2023222,702 $223 $16,300 $811,571 $(11,430)$(608,024)$208,640 

For the Three Months Ended March 31, 2022
Common Stock
SharesAmountAdditional
Paid-In Capital
Accumulated Other Comprehensive LossAccumulated DeficitTotal
Balance December 31, 2021134,337 $134 $576,807 $(8,345)$(436,522)$132,074 
Net loss— — — — (20,272)(20,272)
Change in unrealized loss on available-for-sale investments, net of taxes— — — (88)— (88)
Foreign currency translation adjustment, net of taxes— — — (571)— (571)
Exercise of common stock options3,138 3 7,983 — — 7,986 
Vesting of restricted stock units978 1 (1)— —  
Restricted stock units surrendered in lieu of withholding taxes(318)— (1,285)— — (1,285)
Share-based compensation— — 6,745 — — 6,745 
Issuance of common stock for business acquisition43 — — — — — 
Balance March 31, 2022138,178 $138 $590,249 $(9,004)$(456,794)$124,589 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
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Edgio, Inc.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 Three Months Ended March 31,
 20232022
Operating activities
Net loss$(34,983)$(20,272)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization9,217 6,880 
Share-based compensation5,200 7,012 
Foreign currency remeasurement loss809 242 
Deferred income taxes (2)
Accounts receivable charges1,032 272 
(Accretion) amortization of (discount) premium on marketable securities(180)280 
Noncash interest expense218 209 
Changes in operating assets and liabilities:
Accounts receivable1,134 (12,161)
Prepaid expenses and other current assets(3,607)(2,728)
Income taxes receivable(268)(2)
Other assets1,815 466 
Accounts payable and other current liabilities(4,230)3,813 
Deferred revenue2,951 (868)
Income taxes payable(2,244)(655)
Other long term liabilities(937)(55)
Net cash used in operating activities (24,073)(17,569)
Investing activities
Purchases of marketable securities(8,583)(6,839)
Sale and maturities of marketable securities12,103 9,087 
Purchases of property and equipment(3,788)(5,863)
Cash used for acquisition of business (163)
Net cash used in investing activities (268)(3,778)
Financing activities
Proceeds from capital contributions2,135  
Proceeds from financing obligations158 1,602 
Repayment of financing obligations(661)(1,336)
Payments of employee tax withholdings related to restricted stock vesting(194)(1,285)
Proceeds from employee stock plans3 7,986 
Net cash provided by financing activities1,441 6,967 
Effect of exchange rate changes on cash and cash equivalents412 (363)
Net decrease in cash and cash equivalents(22,488)(14,743)
Cash and cash equivalents, beginning of period55,275 41,918 
Cash and cash equivalents, end of period$32,787 $27,175 
Supplemental disclosure of cash flow information
Cash paid during the period for interest$1,485 $2,282 
Cash paid during the period for income taxes, net of refunds$7 $868 
Property and equipment remaining in accounts payable and other current liabilities$2,253 $2,026 
Noncash additions to financing receivables$108 $2,779 
Noncash additions to short-term financing liabilities$33 $774 
Noncash additions to long-term financing liabilities$75 $2,005 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
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Edgio, Inc.
Notes to Unaudited Consolidated Financial Statements
March 31, 2023
1. Nature of Business
Edgio, Inc. (“Edgio”) is a globally-scaled, edge-enabled solutions provider for fast, secure, and frictionless digital experiences. Our solutions include customer-focused edge platforms running on top of our Global Network, Media and Applications Platforms. The media platform enables companies to stream large files (video, software downloads, live events) across the globe in a fast and secure way. The Edgio applications platform enables our clients to build, secure, and accelerate their web-based applications.
We were incorporated in Delaware in 2003, and have operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. We began international operations in 2004. On June 15, 2022, we changed our corporate name from Limelight Networks, Inc. to Edgio, Inc.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”). They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the interim periods presented and of a normal recurring nature. This quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and footnotes included in our annual report on Form 10-K for the fiscal year ended December 31, 2022. All information is presented in thousands, except per share amounts and where specifically noted.
The consolidated financial statements include accounts of Edgio and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results and outcomes may differ from those estimates. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or for any future periods.
In accordance with its accounting policies, the company reviews the estimated useful lives of its property and equipment on an ongoing basis. In January 2023, we completed an assessment of the useful lives of our network equipment and concluded to adjust our estimate of the useful life of our network equipment from three to five years due to advances in technology and improvements in how we operate our network equipment. The effect of this change in estimate, effective January 1, 2023, was a reduction of $3,770 primarily in depreciation - network expense in cost of services within our consolidated statement of operations, an increase of net income by approximately $3,601, and an increase in basic and diluted earnings per share by $0.02, for the three months ended March 31, 2023.
Restatement of Previously Issued Consolidated Financial Statements
The company restated the consolidated financial statements for the years ended December 31, 2021 and 2020 presented in its Annual Report on Form 10-K for the year ended December 31, 2022, necessary to correct for the following errors: (i) accounting for certain financing arrangements (as failed sale leasebacks), (ii) accounting treatment for certain transitional services, and (iii) other immaterial adjustments. In addition, the company restated its unaudited quarterly financial data for the periods ended September 30, 2022 and 2021, June 30, 2022 and 2021, and March 31, 2022 and 2021. Such restated and unaudited quarterly financial data and related impacted amounts were presented in the company's Annual Report on Form 10-K for the year ended December 31, 2022. All amounts in this quarterly report on Form 10-Q affected by the restatement, including but not limited to the three months ended March 31, 2022, reflect such restated amounts. For the three months ended March 31, 2023, we incurred restatement related expenses of $2,175 included in general and administrative within our unaudited consolidated statement of operations.

