SPRINGBIG HOLDINGS, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

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SpringLarge“, “the company”, “we”, “us” or “our” refers to SpringBig Holdings, Inc. and its subsidiaries, unless the context otherwise requires.

Forward-looking statements

All statements other than statements of historical facts contained in this
report, including statements regarding future operations, are forward-looking
statements. In some cases, forward-looking statements may be identified by words
such as "believe," "may," "will," "estimate," "continue," "anticipate,"
"intend," "could," "would," "expect," "objective," "plan," "potential," "seek,"
"grow," "target," "if," and similar expressions intended to identify
forward-looking statements. We have based these forward-looking statements
largely on our current expectations and projections about future events and
trends that we believe may affect our financial condition, results of
operations, business strategy, short-term and long-term business operations,
objectives, and financial needs. Our actual results could differ materially from
those anticipated due to various factors discussed under "Risk Factors" in this
Quarterly Report on Form 10-Q.

Company overview

SpringBig Holdings, Inc. (the "Company" or "SpringBig") is a market-leading
software platform providing customer loyalty and marketing automation solutions
to retailers and brands. We have leveraged our deep expertise in loyalty
marketing to develop solutions that address the key challenges faced by
retailers and brands, including those in the cannabis industry. Stringent,
complex, and rapidly evolving regulations have resulted in restricted access to
traditional marketing and advertising channels for cannabis retailers and
brands, preventing them from utilizing many traditional methods for effectively
accessing and engaging with consumers. In addition, the lack of
industry-specific data and market intelligence solutions limit cannabis
retailers' and brands' ability to efficiently market their products, thereby
hindering their growth. Our platform enables our clients to increase brand
awareness, engage customers, improve retention, and access actionable consumer
feedback data to improve marketing. Our clients can use our loyalty marketing,
digital communications, and text/email marketing solutions to drive new customer
acquisition, customer spend and retail foot traffic. Our proven
business-to-business-to-customer ("B2B2C") software platform creates powerful
network effects between retailers and brands and provides an ability for both to
connect directly with consumers. As retailers and brand scale, a virtuous cycle
amplifies growth, ultimately expanding SpringBig's reach and strengthening our
value proposition.

SpringBig serves approximately 1,390 brand and retailer clients across more than
2,800 distinct retail locations in North America. Our clients distribute more
than 2.0 billion messages annually, and in the last year more than $7.3 billion
of gross merchandise value was accounted for by clients utilizing our platform.

Business combinations and public company costs

On June 14, 2022, SpringBig Holdings, Inc., a Delaware corporation (formerly
known as Tuatara Capital Acquisition Corporation ("Tuatara" or "TCAC")),
consummated the previously announced business combination of Tuatara and
SpringBig, Inc. ("Legacy SpringBig"), a Delaware corporation. Pursuant to the
merger agreement, prior to the closing of the business combination, Tuatara
changed its jurisdiction of incorporation by deregistering as a Cayman Islands
exempted company and continuing and domesticating as a corporation incorporated
under the laws of the State of Delaware. Prior to the closing date, and in
connection with the Closing, Tuatara changed its name to SpringBig Holdings,
Inc. Legacy SpringBig was deemed to be the accounting acquirer in the business
combination based on an analysis of the criteria outlined in Accounting
Standards Codification 805. While Tuatara was the legal acquirer in the business
combination, because Legacy SpringBig was deemed the accounting acquirer, the
historical financial statements of Legacy SpringBig became the historical
financial statements of the combined company, upon the Closing.

