TABLE OF CONTENTS

As filed with the Securities and Exchange Commission on July 28, 2022
Registration No. 333-266010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SPRINGBIG HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
7371
88-2789488
(State or Other Jurisdiction of Incorporation or Organization)
(Primary Standard Industrial Classification Code Number)
(I.R.S. Employer
Identification Number)
621 NW 53rd Street
Suite 260
Boca Raton, Florida 33487
(800) 772-9172
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Jeffrey Harris
Chief Executive Officer
621 NW 53rd Street
Suite 260
Boca Raton, Florida 33487
(800) 772-9172
(Address, Including Zip Code, and Telephone Number, Including Area Code, of agent for service)
Copy to:
William E. Doran
Sarah M. Hesse
Benesch, Friedlander, Coplan & Aronoff LLP
71 South Wacker Drive, Suite 1600
Chicago, Illinois 60606
Telephone: (312) 212-4949
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-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-2of the Exchange Act.
Large accelerated filer
 
 
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
 
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 7(a)(2)(B) of the Securities Act.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF CONTENTS

The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling securityholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 28, 2022
graphic
4,510,940 Common Shares
This prospectus relates to the resale, from time to time, by the selling stockholder named herein (the “Selling Stockholder”) of (i) an aggregate of up to 2,750,000 shares of our common stock, par value $0.0001 per share (“Common Shares”), reserved for issuance upon the conversion of a convertible promissory note of SpringBig Holdings, Inc. (formerly known as Tuatara Capital Acquisition Corporation), a Delaware corporation (the “Company”) currently held by the Selling Stockholder (the “Conversion Shares”), and (ii) an aggregate of up to 1,760,940 Common Shares reserved for issuance upon exercise of warrants issued by the Company to the Selling Stockholder and warrants that may hereafter be issued by the Company to the Selling Stockholder (the “Warrant Shares”).
The Conversion Shares include 916,667 shares issuable upon conversion of an $11,000,000 principal amount convertible promissory note at the original conversion price of $12.00 per share, plus an additional 1,833,333 shares reserved for potential issuance in the event of default or dilution adjustments or repayment of the notes by the Company in shares at prevailing market prices. The Warrant Shares include 586,980 Common Shares issuable upon exercise of the warrants issued on the First Tranche Closing (defined below), and 1,173,960 additional shares reserved for potential issuance in the event of possible future default or dilution adjustments, at prevailing market prices. To the extent that Common Shares and/or Warrant Shares are issued by the Company under the terms of such notes and warrants, substantial amounts of Common Shares could be issued and resold, which would cause dilution and may impact the Company’s stock price. See “Risk Factors” and “L1 Capital Financing” for additional information.
The Company issued the note to the Selling Stockholder for $10,000,000 in total cash consideration and the warrants for no additional consideration. The Conversion Shares are issuable at an original conversion price of $12.00 per share based on the $11,000,000 principal amount of the note but represent a value of $10.90 per share based on the 916,667 shares issuable upon the conversion of the note for the $10,000,000 in cash consideration paid to the Company. While the warrants were issued for no additional consideration, they have a $12.00 exercise price, which is subject to anti-dilution adjustments and the issuance of shares under the notes are subject to adjustments for dilution and in the event of default.
We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of our Common Shares by the Selling Stockholder. However, we may receive proceeds from the cash exercise of the warrants, which, if exercised in cash at the current $12.00 exercise price with respect to 1,760,940 shares of common stock, would result in gross proceeds to us of approximately $21,131,280, assuming the exercise in full of all of the warrants. There is no assurance that the Selling Stockholder will elect to exercise any or all of such warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the warrants. We believe the likelihood that the Selling Stockholder will exercise the warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Selling Stockholder will be unlikely to exercise their warrants.
On June 14, 2022, we consummated the business combination in connection with that certain amended and restated agreement and plan of merger, dated as of April 14, 2022 (as amended by that certain amendment no. 1 dated May 4, 2022, the “merger agreement”), by and among Tuatara Capital Acquisition Corporation (“TCAC” or “Tuatara”), HighJump Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Tuatara (“Merger Sub”), and SpringBig, Inc., a Delaware corporation (“Legacy SpringBig”). Pursuant to the merger agreement, at the closing of the business combination, among other things, Merger Sub merged with and into Legacy SpringBig (the “Merger”), with Legacy SpringBig being the surviving entity of the Merger and Legacy SpringBig’s shareholders receiving Common Shares in exchange for their equity securities of Legacy SpringBig. In connection with the closing, the Company changed its name from “Tuatara Capital Acquisition Corporation” to “SpringBig Holdings, Inc.” As a result of the business combination and other actions taken in connection with the closing of the business combination, Legacy SpringBig became a wholly-owned subsidiary of the Company, with the securityholders of Legacy SpringBig becoming securityholders of the Company. See “Summary of the Prospectus—Background and Recent Developments”.
We are registering the resale of shares of Common Stock as required by the Registration Rights Agreement, dated as of June 14, 2022 (the “Registration Rights Agreement”), by and among the Company and the Selling Stockholder.
We will pay the expenses of registering the shares of common stock offered by this prospectus, but all selling and other expenses incurred by the Selling Stockholder will be paid by the Selling Stockholder. The Selling Stockholder may sell our Common Shares offered by this prospectus from time to time on terms to be determined at the time of sale through ordinary brokerage transactions or through any other means described in this prospectus under “Plan of Distribution.” The prices at which the Selling Stockholder may sell shares will be determined by the prevailing market price for our common stock or in negotiated transactions.
Our Common Shares are listed on The Nasdaq Global Market under the symbol “SBIG.” On July 27, 2022, the last reported sale price of our Common Shares was $1.68 per Common Share.
We are an “emerging growth company” under the federal securities laws and are subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 12 of this prospectus, and under similar headings in any amendment or supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is    , 2022.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-1 that we filed with the U.S. Securities and Exchange Commission (the “SEC”). You should read this prospectus and any prospectus supplements we may file carefully. Such documents contain important information you should consider when making your investment decision. See “Where You Can Find Additional Information” in this prospectus.
You should rely only on the information contained in this prospectus or in any prospectus supplements we may file. Neither we nor the selling stockholder named herein (the “Selling Stockholder”) have authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or in any prospectus supplements we may file. The information contained in this prospectus or in any prospectus supplements we may file is current only as of their respective dates or on the date or dates that are specified in those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
The Selling Stockholder is not offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. Neither we nor the Selling Stockholder have done anything that would permit this offering (the “Offering”) or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the jurisdiction of the United States who come into possession of this prospectus are required to inform themselves about and to observe any restrictions relating to this Offering and the distribution of this prospectus applicable to that jurisdiction.
We may authorize the Selling Stockholder to use one or more free writing prospectuses to be provided to you that may contain material information relating to that offering. We may also use a prospectus supplement and any related free writing prospectus to add, update or change any of the information contained in this prospectus. This prospectus, together with any applicable prospectus supplements and any related free writing prospectuses, includes all material information relating to this offering. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement.
Unless the context indicates otherwise, references in this prospectus to the “Company,” “SpringBig,” “we,” “us,” “our” and similar terms refer to SpringBig Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries.
Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information. In addition, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.