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Adopted Accounting Standards
None
Recently Issued Accounting Standards applicable to Edgio, Inc.
None
Significant Accounting Policies
There have been no changes in the significant accounting policies from those that were disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
Our contractual arrangements with customers generally specify monthly billing terms, and we apply the variable consideration allocation exception and record revenue based on actual usage during the month. Certain contracts contain minimum commitments over the contractual term; however, we generally have concluded that these commitments are not substantive. Accordingly, the consideration for these contracts is substantially considered variable and is recognized based on actual usage as we apply the variable consideration allocation exception to these contracts. These customers have entered into contracts with contract terms generally from one to ten years.
As of March 31, 2023, we have approximately $69,087 of remaining unsatisfied performance obligations for contracts with terms over one year. Of the remaining unsatisfied performance obligations we expect to recognize 33% in 2023, 31% in 2024, 14% in 2025, 7% in 2026, and the remainder in 2027 and thereafter.
From time to time, we enter into arrangements in which we receive payments from customers based upon contractual billing schedules. We record accounts receivables when the right to consideration becomes unconditional. Contract liabilities primarily reflect deferred revenue from advance payments we have received from customers. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. Revenue recognized in the three months ended March 31, 2023 and 2022 from amounts included in deferred revenue at the beginning of the period was $2,670 and $2,099, respectively.
3. Business Acquisitions
Edgecast Acquisition
On June 15, 2022, Edgio completed the acquisition (the Edgecast Acquisition) of 100% of the equity interests of Edgecast Inc., a California corporation (“Edgecast”), and certain Edgecast-related businesses and assets from College Parent for total purchase consideration of $199,837. The total purchase consideration included 75,842 shares of our common stock allocated to the Edgecast Acquisition. Edgecast is a leading provider of edge security, content delivery and video services. Edgio accounted for the acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and liabilities assumed to be recognized on the balance sheet at their fair values as of the acquisition date.
We retained an independent third-party valuation firm to assist in our valuation of the acquired assets and liabilities.
The following table presents the allocation of the purchase price consideration for Edgecast:
Consideration:
Common stock$192,956 
Common stock - contingent consideration16,300 
Less: Consideration allocated to employee compensation arrangements(9,419)
Total consideration allocated to Edgecast Acquisition
$199,837 
The fair value of our common stock consideration was based on the 79,734 shares issued to College Parent and the opening price of our common stock of $2.42 per share on the acquisition closing date. Inclusive within the common stock consideration, and pursuant to the purchase agreement, Edgio issued 7,287 shares of common stock in exchange for cash from College Parent of $30,000. As the economic substance of this issuance was to provide additional cash to Edgecast for liabilities
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that existed prior to the business combination and the transaction occurred on June 15, 2022, Edgio concluded that this was part of the business combination, and therefore, should be considered as part of the consideration transferred in exchange for the acquisition of Edgecast. The initial common stock purchase consideration of 79,734 shares was adjusted downward for 3,892 shares issued for employee compensation arrangements accounted for as separate transactions as further discussed below.
The purchase agreement contains an “earn-out” or contingent consideration provision in the event that the price of our common stock exceeds certain thresholds during the period ending on the third anniversary of the acquisition date of the transaction (the “Earnout Period”), Edgio will be required to issue approximately up to an additional 12,685 shares of our common stock to College Parent (the “common stock contingent consideration”). If during the Earnout Period, the closing share price of our common stock exceeds the following share prices for 10 trading days in any 30 consecutive trading day period the following number of shares of our common stock will be issued: (a) approximately 5,398 shares of our common stock if the closing share price of our common stock exceeds $6.1752 per share, (b) approximately 4,048 shares of our common stock if the closing share price of our common stock exceeds $8.2336 per share, and (c) approximately 3,239 shares of our common stock if the closing share price of our common stock exceeds $10.2920 per share. Edgio estimated that the fair value of the common stock contingent consideration, with the assistance of a third-party valuation specialist using a Monte Carlo simulation, and concluded it was $16,300 as of the acquisition date.
As a result of the Edgecast Acquisition, certain cash awards that existed for Edgecast’s employees require the transferred employee to provide services to Edgio in the post-combination period in order for the cash award to be earned. When the awards are earned, Edgio will either a) pay the employees the amount earned and will subsequently be reimbursed by College Parent or b) College Parent will directly pay the employee the amount earned. Edgio considered whether the employee awards were part of the Edgecast Acquisition's purchase consideration, or separate transactions, and not part of purchase accounting. Under ASC 805, a transaction entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity, rather than primarily for the benefit of the acquiree (or its former owners) before the combination, is likely to be a separate transaction. The employee awards represent compensation for post-combination services rendered to Edgio and the reimbursement right was initiated by Edgio for the future economic benefit of the combined entity. Accordingly, Edgio concluded the employee awards represent transactions separate from the Edgecast Acquisition. Edgio allocated $9,419 of the total consideration transferred to College Parent to the employee compensation arrangements based on the post-combination fair value of the employee awards. As service is required to be rendered for the award to be earned, Edgio will recognize expense as the employee performs service. The employee compensation arrangements related to post-combination services and the related reimbursement right resulted in the recognition of $6,573 in prepaid expenses and other current assets and $2,846 in other assets on June 15, 2022.
During the three months ended March 31, 2023, Edgio recorded $666, in compensation expense to the unaudited consolidated statements of operations as a result of the employee compensation arrangements. Of the $666 of compensation expense, $111, $103, $42, and $410 was recorded to cost of services, general and administrative, sales and marketing, and research and development, respectively. The employee compensation arrangements are time-based vesting only and the unrecognized compensation expense was $2,030 as of March 31, 2023, of which $1,654 is expected to be recognized during the remainder of 2023 and the remainder in 2024.