The business combination was accounted for as a "reverse recapitalization". A
reverse recapitalization does not result in a new basis of accounting, and the
financial statements of the combined entity represent the continuation of the
financial statements of Legacy SpringBig in many respects. Under this method of
accounting, Tuatara was treated as the "acquired" company for financial
reporting purposes. For accounting purposes, Legacy SpringBig was deemed to be
the accounting acquirer in the transaction and, consequently, the transaction
was treated as a recapitalization of Legacy SpringBig (i.e., a capital
transaction involving the issuance of stock by Tuatara for stock of Legacy
SpringBig). Accordingly, the consolidated assets, liabilities and results of
operations of Legacy SpringBig became the historical financial statements of the
combined company, and Tuatara's assets, liabilities and results of operations
were consolidated with Legacy SpringBig beginning on the acquisition date.
Operations prior to the business combination are presented as those of Legacy
SpringBig. The net assets of Tuatara were recognized at historical cost (which
are consistent with carrying value), with no goodwill or other intangible assets
recorded.

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As a consequence of the business combination, Legacy SpringBig became the
successor to an SEC-registered and Nasdaq-listed company, which requires us to
incur additional expenses and implement procedures and processes to address
public company regulatory requirements and customary practices. We have and
expect to continue to incur additional annual expenses as a public company for,
amongst other things, directors' and officers' liability insurance, director
fees and additional internal and external accounting, legal and administrative
resources, including increased audit and legal fees.

Main operational and financial indicators

We monitor the following key financial and operational metrics to evaluate our
business, measure our performance, identify trends affecting our business,
formulate business plans, and make strategic decisions. The following is our
analysis for the three and nine months ended September 30, 2022 and 2021, in
thousands:

                                                    Three Months Ended September 30,             Nine Months Ended September 30,
                                                         2022                  2021                  2022                   2021
Revenue                                           $        7,456           $   6,121          $        20,404           $  17,028
Net loss                                                  (3,059)               (658)                  (8,535)             (3,230)
Adjusted EBITDA                                           (3,490)             (1,207)                  (9,634)             (3,531)

Number of retail clients                                   1,390                 850                    1,390                 850
Net revenue retention                                        119   %              85  %                   119   %              85  %
Number of messages (million)                                 586                 485                    1,501               1,336



For a reconciliation of net loss to adjusted EBITDA, see “EBITDA and Adjusted EBITDA”, below.

Revenue

We generate revenue from the sale of monthly subscriptions that provide retail
clients with access to an integrated platform through which they can manage
loyalty programs and communications with their consumers. We also generate
additional revenue from these retail clients when the quantum of messages sent
to consumers exceeds the amounts in the subscription package. The subscriptions
generally have twelve-month terms (which typically are not subject to early
termination without a cancellation fee payable by the client), are payable
monthly, and automatically renew for subsequent and recurring 12-month periods
unless notice of cancellation is provided in advance.

The Company's revenue growth is generally achieved through a mix of new clients,
clients upgrading their subscriptions (as new clients will frequently enter into
a relatively low level of subscription (with respect to the size of such
client's database and the number of their customers on such database) and/or the
number of pre-determined communication credits), which frequently occurs shortly
after such a client initially becomes a client, and the excess use element of
revenues. "Excess use" revenues are revenues derived from amounts charged to
clients for exceeding the pre-determined credit volume set forth in the
applicable client's subscription agreement. Given this combination, and
particularly the tendency for clients to upgrade soon after becoming a client,
the Company does not actively monitor revenue split between new and existing
clients, preferring to use the split between subscription and excess use in
combination with net dollar retention and the number of clients as key metrics,
as described below.

Other Key Operating Parameters

The growth in our revenues is a key metric at this stage in our development as a
Company and therefore to provide investors with additional information, we have
disclosed in the table above the number of our retail clients, our net revenue
retention rate and the number of standardized messages distributed through the
SpringBig platform by our clients. We regularly review the key operating and
financial metrics set forth above to evaluate our business, our growth, assess
our performance and make decisions regarding our business. We believe these key
metrics are useful to investors both because they allow for greater transparency
with respect to key metrics used by management in its financial and operational
decision-making, and they may be helpful in evaluating the state and growth of
our business.