TABLE OF CONTENTS

FREQUENTLY USED TERMS
“amended and restated merger agreement” are to the amended and restated agreement and plan of merger, dated as of April 14, 2022, by and among Tuatara, Merger Sub and Legacy SpringBig, as amended by Amendment No. 1, dated as of May 4, 2022;
“amended and restated registration rights agreement” are to the Amended and Restated Registration Rights Agreement entered into, by and among Tuatara, Sponsor, Legacy SpringBig, and the other signatories thereto;
“business combination” are to the transactions contemplated by the merger agreement;
“Canadian CRTC” are to the Canadian Radio-Television and Telecommunications Commission;
“Cannabis Act” are to the Cannabis Act (Canada);
“Cantor Equity Financing” are to the Purchase Agreement and related registration rights agreement, each between Tuatara and CF Principal Investments LLC, related to a committed equity facility by which SpringBig has the right to sell to CF Principal Investments LLC up to $50,000,000 of newly issued common stock;
“Code” are to the Internal Revenue Code of 1986, as amended;
“Common Shares,” “Common Stock” or “Shares” are to the shares of common stock of SpringBig Holdings, Inc., par value $0.0001 per share;
“Company,” “SpringBig,” “we,” “us,” “our” and similar terms are to SpringBig Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries;
“COVID-19” are to SARS-Cov-2 or COVID-19, and any evolutions thereof or related or associated epidemics, pandemics or disease outbreaks;
“CSA” are to the U.S. Controlled Substances Act of 1970, as amended;
“DGCL” are to the Delaware General Corporation Law, as amended;
“effective time” are to the effective time of the certificate of merger effecting the merger contemplated by the amended and restated merger agreement;
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
“FCC” are to the United States Federal Communications Commission;
“GAAP” are to United States generally accepted accounting principles;
“Legacy SpringBig” are to SpringBig, Inc., a Delaware corporation, prior to the business combination, and a wholly-owned subsidiary of SpringBig following the business combination;
“merger” are to the merger evidenced by a certificate of merger between Merger Sub and Legacy SpringBig pursuant to which Merger Sub merged with and into Legacy SpringBig, with Legacy SpringBig continuing as the surviving entity and a subsidiary of SpringBig;
“merger agreement” are to the original merger agreement and the amended and restated merger agreement, collectively, as amended or modified from time to time, by and among Tuatara, Merger Sub and Legacy SpringBig;
“Merger Sub” are to HighJump Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Tuatara;
“Nasdaq” are to The Nasdaq Stock Market LLC;
“Notes and Warrants Purchase Agreement” are to that certain securities purchase agreement, dated April 29, 2022, between the Company and the purchaser party hereto, pursuant to which the Company agreed to sell up to (i) a total of up to $16 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 (the “Notes”) and (ii) a number of warrants equal to one-half of the principal of the Notes actually issued, divided by the volume weighted average price (“VWAP”) on the trading day prior to such Note issuance date (the “Warrants”), in a private placement;
“original merger agreement” are to the agreement and plan of merger, dated as of November 8, 2021, by and among Tuatara, Merger Sub and SpringBig;
ii

TABLE OF CONTENTS

“PIPE subscription financing” are to the aggregate $13,100,000 of proceeds from the issuance of the subscription shares;
“Purchase Agreement” are to the Purchase Agreement, dated as of April 29, 2022, by and between Tuatara and the Holder, as amended by Amendment No. 1, dated July 20, 2022;
“SaaS” are to software-as-a-service;
“Securities Act” are to the Securities Act of 1933, as amended;
“Sponsor” are to TCAC Sponsor, LLC a Delaware limited liability company;
“TCPA” are to the United States Telephone Consumer Protection Act of 1991, as amended;
“transfer agent” are to Continental Stock Transfer & Trust Company, as transfer agent;
“Tuatara,” “we,” “our” or “us” are to Tuatara Capital Acquisition Corporation, an exempted company incorporated under the laws of the Cayman Islands, the predecessor entity to SpringBig; and
“$,” “US$” and “U.S. dollar” each refer to the United States dollar.
iii

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “become,” “potential,” “predict,” “project,” “should,” “would,” “opportunity,” “mission,” “goal,” “positioned” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to:
trends in the cannabis industry and SpringBig’s market size, including with respect to the potential total addressable market in the industry;
SpringBig’s growth prospects;
new product and service offerings SpringBig may introduce in the future;
the price of SpringBig’s securities, including volatility resulting from changes in the competitive and highly regulated industry in which SpringBig operates and plans to operate, variations in performance across competitors, changes in laws and regulations affecting SpringBig’s business and changes in the combined capital structure;
the ability to implement business plans, forecasts, and other expectations as well as identify and realize additional opportunities; and
other risks and uncertainties indicated from time to time in filings made with the SEC.
These risks are not exhaustive. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, 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. Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. Except as required by law, we undertake no obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future.
iv

TABLE OF CONTENTS

SUMMARY OF THE PROSPECTUS
This summary highlights selected information appearing elsewhere in this prospectus. Because it is a summary, it may not contain all of the information that may be important to you. To understand this offering fully, you should read this entire prospectus, and the registration statement of which this prospectus is a part carefully, including the information set forth under the heading “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements.
Overview of the Company
SpringBig is a market-leading software platform providing customer loyalty and marketing automation solutions to cannabis retailers and brands in the U.S. and Canada. SpringBig’s platform connects consumers with retailers and brands, through SMS marketing, emails, customer feedback system, and loyalty programs, to support retailers’ and brands’ customer engagement and retention. SpringBig offers marketing automation solutions that provide for consistency of customer communication, which retailers and brands can use to drive customer retention and retail foot traffic. Additionally, SpringBig’s reporting and analytics offerings deliver valuable insights that clients utilize to better understand their customer base, purchasing habits and trends.
SpringBig’s services and products support cannabis retailers and brand marketing as described below:
Retail Offering
SpringBig’s platform offers retailers text message marketing, which allows clients to send promotions to existing customers. This text messaging platform offers a variety of features, including multiple customer segmentations, which automatically groups customers into segments based on their preferences and purchase behavior. Retailers also have access to the “autoconnects” feature, which allows them to easily leverage customer data and send messages directly to consumers based on certain actions and also includes functionality to help clients identify opportunities to send text messages. SpringBig also provides an e-signature app, designed to accommodate proper ‘double opt-in’ procedure, through both implied and expressed consent to facilitate compliance with the TCPA, FCC, and Canadian CRTC.
The consumer application (or wallet) offered by SpringBig allows customers to access and check their points, redeem rewards, and view upcoming offers. The wallet fully integrates with cannabis e-commerce providers, allowing customers to place orders directly from their wallet. Retailers can customize this application with a distinct icon, name, layout, and color scheme, thus allowing for brand consistency and a higher-quality and frictionless customer experience.
Retailers can use the SpringBig platform to compile marketing campaigns based on consumer profiles and preferences. Once a campaign launches, retailers are able to analyze in-depth data in order to measure campaign success. Enterprise Resource Planning (or ERP)-level customer data management and analysis also allow retailers to organize their sales funnel and provide a personalized, targeted approach to marketing campaigns.
SpringBig’s platform integrates with many point of sale (“POS”) systems used in the cannabis industry, allowing retailers to automatically collect additional data on consumers.
Brand Marketing Platform
SpringBig has a brand marketing platform that offers a direct-to-consumer marketing automation platform specifically for cannabis brands. This direct-to-consumer marketing engine allows brands to target and measure the complete transaction cycle from initial engagement through point of sale.
SpringBig provides brands with the opportunity to provide content that, in turn, SpringBig’s retail clients can utilize in their targeted consumer marketing campaigns. This provides the brand with access to the consumer and that can be leveraged through the brand and retailer cooperating in a promotional campaign on the SpringBig platform. The SpringBig platform can be used by brands to increase their brand awareness, expand retail partnerships, and acquire and retain new customers. The SpringBig brands platform also provides brand clients with access to detailed reports regarding campaign attribution metrics.
1