The Edgecast Acquisition was accounted for under the acquisition method of accounting and the operating results of Edgecast have been included in our unaudited consolidated financial statements as of the acquisition date. Under the acquisition method of accounting, the aggregate amount of consideration paid by us was allocated to Edgecast’s net tangible assets and intangible assets based on their estimated fair values as of the acquisition date. The excess of the purchase price over the value of the net tangible assets and intangible assets was recorded to goodwill. The factors contributing to the recognition of goodwill were based upon our conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill, which is non-deductible for tax purposes, represents expected synergies and the assembled workforce at the time of the acquisition.
The following table summarizes the final allocation of the purchase consideration to the acquisition date fair value of the assets, including intangible assets, liabilities assumed and related goodwill acquired:
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Cash (inclusive of $30,000 as described above)
$30,037 
Accounts receivable48,669 
Income taxes receivable119 
Prepaid expenses and other current assets 5,676 
Property and equipment 32,185 
Operating lease right of use assets1,365 
Goodwill 56,546 
Intangible assets
  Customer relationships41,000 
  Technology49,000 
Other assets1,220 
Total assets acquired265,817 
Accounts payable and accrued liabilities6,917 
Deferred revenue1,259 
Operating lease liability obligations3,071 
Income taxes payable2,465 
Other current liabilities27,500 
Operating lease liability obligations, less current portion2,531 
Deferred income taxes22,237 
Total liabilities65,980 
Total purchase consideration$199,837 
The fair value of acquired property and equipment was valued using the market approach and indirect cost approach and primarily consists of computer and networking equipment. The weighted-average depreciation period for the acquired property and equipment was 3.0 years at the acquisition date. The fair value of the acquired intangible assets was determined as follows, customer relationships, utilizing the excess earnings method, and technology, utilizing the relief from royalty method. The amortization period of the acquired intangible assets was 7.0 years for customer relationships and 4.0 for technology at the acquisition date. The deferred income tax liability was $22,237, primarily as a result of the fair value attributable to the identifiable intangible assets.
4. Investments in Marketable Securities
The following is a summary of marketable securities (designated as available-for-sale) as of March 31, 2023:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Certificate of deposit$40 $ $ $40 
Commercial paper7,885   7,885 
Corporate notes and bonds5,527  5 5,522 
Treasury bills995   995 
Agency bonds994   994 
Total marketable securities$15,441 $ $5 $15,436 

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The amortized cost and estimated fair value of marketable securities as of March 31, 2023, by maturity are shown below:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Available-for-sale securities:
Due in one year or less$15,401 $ $5 $15,396 
Due after one year and through five years40   40 
Total marketable securities$15,441 $ $5 $15,436 
The following is a summary of marketable securities (designated as available-for-sale) as of December 31, 2022:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Certificate of deposit$40 $ $ $40 
Commercial paper5,884   5,884 
Corporate notes and bonds11,395  16 11,379 
Treasury bills985   985 
Agency bonds486   486 
Total marketable securities$18,790 $ $16 $18,774 
The amortized cost and estimated fair value of marketable securities as of December 31, 2022, by maturity are shown below:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Available-for-sale securities:
Due in one year or less$18,750 $ $16 $18,734 
Due after one year and through five years40   40 
Total marketable securities$18,790 $ $16 $18,774 
5. Accounts Receivable, net
Accounts receivable, net include:
 March 31,December 31,
 20232022
Accounts receivable$88,134 $90,046 
Less: credit allowance(864)(1,514)
Less: allowance for doubtful accounts(4,809)(3,905)
Total accounts receivable, net$82,461 $84,627 
The following is a roll-forward of the allowance for doubtful accounts related to trade accounts receivable for the three months ended March 31, 2023 and the twelve months ended December 31, 2022:
Three Months EndedTwelve Months Ended
March 31, 2023December 31, 2022
Beginning of period$3,905 $1,500 
  Provision for credit losses1,032 2,413 
  Recoveries/write-offs(128)(8)
End of period$4,809 $3,905 
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6. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets include:
 March 31,December 31,
 20232022
Prepaid bandwidth and backbone$7,506 $7,431 
VAT receivable6,657 5,805 
Prepaid expenses and insurance4,237 5,352 
Financing receivables3,168 3,218 
Related party receivable7,775 7,962 
Vendor deposits and other7,644 6,606 
Total prepaid expenses and other current assets$36,987 $36,374 
7. Property and Equipment, net
Property and equipment, net include:
 March 31,December 31,
 20232022
Network equipment$178,236 $176,899 
Computer equipment and software3,632 3,680 
Furniture and fixtures1,322 1,322 
Leasehold improvements6,021 6,017 
Other equipment17 17 
Total property and equipment189,228 187,935 
Less: accumulated depreciation (116,252)(114,468)
Total property and equipment, net$72,976 $73,467 
Cost of revenue depreciation expense related to property and equipment was $3,610 and $5,848, for the three months ended March 31, 2023 and 2022, respectively.
Operating expense depreciation and amortization expense related to property and equipment was $294 and $246, for the three months ended March 31, 2023 and 2022, respectively.
8. Goodwill and Other Intangible Assets
We have recorded goodwill as a result of past business acquisitions. We concluded that we have one reporting unit and assigned the entire balance of goodwill to this reporting unit as of March 31, 2023. We review goodwill for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may exceed their fair value. The estimated fair value of the reporting unit is determined using a market approach. Our market capitalization is adjusted for a control premium based on the estimated average and median control premiums of transactions involving companies comparable to us. We noted that the estimated fair value of our reporting unit, using an estimated control premium of 30%, on March 31, 2023 exceeded carrying value by approximately $20,075 or 10%. Adverse changes to certain key assumptions as described above could result in a future goodwill impairment charge to earnings, such charge may be material.