Number of Retail Clients. We disclose in the table above the number of clients
of the business at the end of the relevant period. We view the number of clients
as an important metric to assess the performance of our business because an
increased number of clients drives growth, increases brand awareness and helps
contribute to our reach and strengthening our value proposition.
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Net Revenue Retention. We believe that the growth in the use of our platform by
our clients is an important metric in evaluating our business and growth. We
monitor our dollar-based net revenue retention rate on a rolling basis to track
the maintenance of revenue and revenue-increasing activity growth. "Net revenue
retention rate" (also referred to as "net dollar retention rate") does not have
a standardized meaning and is therefore unlikely to be comparable to similarly
titled measures presented by other companies, and further, investors should not
consider it in isolation. When evaluating our retention rates and calculating
our net revenue retention rate, SpringBig calculates the average recurring
monthly revenue from retail clients, adjusted for losses, increases and
decreases in monthly subscriptions during the prior twelve months divided by the
average recurring monthly subscription revenue over the same trailing
twelve-month period.

We view a net revenue retention rate exceeding 100% as positive because this is
indicative of increasing subscription revenue without including the impact of
the initial recurring revenue from new clients during the month in which they
are on-boarded. We believe that we can drive this metric by continuing to focus
on existing clients and by revenue-increasing activities, such as client
upgrades. Net revenue retention is measured over the twelve-month period ending
at the reporting date and if the ratio exceeds 100% this is an indication of
upgrades from clients exceeding the value of any lost clients and downgrades in
subscriptions. The net revenue retention is calculated based on subscription
revenues only and does not include the impact of excess use revenue.

Number of Messages Sent. We believe that the volume of messages sent, measured
in standardized message size, is important as it indicates the frequency of use
and level of engagement of our platform by our clients.

EBITDA and Adjusted EBITDA

To provide investors with additional information regarding our financial
results, we have disclosed EBITDA, which is a non-GAAP financial measure that we
calculate as net income before interest, taxes, depreciation and amortization
and Adjusted EBITDA, which represents EBITDA adjusted for certain unusual or
infrequent items (such as changes in the fair value of warrants).

We present EBITDA and Adjusted EBITDA because they are key measures used by our
management and board of directors to evaluate our operating performance,
generate future operating plans and make strategic decisions regarding the
allocation of investment capacity. Accordingly, we believe that EBITDA and
Adjusted EBITDA provide useful information to investors and others in
understanding and evaluating our operating results in the same manner as our
management and board of directors, and is widely used by analysts, investors and
competitors to measure a company's operating performance.

EBITDA and Adjusted EBITDA have limitations, and you should not consider these
in isolation or as a substitute for analysis of our results as reported under
GAAP, including net loss, which we consider to be the most directly comparable
GAAP financial measure. Some of these limitations are:

•although depreciation is a non-cash charge, the assets being depreciated may
have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA
reflect cash capital expenditure requirements for such replacements or for new
capital expenditure requirements;
•EBITDA and Adjusted EBITDA do not reflect interest payments that may represent
a reduction in cash available;
•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for,
our working capital needs; and
•EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a
reduction in cash available.

Because of these limitations, you should consider EBITDA and Adjusted EBITDA
alongside other financial performance measures, including net loss and our other
GAAP results.













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A reconciliation of net loss before tax to non-GAAP EBITDA and adjusted EBITDA is as follows (in thousands):

                                                                                         Nine Months Ended September
                                                 Three Months Ended September 30,                    30,
                                                     2022                2021               2022              2021
Net loss                                         $   (3,059)         $    (658)         $  (8,535)         $ (3,230)
Interest income                                          (7)                (1)                (7)               (3)
Interest expense                                        320                  5                632                 6
Depreciation expense                                     67                 50                191                62

EBITDA                                               (2,679)              (604)            (7,719)           (3,165)

Stock based compensation*                                 -                178              1,226               415
PPP Loan Forgiveness                                      -               (781)                 -              (781)
Business combination related bonus                        -                  -                550                 -
Change in fair value of warrants                       (811)                 -             (3,691)                -

Adjusted EBITDA                                  $   (3,490)         $  (1,207)         $  (9,634)         $ (3,531)

*Stock-based compensation is recorded in general and administrative expenses

Factors affecting our performance

Global Economic Trends

The overall economic environment and related changes to consumer behavior have a
significant impact on our business. Overall, positive conditions in the broader
economy promote consumer spending on marketplaces and our customers' products,
while economic weakness, which generally results in reduced consumer spending,
may have a negative impact on our customers' sales, which in turn may impact our
revenue.