TABLE OF CONTENTS

Background and Recent Developments
Consummation of the Business Combination
On June 14, 2022, SpringBig Holdings, Inc., a Delaware corporation (formerly known as Tuatara Capital Acquisition Corporation (“Tuatara’’)), consummated the previously announced business combination of Tuatara and SpringBig, Inc., a Delaware corporation. Pursuant to the merger agreement, prior to the closing of the business combination (the “Closing”), 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 (the “Domestication”). In connection with the Closing, the registrant changed its name from Tuatara Capital Acquisition Corporation to “SpringBig Holdings, Inc.”
Holders of an aggregate of 19,123,806 Class A ordinary shares of Tuatara sold in its initial public offering (the “IPO”) (such shares, the “Public Shares”) properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from Tuatara’s IPO, which was approximately $10.01 per share, or $191,437,817 in the aggregate. The holders that did not elect to have their shares redeemed received, following the Domestication, their respective pro rata share of the lesser of (x) the number of shares of common stock that did not elect to redeem and (y) 1,000,000 shares of common stock, which amounted to 876,194 shares of common stock that were allocated to such non-redeeming holders.
Immediately after giving effect to the business combination, the following equity securities of SpringBig were issued and outstanding: (i) 5,752,388 Common Shares issued to the holders of Tuatara Class A ordinary shares and Tuatara Class B ordinary shares that automatically converted into Tuatara Class A ordinary shares upon the occurrence of the business combination in accordance with Tuatara’s amended and restated memorandum and articles of association as consideration in the business combination (comprised of 1,752,388 Class A ordinary shares after giving effect to the redemptions and the issuance of shares to public shareholders who did not elect to redeem their public shares and 4,000,000 Class B ordinary shares that converted into common stock), (ii) 18,196,526 shares of Common Shares issued to the stockholders of Legacy SpringBig as consideration in the business combination, (iii) 10,000,000 warrants to purchase Common Shares issued to holders of the Public Shares upon conversion of warrants to purchase Tuatara Class A ordinary shares in connection with the business combination (each, a “SpringBig Public Warrant”), (iv) 6,000,000 warrants to purchase Common Shares issued to Sponsor upon conversion of warrants to purchase Tuatara Class A Common Stock, and (v) 1,310,000 shares of Common Shares issued to certain investors pursuant to a subscription to acquire such shares, plus 31,356 shares paid to certain of those investors as interest payments pursuant to the convertible notes with such investors. After the Closing Date, Tuatara’s Class A ordinary shares, warrants and units ceased trading on The Nasdaq Capital Market. Common Shares and SpringBig Public Warrants commenced trading on The Nasdaq Global Market under the symbols “SBIG” and “SBIGW,” respectively, on June 15, 2022.
SpringBig is continuing the existing business operations of Legacy SpringBig as a publicly traded company.
Incremental Financings
Cantor Equity Financing
On April 29, 2022, Tuatara entered into a Purchase Agreement, as amended by Amendment No. 1, dated July 20, 2022 (together, the “Purchase Agreement”) with CF Principal Investments LLC related to a committed equity facility (the “Facility”). Pursuant to the Purchase Agreement, SpringBig has the right, from time to time at its option to sell to CF Principal Investments LLC up to $50 million in aggregate gross purchase price of newly issued common stock since the closing of the business combination subject to certain conditions and limitations set forth in the Purchase Agreement. While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis outside the context of a traditional underwritten follow-on offering.
Sales of shares of SpringBig’s common stock to CF Principal Investments LLC under the Purchase Agreement, and the timing of any sales, will be determined by SpringBig from time to time in its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the common stock and determinations by SpringBig regarding the use of proceeds of such common stock, and will be subject to the conditions set forth in the Purchase Agreement. The net proceeds from any sales under the Purchase Agreement will depend on the frequency with, and prices at, which the shares of common stock are sold to CF Principal Investments LLC. SpringBig expects to use the proceeds from any sales under the Purchase Agreement for working capital and general corporate purposes, including servicing our ongoing debt obligations under the Notes.
2

TABLE OF CONTENTS

Upon the initial satisfaction of the conditions to CF Principal Investments LLC’s obligation to purchase common stock set forth in the Purchase Agreement (the “Commencement”), including that a registration statement registering the resale by CF Principal Investments LLC of the common stock under the Securities Act, purchased pursuant to the Purchase Agreement (the “Cantor Resale Registration Statement”) is declared effective by the SEC, a final prospectus relating thereto is filed with the SEC, and subject to certain ongoing conditions, SpringBig will have the right, but not the obligation, from time to time at its sole discretion until no later than the first day of the month next following the 36-month period from and after the date that the Cantor Resale Registration Statement is declared effective, to direct CF Principal Investments LLC to purchase up to a specified maximum amount of common stock as set forth in the Purchase Agreement by delivering written notice to CF Principal Investments LLC prior to the commencement of trading on any trading day. The purchase price of the common stock that SpringBig elects to sell to CF Principal Investments LLC pursuant to the Purchase Agreement will be 97% of the VWAP of the common stock during the applicable purchase date on which SpringBig has timely delivered written notice to CF Principal Investments LLC directing it to purchase common stock under the Purchase Agreement; accordingly, the purchase price per share that CF Principal Investments LLC will pay for the Common Shares purchased from us under the Purchase Agreement will fluctuate based on the market price of our Common Shares at the time we elect to sell shares to Cantor.
In connection with the execution of the Purchase Agreement, SpringBig agreed to issue a number of shares of common stock equal to the quotient obtained by dividing (i) $1,500,000 and (ii) the VWAP over the five trading days immediately preceding the filing of the Cantor Resale Registration Statement to CF Principal Investments LLC as consideration for its irrevocable commitment to purchase the common stock upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement. In addition, pursuant to the Purchase Agreement, SpringBig has agreed to reimburse CF Principal Investments LLC for certain expenses incurred in connection with the Facility. Issuances of common stock under the Purchase Agreement are subject to a beneficial ownership “blocker” provision, preventing issuances of common stock resulting in ownership in excess of 8% beneficial ownership of shares of SpringBig’s common stock by CF Principal Investments LLC and its affiliates. The Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations by each party. The use of the Facility is subject to certain conditions, including the effectiveness of the Cantor Resale Registration Statement. Therefore, funds from the $50 million gross purchase price will not be immediately available to SpringBig upon the business combination, and there can be no assurances that such purchase price will ever become available.
The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of the Purchase Agreement and as of specific dates, were solely for benefit of the parties to such agreement and are subject to certain important limitations. SpringBig has the right to terminate the Purchase Agreement at any time after the Commencement, at no cost or penalty upon 10 trading days’ prior written notice.
Although SpringBig cannot predict the number of shares of common stock that will actually be issued in connection with any sales under the Facility, it is possible that such issuances may result in large numbers of shares being sold. For example, if the Facility is used in its entirety for $50 million, the number of shares to be issued at a trading price of each of $13.00 per share, $6.00 per share, or $3.00 per share would be 3.97 million shares, 8.6 million shares or 17.2 million shares, respectively (provided that the Company’s sales of shares under the Facility is subject to a 19.99% “exchange cap”). To the extent the Company sells Common Shares under the Facility (along with other issuances and resales of Common Shares including shares subject to the Notes, Warrants, and our public and private warrants, as well as the resale of Common Shares by other holders, and pursuant to the Company’s equity incentive plan), substantial amounts of Common Shares could be issued and/or resold, which would cause dilution and represent a significant percentage of our public float and, further, may result in substantial decreases to the Company’s stock price.
To the extent that SpringBig sells shares common stock under the Facility, substantial amounts of SpringBig’s common stock will be issued, which would cause dilution and may result in substantial decreases to SpringBig’s stock price. See “Risk Factors—Risks Related to the L1 Financing—The issuance of our common shares in connection with the Notes and Warrants Purchase Agreement and/or the Purchase Agreement could cause substantial dilution, which could materially affect the trading price of our common shares,” “—Sales of our Common Shares, or the perception of such sales, including by the Selling Stockholder pursuant to this prospectus in the public market or otherwise could cause the market price for our Common Shares to decline and the Selling Stockholder may still receive significant proceeds” and “—Risks Related to Our Securities and Certain Tax Matters—A significant portion of our total outstanding shares may be sold into the market in the near future, including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well.”
3