During 2023, management identified a goodwill impairment indicator related to a decline in the company's stock price. Management will continue to monitor the relevant goodwill impairment indicators to determine whether a goodwill impairment charge to earnings is appropriate, and such impairment charge, if any, could be material.
The changes in the carrying amount of goodwill for the three months ended March 31, 2023, were as follows:
Balance, December 31, 2022$169,156 
Foreign currency translation adjustment(195)
Balance, March 31, 2023$168,961 
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Intangible assets consisted of the following as of March 31, 2023:
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Trade name$91 $(48)$43 
Client relationships48,090 (6,779)41,311 
Technology57,480 (12,486)44,994 
Total other intangible assets$105,661 $(19,313)$86,348 
Aggregate expense related to amortization of other intangible assets for the three months ended March 31, 2023 was $5,313. There were no impairment charges incurred in the three months ended March 31, 2023.
As of March 31, 2023, the weighted-average remaining useful lives of our acquired intangible assets were 1.4 years for trade name, 5.8 years for client relationships, and 3.2 years for technology, and 4.5 years in total, for all acquired intangible assets.
Intangible assets consisted of the following as of December 31, 2022:
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Trade name$91 $(40)$51 
Client relationships48,090 (4,960)43,130 
Technology57,480 (9,000)48,480 
Total other intangible assets$105,661 $(14,000)$91,661 
Aggregate expense related to amortization of other intangible assets for the three months ended March 31, 2022 was $786. There were no impairment charges incurred in the three months ended March 31, 2022.
As of December 31, 2022, the weighted-average remaining useful lives of our acquired intangible assets were 1.7 years for trade name, 6.1 years for client relationships, and 3.4 years for technology, and 4.7 years in total, for all acquired intangible assets.
As of March 31, 2023, future amortization expense related to our other intangible assets is expected to be recognized as follows:
Remainder of 2023$16,112 
202421,415 
202521,394 
202613,141 
20275,911 
Thereafter8,375 
Total$86,348 
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9. Other Current Liabilities
Other current liabilities include:
 March 31,December 31,
 20232022
Accrued compensation and benefits$21,127 $19,982 
Accrued cost of revenue34,128 27,422 
Accrued interest payable741 1,823 
Related party payable2,989 9,931 
Restructuring charges and accrued legal fees4,498 6,184 
Other accrued expenses13,464 10,818 
Total other current liabilities$76,947 $76,160 
10. Debt
Convertible Senior Notes - Due 2025
On July 27, 2020, we issued $125,000 aggregate principal amount of 3.50% Convertible Senior Notes due 2025 (the “Notes”), including the initial purchasers’ exercise in full of their option to purchase an additional $15,000 principal amount of the Notes, in a private placement to qualified institutional buyers in an offering exempt from registration under the Securities Act of 1933, as amended. The net proceeds from the issuance of the Notes was $120,741 after deducting transaction costs.
The Notes are governed by an indenture (the “Indenture”) between us, as the issuer, and U.S. Bank, National Association, as trustee. The Notes are senior, unsecured obligations of ours and will be equal in right of payment with our senior, unsecured indebtedness; senior in right of payment to our indebtedness that is expressly subordinated to the notes; effectively subordinated to our senior, secured indebtedness, including future borrowings, if any, under our amended credit facility with First Citizens Bank (formerly Silicon Valley Bank) (“FCB”), to the extent of the value of the collateral securing that indebtedness; and structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us after which the Notes become automatically due and payable.
As a result of the restatement of our previously issued consolidated financial statements described in Note 2, we were unable to file our Annual Report on Form 10-K for the year ended December 31, 2022 on a timely basis. For the same reason, we were also unable to timely file our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. Pursuant to the terms of the Indenture, on April 12, 2023, we notified the Trustee that due to our failure to timely file with the SEC our Annual Report on Form 10-K for the year ended December 31, 2022, a default (as defined in the Indenture) had occurred.
On April 17, 2023, a holder of the Notes delivered a notice of default to U.S. Bank National Association (the “Trustee”) and the company notifying us that we were in breach of the Indenture for failing to provide the Trustee our Annual Report on Form 10-K for the year ended December 31, 2022. Under the terms of the Indenture, such default matured into an event of default (the “Reporting Event of Default”) on June 17, 2023. On July 21, 2023, the Trustee for the Notes delivered a notice of default to the company notifying us that we were in breach of the Indenture for failing to provide the Trustee our Quarterly Report on Form 10-Q for the three-months ended March 31, 2023. Under the terms of the Indenture, such default was cured with the filing of this Quarterly Report.

By notice to the holders of the Notes and the Trustee on June 12, 2023 and in accordance with the Indenture, we notified the Trustee that due to our failure to timely file with the SEC our Annual Report on Form 10-K, the company elected that the sole remedy for the Reporting Event of Default during the period beginning on June 17, 2023 (the “Reporting Event of Default Date”) and ending on the earlier of (x) 365 calendar days after the Reporting Event of Default Date and (y) the date on which we deliver the Annual Report for the year ended December 31, 2022 to the Trustee will consist of the accrual of additional interest (“Special Interest”) at a rate equal to one quarter of one percent (0.25%) of the principal amount of the outstanding Notes for the first 180 calendar days on which Special Interest accrues and, thereafter, at a rate per annum equal to one half of one percent (0.50%) of the principal amount of the outstanding Notes. The Notes will be subject to acceleration pursuant to the Indenture on account of the Reporting Event of Default if we fail to pay Special Interest when due under the Indenture. We delivered our Annual Report for the year ended December 31, 2022 to the Trustee on June 29, 2023, and as a result we incurred an immaterial amount of Special Interest charges for the three months ended March 31, 2023, which was paid to holders of the Notes on August 1, 2023.