Customer growth and retention

Our revenue grows primarily through acquiring and retaining customers and
expanding relationships with customers over time, increasing the revenue per
customer. We have historically been able to attract, retain and grow
relationships with customers as a result of the Company's comprehensive product
suite, differentiated loyalty programs, consistent communications with
customers, and reliable customer service.

Regulation and maturation of cannabis markets

We believe that we will have significant opportunities for growth as more
jurisdictions legalize cannabis for medical and/or adult use and the regulatory
environment continues to develop. We intend to explore new expansion
opportunities as additional jurisdictions legalize cannabis for medical or adult
use and leverage our existing business model to enter new markets. We believe
our understanding of the space coupled with our experienced sales force will
enable us to quickly enter and execute in new markets and capture new business,
which we sustain via our best-in-class product offerings. Further, a change in
U.S. federal regulations could result in our ability to engage in additional
outlets, including the fintech, payments and e-commerce space.

We expect competition to intensify in the future as the regulatory regime for
cannabis becomes more settled and the legal market for cannabis becomes more
accepted, which may encourage new participants to enter the market, including
established companies with substantially greater financial, technical and other
resources than existing market participants.

We believe that maintaining and enhancing our brand identity and our reputation
is critical to maintaining and growing our relationships with customers and to
our ability to attract new customers.

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We believe our platform's scale and strong customer loyalty market themselves;
however, we implement a variety of marketing efforts to attract retailers and
brands not yet on our platform. Marketing efforts include multiple strategies
designed to attract and retain both retail and brands subscribers.

Negative publicity, whether or not justified, relating to events or activities
attributed to us, our employees, customers or others associated with any of
these parties, may tarnish our reputation and reduce the value of our brand.
Given our high visibility, we may be more susceptible to the risk of negative
publicity. Damage to our reputation and loss of brand equity may reduce demand
for our platform and have an adverse effect on our business, operating results
and financial condition. Moreover, any attempts to rebuild our reputation and
restore value of our brand may be costly and time consuming, and such efforts
may not ultimately be successful.

We also believe that the importance of our brand recognition and reputation will
continue to increase as competition in our market continues to develop. If our
brand promotion activities are not successful, our operating results and growth
may be adversely impacted.

Components of our operating results

Revenue

SpringBig provides its retail customers with access to an integrated platform
that provides all the functions of the Company's proprietary software, which
uses proprietary technology to send text or email messages to the customer's
contacts. This access is provided to customers under a contract, with revenue
generated from monthly fixed fees for credits (up to pre-contracted amount) and
optional purchases of additional credits.

Revenue cost

Cost of revenue primarily includes amounts payable to message distributors on behalf of the Company’s customers over cellular networks and integrations.

Sales, maintenance and marketing expenses

Sales, service and marketing expenses include salaries, benefits, travel expenses and incentive compensation for our sales, service and marketing employees. In addition, sales, service, and marketing expenses include business acquisition marketing, event cost, and branding and advertising costs.

Technology and software development expenses

Technology and software development costs consist of salaries and benefits for
employees, including engineering and technical teams who are responsible for
building new products, as well as maintaining and improving existing products.
We capitalize certain costs associated with technology and software development
in accordance with ACS 350-40, Intangibles - Goodwill and Other - Internal Use
Software, but these are limited in quantum as we are constantly and regularly
making enhancements to our technology platform and do not consider appropriate
to be capitalized. Capitalized costs are generally amortized over a three-year
period commencing on the date that the specific software product is placed in
service. We believe that continued investment in our platform is important for
our growth.