TABLE OF CONTENTS

L1 Capital Financing
Notes and Warrants Purchase Agreement. On April 29, 2022, we entered into an agreement (the “Notes and Warrants Purchase Agreement”) with L1 Capital Global Opportunities Master Fund, Ltd. (the “Investor”), to sell to Investor up to (i) a total of up to $16 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 (the “Notes”) and (ii) a number of warrants equal to one-half of the principal of the Notes actually issued, divided by the volume weighted average price (“VWAP”) on the trading day prior to such Note issuance date (the “Warrants”), in a private placement.
On June 14, 2022, at the first closing under the Notes and Warrants Purchase Agreement, we issued and sold to L1 Capital for $10,000,000 in total cash consideration (i) a Note in the principal amount of $11,000,000 (the “First Tranche Note”), and (ii) five-year warrants (the “First Tranche Warrant”) to purchase 586,980 shares of our common stock at an exercise price of $12.00 per share (the “First Tranche Closing”).
As described herein, the Company issued the Note to the Investor for $10,000,000 in total cash consideration and the warrants for no additional consideration. The Conversion Shares are issuable at an original conversion price of $12.00 per share based on the $11,000,000 principal amount of the Note but represent a value of $10.90 per share based on the 916,667 shares issuable upon the conversion of the Note for the $10,000,000 in cash consideration paid to the Company. While the Warrants were issued for no additional consideration, they have a $12.00 exercise price, which is subject to anti-dilution adjustments and the issuance of shares under the Notes are subject to adjustments for dilution and in the event of default.
At the second closing, we shall sell to the Investor, for a total consideration to the Company of up to $4,545,454, (i) up to $5,000,000 principal amount of Notes (with the amount to be drawn at the Company’s discretion) and (ii) Warrants to purchase a number of Common Shares equal to one-half of the principal of the Notes actually issued, divided by the VWAP on the trading day prior to the closing date of such sale, at an exercise price of $12.00 per share (the “Second Tranche Closing”). The Second Tranche Closing shall occur 60 days after the effective date of this Registration Statement or at other such as time as may be agreed between the Company and the Investor, and is subject to satisfaction of the Equity Conditions described below (such date, the “Second Tranche Closing Date”). Assuming that the warrants to be issued at the Second Tranche Closing were determined using the closing price of our Common Shares on June 29, 2022 ($1.93), such Warrants would be exercisable for a total of 1,295,337 shares.
The Notes are convertible at the option of the holder beginning at the earlier of (i) the date of effectiveness of the Registration Statement of which this prospectus forms a part, or (ii) the first anniversary of the Note issuance date, at an initial conversion share price of $12.00 per share, subject to certain anti-dilution adjustments. Interest at 6% per annum is payable quarterly in arrears in cash. Principal amortization on each Note commences six months after issuance, at which point principal is payable in equal monthly installments through the maturity date of the Note. The Company may, at its option, satisfy each principal payment either in cash or, if the Equity Conditions described below are met, by issuing a number of shares of common stock equal to the amount due on such date divided by the lower of (i) the Conversion Price or (ii) 93% of the VWAP prior to such monthly payment date. Each Warrant shall be exercisable for shares of the Company’s common stock at an exercise price of $12.00 per share, subject to certain anti-dilution adjustments.
The Notes are not prepayable in whole or in part prior to the maturity date. However, beginning five (5) months after the issuance of a Note (November 14, 2022 in the case of the First Tranche Note), the Company is permitted, at its option, to use between 60% and 25% of the net proceeds from Common Stock sales under the Cantor Equity Facility to make a prepayment of the Notes.
The terms of the Notes and Warrants Purchase Agreement contains customary representations and warranties, indemnification, and other covenants of the Company and the Investor, as well as the following material terms: The Notes are convertible into common stock at a rate of $12.00 per share (the “Conversion Price”). The Conversion Price may be adjusted in the event of dilutive issuances. In addition, under the terms of the Notes, the Investor has the right to defer or (with the Company’s consent) accelerate, up to four of the monthly principal payments. Neither the Company, nor Investor, may convert any portion of the Notes to the extent that, after giving effect to such conversion, the Investor (together with any affiliated parties) would beneficially own in excess of 4.99% of our outstanding common stock unless the Investor provides SpringBig written notice of an increase to this limitation, not to exceed 9.99%.
The “Equity Conditions” required to be met in order for us to pay principal on the Notes with shares of common stock in lieu of a monthly cash payment, and to issues Notes in the Second Tranche, include, without limitation, that (i) the absence of any event of default under the Notes and Warrants Purchase Agreement, the Notes or related
4

TABLE OF CONTENTS

documents, (ii) a registration statement must be in effect with respect to the resale of the shares issuable upon conversion or redemption of the Notes (or, that an exemption under Rule 144 is available), (iii) our total market capitalization on the Nasdaq Market remains above $50,000,000 (or $75,000,000 in the case of the Second Tranche Closing) and a resale registration statement has registered the common stock underlying the Notes and Warrants) and (iv) the average daily trading volume of our common stock must equal at least $500,000 for the 20 trading days immediately prior to any applicable repayment date (as applicable).
The Warrants have an exercise price, subject to the same anti-dilution protection as the Notes. The Warrants are exercisable for cash, or on a cashless basis only for so long as no registration statement covering resale of the shares is in effect. The Investor shall not have the right to exercise any portion of the Warrant to the extent that, after giving effect to such exercise, the Investor (together with any affiliated parties), would beneficially own in excess of 4.99% of our outstanding common stock.
We believe the likelihood that the Investor will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Investor will be unlikely to exercise their Warrants. Accordingly, there is no assurance that the Investor will elect to exercise any or all of such Warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the Warrants.
Future Financing Participation Right. Under the Notes and Warrants Purchase Agreement, subject to certain exceptions, for a period of 18 months after the First Tranche Closing Date, the Investors shall have the right to participate in up to 30% of future financings by the Company undertaken during that period, other than shares sold pursuant to the Cantor Equity Line.
Share Reserve. The Company shall at all times keep authorized and reserved and available for issuance, free of preemptive rights, a number of ordinary shares equal to three times the number of ordinary shares issuable upon conversion of the Notes and exercise of the Warrants.
Negative Covenants and Prohibited Transactions. The Notes and Warrants Purchase Agreement and the terms of the Note contain certain negative covenants, including restrictions that prohibit us from issuing and additional indebtedness (with limited exceptions), incurring any additional liens on our assets and making or declaring any dividends or distributions. The documents also contain certain restrictions on our issuance of additional equity. Until the effective date of this Registration Statement, the Company shall not issue, enter into an agreement to issue or announce the issuance of any common stock or securities convertible, exercisable or exchangeable for common stock, except for issuances under our equity compensation plan and other limited exceptions. Until the repayment of the Notes, the Company shall not (i) enter into any equity line, at-the-market, or similar agreement for an offering of its equity securities (other than the Cantor Equity Facility), nor (ii) issue or agree to issue any transactions that qualify as “variable rate transactions.” See “L1 Capital Financing” and “Risk Factors—Risks Related to the L1 Financing—The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations and, further, no assurances can be made that we will receive cash proceeds from the Warrants.”
Security Agreement and Subsidiary Guarantee. We entered into a Security Agreement with the Investor pursuant to which the Investor was granted a security interest in all of the assets of the Company and Legacy SpringBig and certain of its subsidiaries. Repayment of the Note is also guaranteed by Legacy SpringBig pursuant to a subsidiary guaranty.
Registration Statement. Pursuant to the Registration Rights Agreement we entered into with the Investor, we agreed to file a registration statement with the SEC within 20 days of the closing of the First Tranche registering all common stock underlying the Notes and the Warrants for resale, and to cause the Registration Statement to be declared effective no later than 75 days after the closing of the First Tranche (provided that we will not be responsible for the failure of the Registration Statement to be declared effective due to factors outside of our control).
Default Remedies. The Notes are also subject to certain customary events of default (each referred to as an “Event of Default”), including: (i) failure to make payments of principal, interest or other sums due under the Notes; (ii) failure to observe or perform any other material covenant, condition or agreement under the terms of any transaction documents; (iii) default on payments of principal or interest on other indebtedness in excess of $600,000, or failure to observe or perform under other material agreements related to such indebtedness, resulting in acceleration of such indebtedness; (iv) public announcement of inability to comply with proper conversion requests;
5