The Notes mature on August 1, 2025, unless earlier converted, redeemed or repurchased in accordance with their term
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prior to the maturity date. Interest is payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2021. The holders of the Notes may convert all or any portion of their Notes at their option only in the following circumstances:
(1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price per share of our common stock exceeds 130% of the conversion price of $8.53 for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
(2) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the measurement period) in which the trading price per $1 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;
(3) upon the occurrence of certain corporate events or distributions of our common stock;
(4) if we call such Notes for redemption; and
(5) at any time from, and including, May 1, 2025, until the close of business on the second scheduled trading day immediately before the maturity date.
On or after May 1, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in minimum principal amount denominations of $1 or any integral multiple of $1 in excess thereof, at the option of the holder regardless of the foregoing circumstances. Upon conversion, we may satisfy our conversion obligation by paying or delivering, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at our election, in the manner and subject to the terms and conditions provided in the Indenture. The Notes have an initial conversion rate of 117.2367 shares of our common stock per $1 principal amount of Notes, which is equal to an initial conversion price of approximately $8.53 per share of our common stock. The initial conversion price of the Notes represents a premium of approximately 27.5% over the last reported sale price of our common stock on The Nasdaq Global Select Market of $6.69 per share on July 22, 2020. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will increase the conversion rate in certain circumstances for a holder who elects to convert its Notes in connection with such a corporate event or convert its Notes called (or deemed called) for redemption in connection with such notice of redemption, provided that the conversion rate will not exceed 149.4768 share of our common stock per $1 principal amount of Notes, subject to adjustment.
We may not redeem the Notes prior to August 4, 2023. We may redeem for cash all, or any portion in an authorized denomination, of the Notes, at our option, on or after August 4, 2023, and on or prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, whether or not consecutive, including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that we are not required to redeem or retire the Notes periodically.
If we undergo a fundamental change (as defined in the Indenture), holders may require us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
As of March 31, 2023, the conditions allowing holders of the Notes to convert had not been met and therefore the Notes are not yet convertible. The Notes are classified as long-term debt on our unaudited consolidated balance sheets as of March 31, 2023, and December 31, 2022.

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The net carrying amount of the liability and equity components of the Notes consisted of the following:
March 31,December 31,
20232022
Liability component:
  Principal$125,000 $125,000 
  Unamortized transaction costs(2,151)(2,369)
Net carrying amount$122,849 $122,631 
Interest expense recognized related to the Notes was as follows:
Three Months Ended March 31,
20232022
Contractual interest expense$1,106 $1,094 
Amortization of transaction costs218 209 
Total$1,324 $1,303 
As of March 31, 2023, and December 31, 2022, the estimated fair value of the Notes was $111,009 and $107,031, respectively. We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period, which are considered Level 2 inputs.
Capped Call Transactions
In connection with the offering of the Notes, we entered into privately negotiated capped call transactions with certain counterparties (collectively, the Capped Calls). The Capped Calls have an initial strike price of approximately $8.53 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $13.38 per share, subject to certain adjustments. The Capped Calls are generally intended to reduce or offset the potential economic dilution of approximately 14.7 million shares to our common stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Calls are considered indexed to our own stock and are equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $16,400 incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital.
Line of Credit
In November 2015, we entered into the original Loan and Security Agreement (the “Credit Agreement”) with FCB. Since the inception, there have been ten amendments, with the most recent amendment being in June 2023 (the “Tenth Amendment”). Under the Tenth Amendment, our borrowing capacity as of March 31, 2023 was the lesser of the commitment amount of $50,000 or 50% of eligible accounts receivable while the maturity date remains at April 2, 2025. All outstanding borrowings owed under the Credit Agreement, if any, become due and payable no later than the final maturity date of April 2, 2025. As of March 31, 2023 and December 31, 2022, we had no outstanding borrowings.
As of March 31, 2023, borrowings under the Credit Agreement bear interest at the greater of the current prime rate minus 0.25% or 4%. In the event of default, obligations shall bear interest at a rate per annum that is 3% above the then applicable rate.
Amendment fees and other commitment fees are included in interest expense. During the three months ended March 31, 2023 and 2022, there was no interest expense and fees expense and amortization was $24 and $10, respectively.
Any borrowings are secured by essentially all of our domestic personal property, with a negative pledge on intellectual property. FCB’s security interest in our foreign subsidiaries is limited to 65% of the voting stock of each such foreign subsidiary.
We are required to maintain an Adjusted Quick Ratio of at least 1.0 to 1.0. We are also subject to certain customary limitations on our ability to, among other things, incur debt, grant liens, make acquisitions and other investments, make certain restricted payments such as dividends, dispose of assets or undergo a change in control. As of March 31, 2023 and December 31, 2022 we were not in compliance with our Adjusted Quick Ratio requirement. On June 27, 2023, we have received a waiver for, among other thing, our non-compliance.
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11. Restructuring Charges
During the third and fourth quarters of 2021, management committed to restructure certain parts of the company to align our workforce and facility requirements with our continued investment in the business as we focus on cost efficiencies, improved growth and profitability. As a result, outside service contracts and professional fees were incurred. Additionally, with the decision to close, and in some cases, sublease facilities, we incurred impairment charges related to certain operating lease assets and related leasehold improvements. During the three months ended March 31, 2022, we incurred $698 of restructuring charges, the majority of which related to this restructuring plan and were incurred due to facility impairment charges. Actions related to this restructuring program are substantially complete.