General and administrative expenses

General and administrative expenses consist primarily of payroll and related
benefits costs for our employees involved in general corporate functions
including finance, human resources and investor relations, as well as costs
associated with the use by these functions of software and equipment. All rent,
insurance and other occupancy costs are also included in general and
administrative expenses as are professional and outside services related to
legal, audit and other services.








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Operating results

Comparison of the three months ended September 30, 2022 compared to the three months ended September 30, 2021

The following tables present our results of operations for the periods indicated:

Three months completed September 30,

                                                                                                Increase
                                                         2022                 2021             (decrease)               %
                                                                         (in thousands)
Revenue                                             $      7,456          $   6,121          $      1,335                22  %
Cost of revenue                                            1,912              1,560                   352                23  %
Gross profit                                               5,544              4,561                   983                22  %
Operating expenses:
Selling, servicing and marketing                           3,075              2,570                   505                20  %
Technology and software development                        2,811              1,916                   895                47  %
General and administrative                                 3,215              1,510                 1,705               113  %

Total operating expenses                                   9,101              5,996                 3,105                52  %
Loss from operations                                      (3,557)            (1,435)               (2,122)              148  %
Interest income                                                7                  1                     6                   nm
Interest expense                                            (320)                (5)                 (315)                  nm
Forgiveness of PPP Loan                                        -                781                  (781)                  nm
Change in fair value of warrants                             811                  -                   811                   nm
Loss before taxes                                         (3,059)              (658)               (2,401)              365  %
Provision for income taxes                                     -                  -                     -                 -
Loss after taxes                                    $     (3,059)         $    (658)         $     (2,401)              365  %


nm-not meaningful
Revenues. Revenues increased $1.3 million for the three months ended September
30, 2022, representing a 22% increase compared with the same period in 2021. Our
subscription revenue was $5.4 million for the three months ended September 30,
2022 compared with $3.6 million in the same quarter in 2021, representing 48%
year over year growth. The excess use revenue declined by 24% year over year due
to the weaker economy and the fact that some excess use revenue in the
comparable prior period had converted into recurring subscription revenues due
to clients upgrading their subscriptions. Our revenue from Brands clients
increased by 61% year over year and was $267,000 in the three months ended
September 30, 2022, as compared to $166,000 for the three months ended September
30, 2021.

The Company's net revenue retention rate was 119% for the three months ended
September 30, 2022, an increase from our net revenue retention rate of 85% for
the same period in 2021, with the ratio continuing to exceed our target of 100%
as a result of subscription upgrades and growth exceeding the value of lost and
downgraded subscriptions.

Gross Profit. Gross profit increased to $5.5 million for the three months ended
September 30, 2022 from $4.6 million for the three months ended September 30,
2021, representing a 22% increase. The cost of revenue increased by $0.4
million, representing a 23% increase over the three months ended September 30,
2021. The increase was primarily due to the increasing volume of communication
messages distributed by clients, with a total of approximately 586 million
messages in the quarter ending September 30, 2022, which constitutes an increase
of 101 million messages, or 17% higher than in the same period last year. Our
gross margin percentage remains reasonably consistent at 74.5% for the quarter
ended September 30, 2022 as compared to 74.4% for the same period in 2021.

Operating Expenses. Our operating expenses increased by $3.1 million, or 52%,
for the three months ended September 30, 2022 compared with the same period in
2021.

Selling, servicing and marketing expenses increased by $0.5 million, or 20%, for
the quarter ended September 30, 2022, compared to the same period in 2021. As we
continue to scale the business, we have continued to increase the scale of our
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sales, service and marketing operations, and in particular grew the number of
employees in our Toronto office and in our client support organization when
comparing the quarter ending September 30, 2022 with the same three months in
the prior year.

Technology and software development expenses increased by $0.9 million, or 47%,
for the quarter ended September 30, 2022, compared to the same period in 2021,
with the increase being attributable to higher headcount primarily through using
offshore contract engineering resources to enable an acceleration in the pace of
developing and enhancing our software platform.