TABLE OF CONTENTS

(v) once underlying shares are freely tradable, failure to instruct the transfer agent to remove restrictive legends within two trading days; (vi) failure to timely deliver shares upon conversion; (vii) failure to have required minimum shares authorized, reserved and available for issuance; (viii) any representation or warranty under the transaction documents is proven to have been materially false, incorrect or breached on the date it was made; (ix) application for, petition for, or issuance of notice for bankruptcy; (x) commencement of proceeding for liquidation, dissolution, or winding up, appointment of receiver, or other relief under bankruptcy or related laws; (xi) final judgments in excess of $600,000; (xii) de-listing or failure to comply with requirements under Rule 144 (other than volume and manner of sale requirement); (xiii) common stock is no longer registered pursuant to a “going private transaction”; (xiv) existence of an SEC stop order with respect to the registration statement registering the resale of the common stock underlying the Notes and the Warrants, or a trading suspension by the SEC or Nasdaq; (xv) failure to execute transfer agent instructions upon replacement of SpringBig’s transfer agent; (xvi) entrance into a variable rate transaction without written consent of the existing Note holders; or (xvii) failure to pledge the equity interests of a newly formed subsidiary or otherwise guarantee the Notes within ten trading days of the formation of such subsidiary. Upon an Event of Default as defined in the Note, the Investor has the right to accelerate payment of the Notes at a “Mandatory Default Amount” equal to 115% of the outstanding principal amount of the Notes. In addition, at any time when an Event of Default has occurred and is continuing, the Notes would be convertible at a rate equal to the lower of the Conversion Price and 80% of the lowest VWAP in the ten prior trading days, provided, that if the default is cured the default conversion rate elevates back to the normal Conversion Price. Further, if an Event of Default has occurred and is continuing at any time after the earlier of the effectiveness of the Registration Statement or June 14, 2023, the Investor has the right to demand payment of interest on the Notes in an amount of shares of Common Stock equal to the amount due on such date divided by the lower of the Conversion Price or 93% of the lowest VWAP in the ten prior trading days.
Selling Stockholders’ Return on Sale of Securities. As described herein, the Company issued the Note to the Investor for $10,000,000 in total cash consideration and the Warrants for no additional consideration. The Conversion Shares are issuable at an original conversion price of $12.00 per share based on the $11,000,000 principal amount of the Note but represent a value of $10.90 per share based on the 916,667 shares issuable upon the conversion of the Note for the $10,000,000 in cash consideration paid to the Company. While the Warrants were issued for no additional consideration, they have a $12.00 exercise price, which is subject to anti-dilution adjustments and the issuance of shares under the Notes are subject to adjustments for dilution and in the event of default (as described herein).
We believe the likelihood that the Investor will exercise the Warrants is dependent upon the trading price of our Common Shares, and, if the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Investor will be unlikely to exercise their warrants. As of July 27, 2022, the closing trading price of our Common Stock was $1.68.
Both the conversion price of the Notes and the exercise price of the Warrants may be adjusted in the event the Company were to undertake dilutive issuances. In the event the Company were to raise capital through the issuance of equity (to the extent permitted under the terms of the Notes and Warrants), it could have the impact of lowering the effective price of the underlying shares below market value. Further, the Company may, at its option and subject to certain conditions, satisfy principal payments under the Notes with issuing a number of shares of common stock equal to the amount due on such date, divided by the lower of the conversion price or 93% of the VWAP prior to such monthly payment date, multiplied by of the amount due on such date. Further, in the event of a default under the Notes, the Notes would be convertible at a rate equal to the lower of the conversion price and 80% of the lowest VWAP in the ten prior trading days. In such instances, the Investor would receive Common Shares below the market price, which could provide them with a profit on the sales of such shares even if the trading price at such time(s) is significantly below the per share offering price for the shares offered in Tuatara’s IPO or such other price at which public investors may have acquired Common Shares. However, the amount of such profit cannot be determined at this time.
Summary Risk Factors
The following is a summary of select risks and uncertainties that could materially adversely affect us and our business, financial condition and results of operations. Before you invest in our common stock, you should carefully consider all the information in this prospectus, including matters set forth under the heading “Risk Factors,” immediately following this prospectus summary. These risks include the following, among others:
6

TABLE OF CONTENTS

Risks Related to the L1 Financing
Our obligations to L1 Capital are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets. If that were to happen, we could be forced to curtail, or even to cease, our operations.
The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations and, further, no assurances can be made that we will receive cash proceeds from the Warrants.
The issuance of our common shares in connection with the Notes and Warrants Purchase Agreement could cause substantial dilution, which could materially affect the trading price of our Common Shares
Sales of our Common Shares, or the perception of such sales, including by the Selling Stockholder pursuant to this prospectus in the public market or otherwise could cause the market price for our Common Shares to decline and the Selling Stockholder may still receive significant proceeds.
Risks Related to Our Business and Industry
We have a relatively short operating history in a rapidly evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. As our costs increase, we may not be able to generate sufficient revenue to maintain profitability in the future. We also have a history of losses and may not achieve profitability in the future.
If we do not successfully develop and deploy new software, platform features or services to address the needs of our clients, our business, financial condition, and results of operations could suffer.
If we fail to retain our existing clients and consumers or to acquire new clients and consumers in a cost-effective manner, our revenue may decrease and our business may be harmed.
If we fail to expand effectively into new markets, our revenue and business will be adversely affected.
Federal law enforcement may deem our clients to be in violation of U.S. federal law, and, in particular the CSA. A change in U.S. federal policy on cannabis enforcement and strict enforcement of federal cannabis laws against our clients would undermine our business model and materially affect our business and operations.
Some of our clients currently and in the future may not be in compliance with licensing and related requirements under applicable laws and regulations and we do not, and cannot, ensure that our client will conduct their business activities in a manner in compliance in all respects with regulations and requirements.
Our business is dependent on U.S. state laws and regulations and Canadian federal and provincial laws and regulations pertaining to the cannabis industry, as well as continued market acceptance of cannabis by consumers.
Our business is highly dependent upon our brand recognition and reputation, and any erosion or degradation of our brand recognition or reputation would likely adversely affect our business and operating results.
We currently face intense competition in marketing and advertising services available to our clients, and we expect competition to further intensify as the cannabis industry continues to evolve.
If we fail to manage our growth effectively, our brand, business and operating results could be harmed. The growth of our business depends on our ability to accurately predict consumer trends, successfully offer new services, improve existing services and expand into new markets.
If we are unable to recruit, train, retain and motivate key personnel, we may not achieve our business objectives.
If our current marketing model is not effective in attracting new clients, we may need to employ higher-cost sales and marketing methods to attract and retain clients, which could adversely affect our profitability.
We may be unable to scale and adapt our existing technology and network infrastructure in a timely or effective manner to ensure that our platform is accessible, which would harm our reputation, business and operating results.
7

TABLE OF CONTENTS

Interruptions to, or perceived errors, failures, or bugs in our platform and other cyber-events affecting our platform or our systems could adversely affect our operating results and growth prospects.
The impact of global, regional or local economic and market conditions or catastrophic events, including health crises, may adversely affect our business, operating results and financial condition.
Fluctuations in our quarterly and annual operating results may adversely affect our business and prospects.
We may improve our products and solutions in ways that forego short-term gains.
We are subject to a variety of standards, governmental laws, regulations and other legal obligations and any actual or perceived failure to comply with such obligations could harm our business. Changes to such standards, laws, regulations and other obligations may have material adverse effect on our business, cash flow, financial condition or operating results.
Future investments in our growth strategy, including acquisitions, could disrupt our business and adversely affect our operating results, financial condition and cash flows.
The terms of the agreements governing our funding may restrict our operations.
We may need to raise additional capital, which may not be available on favorable terms, if at all, causing dilution to our stockholders, restricting our operations or adversely affecting our ability to operate our business. We may be unable to obtain additional financing to fund our operations or growth.
Our obligations to the Investor in our Notes and Warrants are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets. If that were to happen, we could be forced to curtail, or even to cease, our operations.
The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations.
We may be subject to potential adverse tax consequences both domestically and in foreign jurisdictions and we may not be able to utilize our net operating loss and tax credit carryforwards.
Changes in accounting standards or other factors could negatively impact our future effective tax rate.
Certain taxing authorities may successfully assert that SpringBig should have collected or that in the future SpringBig should collect sales and use or similar taxes for certain services which could adversely affect our results of operations.
Additional Risks Related to the Cannabis Industry
Our business and our clients are subject to a variety of U.S. and foreign laws regarding financial transactions related to cannabis. Cannabis remains illegal under federal law, and therefore, strict enforcement of federal laws regarding cannabis would likely result in our inability to execute our business plan.
We are dependent on our banking relations, and we may have difficulty accessing or consistently maintaining banking or other financial services due to our connection with the cannabis industry. We also may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.
We may have difficulty using bankruptcy courts or enforcing our commercial agreements due to our involvement in the regulated cannabis industry.
The conduct of third parties may jeopardize our business.
A failure to comply with laws and regulations regarding our use of telemarketing, including the TCPA, could increase our operating costs and materially and adversely impact our business, financial condition, results of operations, and prospects.
We may continue to be subject to constraints on marketing our products.
Cannabis businesses may be subject to civil asset forfeiture.
Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.
8