In the fourth quarter of 2022, management committed to a separate action to restructure strategic and financial objectives and to optimize resources for long term growth including a reduction in global workforce. For the three months ended March 31, 2023, relating to this action, we incurred $500 of costs which primarily consisted of employee severance and related benefits costs. Future restructuring charges related to this plan, are expected to be immaterial.
The following table summarizes the activity of our restructuring accrual (recorded in other current liabilities on our unaudited consolidated balance sheet) during the three months ended March 31, 2023 (in thousands):
2023 Restructuring Charges
Employee Severance and Related BenefitsShare-Based CompensationFacilities Related ChargesProfessional Fees and OtherTotal
Balance as of December 31, 2022$2,772 $240 $3,172 $ $6,184 
Costs incurred (recorded in restructuring charges)500    500 
Cash disbursements(1,488) (698) (2,186)
Noncash charges     
Balance as of March 31, 2023$1,784 $240 $2,474 $ $4,498 
The following table summarizes the activity of our restructuring accrual during the three months ended March 31, 2022 (in thousands):
2022 Restructuring Charges
Employee Severance and Related BenefitsShare-Based CompensationFacilities Related ChargesProfessional Fees and OtherTotal
Balance as of January 1, 2022$235 $ $180 $ $415 
Costs incurred (recorded in restructuring charges)(95) 791 2 698 
Cash disbursements(140) (687)(2)(829)
Noncash charges  3  3 
Balance as of March 31, 2022$ $ $287 $ $287 

On June 6, 2023, the company's Board of Directors approved a restructuring plan (the “Restructuring Plan”) in order to reduce its operating costs to continue to optimize its business model and increase efficiencies. The Restructuring Plan is anticipated to entail a reduction in force of approximately 134 employees, or approximately 12% of the company’s global workforce, to be implemented through the third quarter of 2023. Restructuring charges of approximately $3,200 related to the Restructuring Plan will be recorded in the second quarter of 2023. Remaining future estimated restructuring charges of approximately $500 are expected be recorded in the third quarter of 2023. These charges, which will be cash expenditures, consist of one-time severance charges and continuation of health benefits. The company anticipates it will generate approximately $23,700 in net annual savings.


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12. Contingencies              
Legal Matters
We are subject to various legal proceedings and claims, either asserted or unasserted, arising from time to time, in the ordinary course of business. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. We have not recorded any accruals related to any legal matters. No assurances can be given with respect to the extent or outcome of any such litigation in the future.
Indirect Tax Matters
We are subject to indirect taxation in various states and foreign jurisdictions. Laws and regulations that apply to communications and commerce conducted over the Internet are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on us conducting business online or providing Internet-related services. Increased regulation could negatively affect our business directly, as well as the businesses of our clients, which could reduce their demand for our services. For example, tax authorities in various states and abroad may impose taxes on the Internet-related revenue we generate based on regulations currently being applied to similar but not directly comparable industries.
There are many transactions and calculations where the ultimate tax determination is uncertain. In addition, domestic and international taxation laws are subject to change. In the future, we may come under audit, which could result in changes to our tax estimates. We believe we have maintained adequate tax reserves to offset potential liabilities that may arise upon audit. Our reserve for indirect tax matters was immaterial as of March 31, 2023 and December 31, 2022. Although we believe our tax estimates and associated reserves are reasonable, the final determination of tax audits and any related litigation could be materially different than the amounts established for tax contingencies. To the extent these estimates ultimately prove to be inaccurate, the associated reserves would be adjusted, resulting in the recording of a benefit or expense in the period in which a change in estimate or a final determination is made.
13. Net Loss Per Share
We calculate basic and diluted net loss per weighted average share. We use the weighted-average number of shares of common stock outstanding during the period for the computation of basic net loss per share. Diluted net loss per share includes the dilutive effect of all potentially dilutive common stock, including awards granted under our equity incentive compensation plans in the weighted-average number of shares of common stock outstanding.
The following table sets forth the components used in the computation of basic and diluted net loss per share for the periods indicated (in thousands, except per share data):
Three Months Ended March 31,
20232022
Net loss$(34,983)$(20,272)
Basic weighted-average outstanding shares of common stock222,462 135,528 
Basic weighted-average outstanding shares of common stock222,462 135,528 
Dilutive effect of stock options, restricted stock units, other equity incentive plans, convertible senior notes, and contingently issuable shares  
Diluted weighted-average outstanding shares of common stock222,462 135,528 
Basic net loss per share$(0.16)$(0.15)
Diluted net loss per share$(0.16)$(0.15)
For the three months ended March 31, 2023 and 2022, respectively, the following potentially dilutive common stock, including awards granted under our equity incentive compensation plans were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive.
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Three Months Ended March 31,
20232022
Employee stock purchase plan2,090 230 
Stock options and warrants410 3,177 
Restricted stock units77 5,834 
Convertible senior notes14,654 14,654 
Contingently issuable shares (1)
12,685  
29,916 23,895 
(1) Represents common stock contingent consideration related to the Edgecast Acquisition.
14. Stockholders’ Equity
Common Stock
On March 14, 2017, our board of directors authorized a $25,000 share repurchase program. Any shares repurchased under this program will be canceled and returned to authorized but unissued status. We did not purchase any shares during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there remained $21,200 under this share repurchase program.