General and administrative expenses increased by $1.7 million, or 115%, for the
quarter ended September 30, 2022, compared to the same period in 2021 due to
additional rent expense, including the expansion of our office in Toronto,
higher personnel-related costs as we increased headcount, and additional
expenses related to preparing for and becoming a publicly listed company,
specifically relating to legal, accounting and auditing fees, and directors' and
officers' liability insurance premiums. We incurred expenses related to being a
publicly listed company of approximately $1.2 million for the three months ended
September 30, 2022.

Interest charges. Interest charges were $0.3 million for the quarter ended
September 30, 2022 due to the interest payable on the 6.0% convertible bonds issued as part of the merger carried out on June 14, 2022.

Change in fair value of warrants. The liability relating to warrants issued by
SpringBig is included on the balance sheet at the fair value prevailing at the
end of the accounting period and any change in value is reported in the income
statement. As at September 30, 2022, the market value of the public warrants,
which are listed on the Nasdaq stock exchange was $0.0503 per warrant compared
with $0.1012 at June 30, 2022. The reduction in and the resulting change in
value since the the quarter ending June 30, 2022 was $0.8 million.

Comparison of the nine months ended September 30, 2022 and nine months ended
September 30, 2021

The following tables present our results of operations for the periods indicated:

Nine month period ended September 30,

                                                                                                    Increase
                                                           2022                   2021             (decrease)               %
                                                                           (in thousands)
Revenue                                             $    20,404               $  17,028          $      3,376                20  %
Cost of revenue                                           5,754                   4,913                   841                17  %
Gross profit                                             14,650                  12,115                 2,535                21  %
Operating expenses:
Selling, servicing and marketing                          9,103                   6,993                 2,110                30  %
Technology and software development                       8,358                   4,747                 3,611                76  %
General and administrative                                8,790                   4,383                 4,407               101  %

Total operating expenses                                 26,251                  16,123                10,128                63  %
Loss from operations                                    (11,601)                 (4,008)               (7,593)              189  %
Interest income                                               7                       3                     4                   nm
Interest expense                                           (632)                     (6)                 (626)                  nm
Forgiveness of PPP loan                                       -                     781                  (781)                  nm
Change in fair value of warrants                          3,691                       -                 3,691                   nm
Loss before taxes                                        (8,535)                 (3,230)               (5,305)              164  %
Provision for income taxes                                    -                       -                     -                 -
Loss after taxes                                    $    (8,535)              $  (3,230)         $     (5,305)              164  %


nm - not meaningful

Revenues. Revenues increased by $3.4 million for the nine months ended September
30, 2022, representing a 20% increase compared with the same period in 2021. Our
subscription revenue was $15.2 million for the nine months ended September 30,
2022 compared with $10.6 million in the same period in 2021, representing 40%
year over year growth. The excess use revenue declined by 22% year over year due
to the weaker economy and the fact that some prior year excess use revenue has
now converted into recurring subscription revenues due to clients upgrading
their subscriptions. Our revenue from brands clients
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grew 56% year over year and was $704,000 in the nine months ended
September 30, 2022compared to $450,000 for the nine months ended September 30, 2021.

Gross Profit. Gross profit increased to $14.7 million for the nine months ended
September 30, 2022 from $12.1 million for nine months ended September 30, 2021,
representing a 21% increase. The cost of revenue increased by $841,000,
representing an 17% increase, for the nine months ended September 30, 2022. The
increase was primarily due to the increasing volume of communication messages
distributed by clients, with a total of approximately 1.50 billion messages
during the nine months ended September 30, 2022, representing an increase of
165 million, or 12% higher, than in the same period last year. The percentage
increase in cost of revenue is lower than our revenue growth over the same
period and therefore our gross margin percentage increased by 0.7% compared with
the same period in 2021 to 71.8% for the nine months ended September 30, 2022.