TABLE OF CONTENTS

Risks Related to SpringBig’s Intellectual Property
We may in the future be, subject to disputes and assertions by third parties with respect to alleged violations of intellectual property rights. These disputes could be costly to defend and could harm our business and operating results.
Some of our solutions contain open source software, which may pose particular risks to our proprietary software and solutions.
The success of our business heavily depends on our ability to protect and enforce our intellectual property rights.
Risks Related to Our Securities and Certain Tax Matters
The price of our securities may be volatile.
We do not intend to pay cash dividends for the foreseeable future.
We may be subject to securities litigation, which is expensive and could divert management attention.
A significant portion of our total outstanding shares may be sold into the market in the near future including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.
We may amend the terms of our public and private warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of Common Stock purchasable upon exercise of a warrant could be decreased, all without your approval.
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We have and will continue to incur increased costs as a result of operating as a public company and our management has and will continue to devote a substantial amount of time to new compliance initiatives.
Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effect on our business.
Anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our Common Shares and could entrench management.
Our largest shareholders and certain members of our management own a significant percentage of our Common Shares and are able to exert significant control over matters subject to shareholder approval.
Future sales and issuances of our Common Shares, including pursuant to our equity incentive and other compensatory plans, will result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
Because there are no current plans to pay cash dividends on our Common Shares for the foreseeable future, you may not receive any return on investment unless you sell our Common Shares for a price greater than that which you paid for it; furthermore, there is no guarantee that the value of the Common Shares will increase to a price greater than that which you paid for it.
9

TABLE OF CONTENTS

Corporate Information
We were originally formed on January 24, 2020 under the name “Tuatara Capital Acquisition Corporation,” as a blank check company incorporated as a Cayman Islands exempted company, incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On June 13, 2022, in anticipation of the consummation of the previously announced business combination among Tuatara, Merger Sub, and Legacy SpringBig, 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 and it then changed its name to SpringBig Holdings, Inc.
Our principal executive office is located at 621 NW 53rd Street, Suite 260, Boca Raton, Florida 33487. Our telephone number is (800) 772-9172. Our website address is www.springbig.com. Information contained on our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.
Legal Proceedings
From time to time, we may become involved in legal or regulatory proceedings arising in the ordinary course of our business. We do not currently, however, expect such legal proceedings to have a material adverse effect on our business, operating results or financial condition. However, depending on the nature and timing of a given dispute, an unfavorable resolution could materially affect our current or future results of operations or cash flows.
Smaller Reporting Company
We are a “smaller reporting company” and will remain a smaller reporting company if either (i) the market value of our stock held by non-affiliates was less than $250 million as of the last business day of our most recently completed second fiscal quarter, or (ii) our annual revenue was less than $100 million during our most recently completed fiscal year and the market value of our stock held by non-affiliates was less than $700 million as of the last business day of our most recently completed second fiscal quarter. We intend to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, such as reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition periods which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of SpringBig’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
10

TABLE OF CONTENTS

THE OFFERING
Issuer
SpringBig Holdings, Inc.
Common Shares offered by the Selling Stockholder
4,510,940 shares of common stock, which includes 2,750,000 reserved Conversion Shares and 1,760,940 reserved Warrant Shares. Of the Conversion Shares offered hereby, (i) 916,667 are issuable upon conversion of the First Tranche Notes at $12.00 per share, and (ii) 1,833,333 additional Common Shares are reserved for potential issuance in the event of default or dilution adjustments or repayment of the First Tranche Notes by the Company in Common Shares at prevailing market prices. The Conversion Shares include (i) 586,980 Common Shares issuable upon exercise of the First Tranche Warrants, and (ii) 1,173,960 additional Common Shares reserved for potential issuance in the event of possible future default or dilution adjustments at prevailing market prices.
Use of Proceeds
We will not receive any proceeds from the sale by the Selling Stockholder of the shares of common stock being offered by this prospectus. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current $12.00 exercise price with respect to 1,760,940 shares of common stock, would result in gross proceeds to us of approximately $21,131,280, assuming the exercise in full of all of the Warrants. There is no assurance that the Selling Stockholder will elect to exercise any or all of such Warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the Warrants. We believe the likelihood that the Selling Stockholder will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Selling Stockholder will be unlikely to exercise their Warrants. The proceeds from such Warrant exercises, if any, will be used for working capital and general corporate purposes. See “Use of Proceeds.”
Market for Common Shares
The Common Shares are currently traded on The Nasdaq Global Market under the symbol “SBIG.”
Risk Factors
See “Risk Factors” and other information included in this prospectus for a discussion of factors you should consider before investing in our securities.
For additional information concerning the offering, see “Plan of Distribution”.
11

TABLE OF CONTENTS

RISK FACTORS
Our business involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus, including our condensed consolidated financial statements and the related notes appearing elsewhere in this prospectus, as well as the risks, uncertainties and other information set forth in the reports and other materials filed or furnished by us with the SEC. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, prospects, results of operations, financial condition and cash flows. If any such events were to happen, the trading shares of our Common Shares could decline, and you could lose all or part of your investment.
Risks Related to the L1 Financing
Our obligations to L1 Capital are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets. If that were to happen, we could be forced to curtail, or even to cease, our operations.
On April 29, 2022, the Company entered into the Notes and Warrants Purchase Agreement with the Investor, pursuant to which the Company, on June 14, 2022, issued the First Tranche Note and may issue the Second Tranche Note to the Investor. Simultaneously, Legacy SpringBig entered into a Guaranty Agreement to guarantee the Company’s obligations under the Notes and the Company and Legacy SpringBig entered into Security Agreement, pursuant to which the Investor was granted a security interest in all of the assets of the Company and Legacy SpringBig to secure repayment of amounts due under the Notes. As a result, if we default on our obligations under the Notes, the Investor could foreclose on its security interests and liquidate or take possession of some or all of the assets of the Company, Legacy SpringBig and its subsidiaries, which would harm our business, financial condition and results of operations and could require us to curtail, or even to cease our operations.
The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations and, further, no assurances can be made that we will receive cash proceeds from the Warrants.
The agreements related to the sale of the Notes and Warrants contain a number of restrictive covenants that may impose significant operating and financial restrictions on us while Notes remain outstanding or unless the restrictions are waived by consent of each noteholder, including restrictions on our ability to incur additional indebtedness and guarantee indebtedness; incur liens or allow mortgages or other encumbrances; prepay, redeem, or repurchase certain other debt; pay dividends or make other distributions or repurchase or redeem our capital stock; sell assets or enter into or effect 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); issue additional equity (outside of the Facility, issuances under our equity compensation plan and other limited exceptions); enter into variable rate transactions (exclusive of the Facility); and adopt certain amendments to our governing documents, among other restrictions. In addition, the terms of the Notes restrict our ability to issue additional equity capital. The Company does not have the ability to prepay the Notes prior to maturity except to the limited extent of proceeds from the Cantor Equity Facility to the extent available.
A breach of the covenants or restrictions under the agreements governing our indebtedness could result in an event of default under these agreements. As a result of these restrictions, we may be limited in how we conduct our business, unable to raise additional debt or equity financing to operate during general economic or business downturns and/or unable to compete effectively or to take advantage of new business opportunities.
Further, while we could potentially receive up to an aggregate of $21,131,280 in gross proceeds from the exercise of the Warrants, assuming the exercise in full of all of the Warrants, no assurances can be made that the Investor will elect to exercise any or all of such Warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the Warrants. We believe the likelihood that the Investor will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Investor will be unlikely to exercise their warrants. Accordingly, we may not receive cash proceeds with respect to the Warrants and we are restricted in our ability to raise additional debt or equity financing. See also “—Risks Related to Our Business and Industry—We may need to raise additional capital, which may not be available on favorable terms, if at all, causing dilution to our stockholders, restricting our operations or adversely affecting our ability to operate our business.”
12