Amended and Restated Equity Incentive Plan
We established the 2007 Equity Incentive Plan (the “2007 Plan”), which allows for the grant of equity, including stock options and restricted stock unit awards. In June 2016, our stockholders approved the Amended and Restated Equity Incentive Plan (the “Restated 2007 Plan”), which amended and restated the 2007 Plan. Approval of the Restated 2007 Plan replaced the terms and conditions of the 2007 Plan with the terms and conditions of the Restated 2007 Plan and extended the term of the Restated 2007 Plan to April 2026. There was no increase in the aggregate amount of shares available for issuance. The total number of shares available to be issued under the Restated 2007 Plan as of March 31, 2023 was approximately 17,730.
2017 Moov Corporation Equity Incentive Plan
In connection with our acquisition of Moov, we assumed each outstanding and unvested option to purchase Moov common stock granted pursuant to the Moov Corporation 2017 Equity Incentive Plan and such options became exercisable to purchase shares of our common stock, subject to appropriate adjustments to the number of shares and the exercise price of each such option.
2021 Inducement Plan
In November 2021, we adopted the Inducement Plan pursuant to which we reserved 11,000 shares of common stock, to be used exclusively for grants of equity-based awards to highly qualified prospective officers and employees as an inducement material to the individual's entry into employment with us within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan provides for the grant of equity-based awards in the form of non-statutory stock options, stock appreciation rights, restricted stock awards, and restricted stock unit awards. The Inducement Plan was adopted by our board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. We have issued 10,497 shares under the Inducement Plan as of March 31, 2023.
Employee Stock Purchase Plan
In June 2013, our stockholders approved our 2013 Employee Stock Purchase Plan (ESPP), authorizing the issuance of 4,000 shares. In May 2019, our stockholders approved the adoption of Amendment 1 to the ESPP. Amendment 1 increased the number of shares authorized to 9,000 shares (an increase of 5,000 shares) and amended the maximum number of shares of common stock that an eligible employee may be permitted to purchase during each offering period to be 5 shares. The ESPP allows participants to purchase our common stock at a 15% discount of the lower of the beginning or end of the offering period using the closing price on that day. During the three months ended March 31, 2023 and 2022, we did not issue any shares under the ESPP. As of March 31, 2023, shares reserved for issuance to employees under this plan totaled 2,220, and we held employee contributions of $1,340 (included in other current liabilities) for future purchases under the ESPP.

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Preferred Stock
Our board of directors have authorized the issuance of up to 7,500 shares of preferred stock as of March 31, 2023. The preferred stock may be issued in one or more series pursuant to a resolution or resolutions providing for such issuance duly adopted by the board of directors. As of March 31, 2023, the board of directors had not adopted any resolutions for the issuance of preferred stock.
15. Accumulated Other Comprehensive Loss
Changes in the components of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2023, were as follows:
ForeignAvailable for
CurrencySale SecuritiesTotal
Balance, December 31, 2022$(11,640)$(25)$(11,665)
  Other comprehensive gain before reclassifications233 2 235 
Amounts reclassified from accumulated other comprehensive loss   
Net current period other comprehensive gain233 2 235 
Balance, March 31, 2023$(11,407)$(23)$(11,430)
16. Share-Based Compensation
The following table summarizes the components of share-based compensation expense included in our unaudited consolidated statements of operations:
 Three Months Ended
March 31,
 20232022
Share-based compensation expense by type:
Stock options and warrants$477 $534 
Restricted stock units3,016 4,160 
Financial-based performance restricted stock units853 2,196 
ESPP854 122 
Total share-based compensation expense$5,200 $7,012 
Share-based compensation expense:
Cost of services$679 $408 
General and administrative expense1,416 2,103 
Sales and marketing expense617 1,181 
Research and development expense2,488 3,320 
Total share-based compensation expense$5,200 $7,012 
Unrecognized share-based compensation expense totaled $25,241 as of March 31, 2023, of which $3,523 related to stock options, $9,485 related to financial-based performance restricted stock units, $12,233 related to restricted stock units. Unrecognized share-based compensation includes both time-based and performance-based equity. We currently expect to recognize share-based compensation expense of $9,462 during the remainder of 2023, $10,059 in 2024, $4,528 in 2025, and the remainder thereafter based on scheduled vesting of the stock options, performance-based restricted stock units, and restricted stock units outstanding as of March 31, 2023.
17. Leases and Commitments
Operating Leases - Right of Use Assets and Liabilities
We have various operating leases for office space that expire through 2030. Below is a summary of our right of use assets and liabilities as of March 31, 2023.
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Right-of-use assets$5,053 
Lease liability obligations, current$4,483 
Lease liability obligations, less current portion8,066 
Total lease liability obligations$12,549 
Weighted-average remaining lease term4.6 years
Weighted-average discount rate5.05 %
During the three months ended March 31, 2023, operating lease costs were $619 and included primarily in operating expenses in our consolidated statements. During the three months ended March 31, 2023, cash paid for operating leases was $1,359. During the three months ended March 31, 2022, operating lease costs were $360 and included primarily in operating expenses in our consolidated statements. During the three months ended March 31, 2022, cash paid for operating leases was $652.
Approximate future minimum lease payments for our right of use assets over the remaining lease periods as of March 31, 2023, are as follows:
Remainder of 2023$3,796 
20242,360 
20251,440 
20261,468 
20271,497 
Thereafter3,866 
Total minimum payments14,427 
Less: amount representing interest1,878 
Total$12,549 
Financing Obligations
We enter into equipment purchase arrangements (“Open Edge arrangements”) with our partners, typically Internet service providers, where we deliver point-of-presence equipment to our partner in exchange for cash consideration. The equipment is subsequently leased back for substantially all of the equipment’s economic life, resulting in the classification of these arrangements as failed-sale leasebacks that are accounted for as financing arrangements.
Open Edge arrangements' financing obligations are recognized as short-term or long-term liabilities based on the estimated payment dates. Minimum commitment payments required to pay down the financing liability by the end of the minimum commitment term, are based on our estimated incremental borrowing rate and are recorded as a reduction of the financing liability in the period they are paid.