Operating Expenses. SpringBig continues to prioritize revenue growth while
ensuring expenses are managed in an appropriate manner to ensure we are able to
handle the growth with appropriate personnel, infrastructure, and processes and
also ensuring net loss is maintained within an acceptable range.

Our operating expenses increased by $10.1 millionor 63%, for the nine months ended September 30, 2022 compared to the same period in 2021.

Selling, servicing, and marketing expenses increased by $2.1 million, or 30%,
for the nine months ended September 30, 2022, compared to the same period in
2021. As we continue to scale the business, we continue to increase the scale of
our sales, service, and marketing operations, in particular we grew the number
of employees in our Toronto office and in our client support organization when
comparing the nine months ended September 30, 2022 with the same period in 2021.

Technology and software development expenses increased by $3.6 million, or 76%,
for nine months ended September 30, 2022, compared to the same period in 2021,
with the increase being attributable to higher headcount primarily through using
offshore contract engineering resources to enable an acceleration in the pace of
developing and enhancing our software platform.

General and administrative expenses increased by $4.4 million, or 101%, for the
nine months ended September 30, 2022, compared to the same period in 2021 due to
additional rent expense, including the expansion of our office in Toronto,
higher personnel-related costs as we increased headcount and additional expenses
related to preparing for and becoming a publicly listed company, specifically
relating to legal, accounting and auditing fees, and directors' and officers'
liability insurance premiums..

Stock based compenstation. Compensation expense recorded in connection with the
Legacy Incentive Plan was $1.2 million and $415,000 for the nine months ended
September 30, 2022, which are included in administrative expense on the
statements of operations.

Interest Income (Expense). Interest expense was $632,000 for the nine months
ended September 30, 2022 due to interest on the 15% Convertible Notes and the
6.0% Convertible Notes issued in connection with the the merger consummated on
June 14, 2022. Interest expense was immaterial for the nine months ended
September 30, 2021.

Change in fair value of warrants. The liability relating to warrants issued by
SpringBig is included on the balance sheet at the fair value prevailing at the
end of the accounting period and any change in value is reported in the income
statement. As at September 30, 2022, the market value of the public warrants,
which are listed on the Nasdaq stock exchange was $0.0503 per warrant. These
warrants were not issued as of December 31, 2021, but were recorded in
connection with the accounting related to the June 14, 2022 merger. As of the
merger date, the fair value per warrant was $0.2810. The liability relating to
warrants issued by SpringBig is included on the balance sheet at the fair value
prevailing at the end of the accounting period. During the nine months ended
September 30, 2022, $3.7 million of gain related to the change in value of the
warrants is reported in the income statement.

Cash and capital resources

We have incurred net losses since inception, and experienced negative cash flows
from operations. Prior to the business combination, we financed our operations
and capital expenditures primarily through the private sales of equity
securities and revenue. Our primary uses of cash in the short-term are to fund
our operations as we continue to grow our business.

In connection with the execution of the merger agreement in November 2021,
Legacy SpringBig and TCAC entered into subscription agreements, pursuant to
which certain investors (the "PIPE Investors") agreed to purchase an aggregate
of 1,310,000 shares of common stock of the combined company, for $10.00 per
share, for an aggregate purchase price of $13,100,000. On February 25, 2022,
SpringBig entered into convertible notes (the "Convertible Notes") with certain
of the
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PIPE Investors for a principal sum of $7.0 million in aggregate. On the closing
of the merger, the outstanding principal balance of the Convertible Notes became
due and payable and was satisfied, along with the interest due on such notes, by
the issuance to holders of such notes shares of the Company's common stock and
the remainder of the investment from the PIPE Investors was funded and paid to
the Company.

Additionally, following the execution of the merger agreement, we entered into
two incremental financing agreements. An institutional investor through a
securities purchase agreement agreed to purchase $11.0 million of 6.0% Senior
Secured Original Issue Discount Convertible Notes due in 2024 and a number of
warrants equal to one-half of the principal amount of notes divided by the
volume weighted average price on the trading day prior to closing. This
financing closed immediately after the business combination.