TABLE OF CONTENTS

The issuance of our common shares in connection with the Notes and Warrants Purchase Agreement could cause substantial dilution, which could materially affect the trading price of our Common Shares.
To the extent that the Notes and Warrants are converted into or exercised for Common Shares, substantial amounts of our Common Shares will be issued. Under certain default circumstances the Notes and Warrants may become exercisable at prevailing prices or discounts to prevailing prices, and the conversion price of the Notes and exercise price of the Warrants may be adjusted in the event of certain issuances of common stock below the original Conversion Price. In addition, we have the ability under certain circumstances to make payments on the Notes in Common Shares at then prevailing market prices. As described above, we are required to reserve three times the original number of shares obtainable under the Notes and Warrants to provide for these circumstances. Although we cannot predict the number of our common shares that will actually be issued in connection with any such conversions and/or sales, such issuances could result in substantial decreases to our stock price.
Further, substantial amounts of our Common Shares may also be issued, sold and/or resold under our committed equity facility with CF Principal Investments LLC, other issuances and resales of Common Shares including shares subject to our public and private warrants, as well as the resale of Common Shares by other holders, and pursuant to the Company’s equity incentive plan, which could cause further substantial dilution of our Common Shares and materially impact the trading price of our Common Shares. See “—Risks Related to Our Securities and Certain Tax Matters—A significant portion of our total outstanding shares may be sold into the market in the near future including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well” and “—Future sales and issuances of our Common Shares, including pursuant to our equity incentive and other compensatory plans, will result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.”
Sales of our Common Shares, or the perception of such sales, including by the Selling Stockholder pursuant to this prospectus in the public market or otherwise could cause the market price for our Common Shares to decline and the Selling Stockholder may still receive significant proceeds.
The sale of our Common Shares in the public market or otherwise, including sales pursuant to this prospectus, or the perception that such sales could occur, could harm the prevailing market price of our Common Shares. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that it deems appropriate (which ability to sell equity securities is also subject to restrictions under the terms of the Notes and related agreements). Resales of our Common Shares may cause the market price of our securities to drop significantly, regardless of the performance of our business.
Following the conversion of the Notes and/or the exercise of the Warrants, there are no limitations on the Selling Stockholder’s ability to sell the Common Shares received by the Selling Stockholder. As such, sales of a substantial number of Common Shares in the public market could occur at any time following such conversion or exercise. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
If all 4,510,940 Common Shares being registered for potential resale pursuant to this prospectus were issued and outstanding as of June 14, 2022, such Common Shares would represent approximately 15% of the total number of our Common Shares outstanding after giving effect to such issuance. Given the substantial number of Common Shares being registered for potential resale by the Selling Stockholder pursuant to this prospectus, the sale of shares by the Selling Stockholder, or the perception in the market that the stockholders of a large number of shares intend to sell shares, could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock.
See “—Risks Related to Our Securities and Certain Tax Matters—A significant portion of our total outstanding shares may be sold into the market in the near future including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well.”
Further, Common Shares being offered for resale pursuant to this prospectus include shares that may ultimately be acquired at values significantly below the trading price of our Common Shares and the sale of which would result in the Selling Stockholder realizing a significant gain. The Company issued the Note to the Investor for $10,000,000 in total cash consideration and the Warrants for no additional consideration. The Conversion Shares are issuable at an original conversion price of $12.00 per share based on the $11,000,000 principal amount of the Note but represent a value of $10.90 per share based on the 916,667 shares issuable upon the conversion of the Note for the $10,000,000 in cash consideration paid to the Company. While the Warrants were issued for no additional consideration, they have a $12.00 exercise price,
13

TABLE OF CONTENTS

which is subject to anti-dilution adjustments and the issuance of shares under the Notes are subject to adjustments for dilution and in the event of default. The conversion price of the Notes and the exercise price of the Warrants may be adjusted in the event the Company were undertake dilutive issuances. In the event the Company were to raise capital through the issuance of equity (to the extent permitted under the terms of the Notes and Warrants), it could have the impact of lowering the effective price of the underlying shares below market value. Further, the Company may, at its option and subject to certain conditions, satisfy principal payments under the Notes with issuing a number of shares of common stock equal to the amount due on such date, divided by the lower of the conversion price or 93% of the VWAP prior to such monthly payment date, multiplied by of the amount due on such date. Further, in the event of a default under the Notes, the Notes would be convertible at a rate equal to the lower of the conversion price and 80% of the lowest VWAP in the ten prior trading days. In such instances, the Investor would receive Common Shares below the market price, which could provide them with a profit on the sales of such shares even if the trading price at such time(s) is significantly below the per share offering price for the shares offered in Tuatara’s IPO or such other price at which public investors may have acquired Common Shares. Public holders of our Common Shares may not experience a similar rate of return on their shares as a result of these variations in share prices.
Risks Related to Our Business and Industry
We have a relatively short operating history in a rapidly evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. As our costs increase, we may not be able to generate sufficient revenue to maintain profitability in the future.
We have a relatively short operating history in a quickly evolving industry that may not develop as we anticipate, if at all. Both our relatively short operating history and the pace of dramatic change in the cannabis industry, and the complex regulatory regime applicable to it, makes it difficult to assess our future prospects, and you should evaluate our business in light of the risks and difficulties we may encounter as the industry continues to evolve. While our revenue has grown in recent periods, this growth may not be sustainable due to a number of factors, including the maturation of our business, increased competition and the eventual decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded. We may not be able to generate sufficient revenue to achieve and sustain profitability. Additionally, we expect our costs to increase in future periods as we expend substantial financial and other resources on, among other things:
sales and marketing, including continued investment in our current marketing efforts and future marketing initiatives;
successfully compete with existing and future providers of other forms of marketing and customer engagement;
managing complex, disparate and rapidly evolving regulatory regimes imposed by U.S. and Canadian federal, state and provincial, local and other non-U.S. governments around the world applicable to cannabis and cannabis-related businesses;
executing our growth strategy;
hire, integrate and retain talented sales and other personnel;
expansion domestically and internationally in an effort to increase our client usage, client base, retail locations we serve, and our sales to our clients;
development of new products and services, and increased investment in the ongoing development of our existing products and services;
continuing to invest in scaling our business, particularly around client success and engineering;
avoiding interruptions or disruptions in our platform or services; and
general administration, including a significant increase in legal and accounting expenses related to public company compliance, continued compliance with various regulations applicable to cannabis industry businesses and other work arising from the growth and maturity of our company.
These expenditures may not result in additional revenue or the growth of our business. If we fail to continue to grow revenue or to sustain profitability, the market price of our securities could decline, and our business, operating results and financial condition could be adversely affected.
14