Interest expense related to Open Edge arrangements was $229 and $118 for the three months ended March 31, 2023 and 2022, respectively.

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As of March 31, 2023, future minimum payments under the Open Edge arrangements were as follows:
Remainder of 2023$6,656 
20244,990 
20254,806 
20263,862 
20271,222 
Thereafter52 
Total minimum payments21,588 
Less: imputed interest2,011 
Total financing obligations19,577 
Less: financing obligations, current6,839 
Financing obligations, less current portion$12,738 
Purchase Commitments
We have long-term commitments for bandwidth usage and co-location with various networks and Internet service providers. The following summarizes our minimum non-cancellable commitments for future periods as of March 31, 2023:
Remainder of 2023$53,534 
202440,168 
202527,846 
202618,850 
20277,045 
Thereafter988 
Total minimum payments (1)$148,431 
(1) Includes Open Edge partner commitments which typically have a minimum fee commitment that is paid to the partners over the course of the arrangement. The aggregate minimum fee commitment is allocated between cost of services and financing obligations. The above table reflects the minimum fee commitment allocated to cost of services.
18. Concentrations
During the three months ended March 31, 2023, we had two clients, Verizon and Amazon, who each represented 10% or more of our total revenue. During the three months ended March 31, 2022, we had two clients, Amazon and Sony, who each represented 10% or more of our total revenue. As of March 31, 2023, we had four clients, Verizon, Amazon, Disney, and Microsoft, who each represented 10% or more of our total accounts receivable. As of December 31, 2022, we had three clients, Amazon, Verizon, and Microsoft, who each represented 10% or more of our total accounts receivable.
Revenue from clients located within the United States, our country of domicile, was $78,186 for the three months ended March 31, 2023, compared to $31,967 for the three months ended March 31, 2022.
During the three months ended March 31, 2023, based on client location, we had one country, the United States, that individually accounted for 10% or more of our total revenue. During the three months ended 2022, based on client location, we had two countries, the United States and Japan, that individually accounted for 10% or more of our total revenue.
19. Income Taxes
Income taxes for the interim periods presented have been included in the accompanying unaudited consolidated financial statements on the basis of an estimated annual effective tax rate. Based on an estimated annual effective tax rate and discrete items, income tax expense for the three months ended March 31, 2023 and 2022 was $398 and $206, respectively. Income tax expense was different than the statutory income tax rate primarily due to us providing for a valuation allowance on deferred tax assets in the U.S., and the recording of state and foreign tax expense for the three month periods.
We file income tax returns in jurisdictions with varying statutes of limitations. Tax years 2019 through 2022 remain subject to examination by federal tax authorities. Tax years 2018 through 2022 generally remain subject to examination by state tax authorities. As of March 31, 2023, we are not under any federal or state income tax examinations.
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For the three months ended March 31, 2023 and 2022, respectively, there was no impact to income tax expense related to the Global Intangible Low-Taxed Income inclusion (“GILTI”) as a result of our net operating loss carryforwards (“NOL”) and valuation allowance position.
20. Related Party Transactions
College Parent and its related affiliates is considered to be a related party following the close of the Edgecast Acquisition due to its ownership interest. As of March 31, 2023, College Parent had approximately 36% ownership interest in Edgio. As of March 31, 2023, we had recorded receivables from College Parent and its affiliates related to reimbursement for certain compensation and severance plans. Additionally, as of March 31, 2023, we had recorded payables related to transition service agreements, which had been entered into between Edgio and College Parent and its related affiliates. For the three months ended March 31, 2023, expenses related to these agreements were $8,305 of which $5,166 was recorded in cost of services, $2,102 was recorded in general and administrative, and $1,037 was recorded in research and development within our unaudited consolidated statement of operations. The following table summarizes the amounts due to and due from College Parent and its related affiliates:
March 31,December 31,
20232022
Prepaid assets and other current assets (1)
$7,775 $7,962 
Other assets 2,318 
Total amount due from related party$7,775 $10,280 
Accounts payable$13,747 $18,224 
Other current liabilities2,989 9,931 
Total amount due to related party (2)
$16,736 $28,155 
(1) December 31, 2022 balance included $2,271 of receivables related to reimbursement from College Parent and its related affiliates for certain employee compensation expenses in excess of company requirements as of December 31, 2022 which were recorded as a capital contributions.
(2) Inclusive of $5,484 of transition service agreement credits from College Parent and its related affiliates issued in 2022 which recorded as a capital contributions.
Revenue from College Parent and its affiliates were $718 for the three months ended March 31, 2023. Trade accounts receivable were $941 and $1,695 as of March 31, 2023 and December 31, 2022, respectively.
21. Segment Reporting and Geographic Information
Our chief operating decision maker (who is our Chief Executive Officer) reviews our financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. We operate in one industry segment — content delivery and related services and we operate in three geographic areas — Americas, Europe, Middle East, and Africa (“EMEA”), and Asia Pacific.
Revenue by geography is based on the location of the client from where the revenue is earned based on bill to locations. The following table sets forth our revenue by geographic area:
 Three Months Ended March 31,
 20232022
Americas$79,940 79 %$32,791 59 %
EMEA6,501 6 %5,302 10 %
Asia Pacific15,507 15 %17,246 31 %
Total revenue$101,948 100 %$55,339 100 %

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The following table sets forth the individual countries and their respective revenue for those countries whose revenue exceeded 10% of our total revenue:
 Three Months Ended March 31,
Country / Region20232022
United States / Americas$78,186 $31,967 
Japan / Asia Pacific$