The Company also entered into a committed equity line facility (the "Facility")
with CF Principal Investments, LLC ("Cantor") for up to $50.0 million in
aggregate gross purchase price of newly issued shares of our common stock after
the closing of the business combination. In connection with the Facility, the
Company incurred a $1.5 million commitment fee which it settled in exchange for
877,193 shares of common stock.

The Company may, from time to time at its option, sell to Cantor newly issued
shares of common stock pursuant to the terms of the Facility. The use of the
Facility under the agreement with Cantor is subject to certain conditions,
including the effectiveness of a registration statement relating to the resale
of the common stock issuable under the Facility. Therefore, funds from the
$50.0 million gross purchase price will not be immediately available, if at all,
to SpringBig, and there can be no assurances that the Facility will be available
to the Company at all times during its terms or that such purchase price will
ever become available.

The following table summarizes our cash, accounts receivable and working capital as of September 30, 2022 and December 31, 2021 (in thousands):

                                  September 30, 2022       December 31, 2021
Cash and cash equivalents        $             6,806      $            2,227
Accounts receivable, net                       4,727                   3,045
Working capital                               10,212                   3,979



We believe that the balance of cash, which was $6.8 million as of September 30,
2022, will be sufficient to satisfy our operating cash requirements over the
next twelve months and beyond. This estimate is based on our current business
plan and expectations and assumptions in light of current macroeconomic
conditions. We have based these estimates on assumptions that may prove to be
wrong and could use our available capital resources sooner than we currently
expect, and future capital requirements and the adequacy of available funds will
depend on many factors, including those described in the section entitled "Risk
Factors" in the Quarterly Report on Form 10-Q for Q2 2022. Although we are not
currently a party to any agreement or letter of intent with respect to potential
investments in, or acquisitions of, complementary businesses, services or
technologies, we may enter into these types of arrangements in the future, which
could also require us to seek additional equity financing, incur indebtedness,
or use cash resources. We have no present understandings, commitments or
agreements to enter into any such acquisitions.

To the extent existing cash and investments and cash from operations are not
sufficient to fund future activities, we may need to raise additional funds. We
may seek to raise additional funds through equity, equity-linked, or debt
financings. If we raise additional funds by incurring indebtedness, such
indebtedness may have rights that are senior to holders of our equity securities
and could contain covenants that restrict operations. Any additional equity
financing may be dilutive to stockholders. Further, the Secured Convertible
Notes also contain a number of restrictive covenants that may impose significant
restrictions on obtaining future financings, including restrictions on
SpringBig's ability to do any of each following while the Secured Convertible
Notes remain outstanding: (i) incurring additional indebtedness and guaranteeing
indebtedness; (ii) incurring liens or allowing mortgages or other encumbrances;
(iii) prepaying, redeeming, or repurchasing certain other debt; (iv) paying
dividends or making other distributions or repurchasing or redeeming its capital
stock; (v) selling assets or entering into or effecting certain other
transactions (including a reorganization, consolidation, dissolution or similar
transaction or selling, leasing, licensing, transferring, or otherwise disposing
of assets of the Company or its subsidiaries); (vi) issuing additional equity
(outside of the equity facility, issuances under our equity compensation plan
and other limited exceptions until a resale registration statement registering
all of the common stock underlying the notes and warrants with the Investor is
declared effective by the SEC); (vii) entering into variable rate transactions
(exclusive of the equity facility); and (viii) adopting certain amendments to
our governing documents, among other restrictions. In addition, the noteholders
have the right, for 18 months following the first closing of the notes and
warrants with the Investor, to purchase up to 30% of the securities we may offer
in subsequent financings. Accordingly, we may be limited in our ability to raise
additional capital on acceptable terms or at all within such limitations. Such
restrictions may be waived by consent of the noteholder.
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