TABLE OF CONTENTS

If we do not successfully develop and deploy new software, platform features or services to address the needs of our clients, our business, financial condition, and results of operations could suffer.
Our success has been based on our ability to design software, platform features and services that address the needs of our clients. We spend substantial amounts of time and money researching and developing new technologies and enhanced versions of existing platform features, as well as new features, to meet our clients’ rapidly evolving needs. As consumers and clients demand comprehensive data analysis from platforms such as us, in conjunction with their point-of-sale providers, our ability to integrate with a client’s POS system and other third party technology integrations may become increasingly important. If we are unable to arrange or complete new integrations, or improve our existing integrations, we may lose market share to competitors. There is no assurance that enhancements to our software, platform features or new services or capabilities will be compelling to our clients or gain market acceptance. If our research and development investments do not accurately anticipate market demand or if we fail to develop our software, platform features or services in a manner that satisfies client preferences in a timely and cost-effective manner, we may fail to retain our existing clients or increase demand for our services.
The introduction of new products and services by competitors or the development of entirely new technologies to replace existing service offerings could make our platforms obsolete or adversely affect our business, financial condition, and results of operations. We may experience difficulties with software development, design, or marketing that delay or prevent our development, introduction or implementation of new platforms, platform features or capabilities, or cause errors to arise with our existing software. We have in the past experienced delays in our internally planned release dates of new features and capabilities, and there can be no assurance that new platforms, platform features, or capabilities will be released according to schedule. Any delays or other disruptions could result in adverse publicity, loss of revenue or market acceptance, or claims by consumers or suppliers brought against us, any of which could harm our business. Moreover, the design and development of new platforms or new platform features and capabilities to our existing platform may require substantial investment, and we have no assurance that such investments will be successful. If consumers in the market do not widely adopt our new platforms, platform features, and capabilities, we may not be able to realize a return on our investment and our business, financial condition, and results of operations may be adversely affected.
If we fail to retain our existing clients and consumers or to acquire new clients and consumers in a cost-effective manner, our revenue may decrease and our business may be harmed.
We compete in a dynamic, innovative, and fairly new market, which we expect will continue to evolve rapidly. We believe that our success is dependent on our ability to continue identifying and anticipating the needs of our clients and, in turn, their consumers, and retaining our existing clients and adding new clients. While we have historically been able to grow and retain our client base, we may grow more slowly than we expect or than we have grown in the past. Our ability to retain clients depends in part on our ability to create and maintain high levels of client satisfaction, which we may not always be capable of providing, including for reasons outside of our control. Any decrease in client satisfaction or other change negatively affecting our ability to retain clients could result in a rapid, concentrated impact to our results going forward. Therefore, our failure to retain existing clients, even if such losses are offset by an increase in revenue resulting from the acquisition of new clients, could have an adverse effect on our business and operating results.
If we fail to expand effectively into new markets, our revenue and business will be adversely affected.
While a key part of our business strategy is to add clients in our existing geographic markets, we intend to expand our operations into new markets if and as cannabis continues to be legalized in new markets. Any such expansion places us in competitive markets with which we may be unfamiliar, requires us to analyze the potential applicability of new and potentially complicated regulations regarding the usage, sale and marketing of cannabis, and involves various risks, including the need to invest significant time and resources and the possibility that returns on such investments will not be achieved for several years, if at all. As a result of such expansion, we may incur losses or otherwise fail to enter new markets successfully. In attempting to establish a presence in new markets, we expect to incur significant expenses and face various other challenges, such as expanding our compliance efforts to cover those new markets. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenues sufficiently to offset these expenses. Our current and any future expansion plans will require significant resources and management attention.
15

TABLE OF CONTENTS

We have a history of losses and may not achieve profitability in the future.
SpringBig is an early-stage company with a history of losses. SpringBig may not achieve or maintain profitability in the future. We may continue to incur net losses in the future, and such losses may fluctuate significantly from quarter to quarter. We will need to generate and sustain significant revenue for our business generally, and achieve greater scale and generate greater operating cash flows from our customer contracts in particular, in future periods in order to achieve and maintain profitability. We also expect general and administrative expenses to increase to meet the increased compliance and other requirements associated with operating as a public company and evolving regulatory requirements.
Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue sufficiently to offset our higher operating expenses. We may continue to incur significant losses, and we may not achieve or maintain future profitability, due to a number of reasons, including the risks described in this prospectus, unforeseen expenses, difficulties, complications and delays, and other unknown events. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding our operations, this could make it difficult for you to evaluate our current business and our future prospects and may have a material adverse effect on our business, financial condition and results of operations.
Federal law enforcement may deem our clients to be in violation of U.S. federal law, and, in particular the CSA. A change in U.S. federal policy on cannabis enforcement and strict enforcement of federal cannabis laws against our clients would undermine our business model and materially affect our business and operations.
U.S. federal law, and more specifically the CSA, proscribes the cultivation, processing, distribution, sale, advertisement and possession of cannabis. As a result, U.S. federal law enforcement authorities, in their attempt to regulate the illegal or unauthorized production, distribution, promotion, sale, possession, or use of cannabis, may seek to bring criminal actions against our clients under the CSA. If our clients are found to be violating U.S. federal law relating to cannabis, they may be subject not only to criminal charges and convictions, but also to forfeiture of property, significant fines and penalties, disgorgement of profits, administrative sanctions, cessation of business activities, or civil liabilities arising from proceedings initiated by either the U.S. government or private citizens. Any of these actions or consequences on our clients could have a material adverse effect on our business, operating results or financial condition, or could force us to cease operations, and as a result, our investors could lose their entire investment.
Further, to the extent any law enforcement actions require us to respond to subpoenas, or undergo search warrants, for client records, cannabis businesses could elect to cease using our products and services. Until the U.S. federal government changes the laws with respect to cannabis, and particularly if the U.S. Congress does not extend the Omnibus Spending Bill’s protection of state medical cannabis programs, described below, to apply to all state cannabis programs, U.S. federal authorities could more strictly enforce current federal prohibitions and restrictions. An increase in federal enforcement against companies licensed under state cannabis laws could negatively impact the state cannabis industries and, in turn, our business, operating results, financial condition, brand and reputation.
Some of our clients currently and in the future may not be in compliance with licensing and related requirements under applicable laws and regulations. Allowing unlicensed or noncompliant businesses to access our platform and services, or allowing businesses to use our solutions in a noncompliant manner, may subject us to legal or regulatory enforcement and negative publicity, which could adversely impact our business, operating results, financial condition, brand and reputation. In addition, allowing businesses that engage in false or deceptive advertising practices to use our solutions may subject us to negative publicity, which could have similar adverse impacts on us.
While we have instituted policies and procedures in connection with the verification and periodic screening of the licensing status of our clients operating cannabis retail businesses (and our contracts with clients generally provide for client representations relating to compliance, termination of services in the case of client noncompliance, and client indemnification obligations), some of our clients currently and in the future may not be in compliance with licensing and related requirements under applicable state laws and regulations. There could be legal enforcement actions against unlicensed or insufficiently licensed entities selling cannabis, which could negatively impact us.
Any legal or regulatory enforcement against us based on our platform, the content provided by clients, the marketing campaigns created by clients on our platform or noncompliance by our clients with licensing and other legal requirements, could subject us to various risks, including monetary penalties and/or required changes to our platform or business model, and would likely cause us to experience negative publicity. Any of these developments could materially and adversely impact our business, operating results, financial condition, brand, and reputation.
16

TABLE OF CONTENTS

We generally do not, and cannot, ensure that our clients will conduct their business activities in a manner compliant with the complex, disparate and constantly evolving regulations and requirements affecting the legal cannabis industry. As a result, federal, state, provincial or local government authorities may seek to bring criminal, administrative or regulatory enforcement actions against our clients, which could have a material adverse effect on our business, operating results or financial conditions, or could force us to cease operations.
While our solutions provide features to support our clients’ compliance with certain regulations and other legal requirements applicable to the cannabis industry, and we have policies and procedures regarding the verification and periodic screening of the licensing status of our clients, we generally do not, and cannot, ensure that at all times our clients will conduct their business activities in a manner compliant with such regulations and requirements, in whole or in part. Their legal noncompliance could result in regulatory and even criminal actions against them, which could lead to a material adverse impact on our business and operating results or financial condition, and as a result, our investors could lose their entire investment. For additional information, see the other risk factors in this section, including “Some of our clients currently and in the future may not be in compliance with licensing and related requirements under applicable laws and regulations. Allowing unlicensed or noncompliant businesses to access our platform and services, or allowing businesses to use our solutions in a noncompliant manner, may subject us to legal or regulatory enforcement and negative publicity, which could adversely impact our business, operating results, financial condition, brand and reputation. In addition, allowing businesses that engage in false or deceptive advertising practices to use our solutions may subject us to negative publicity, which could have similar adverse impacts on us.”
Our business is dependent on U.S. state laws and regulations and Canadian federal and provincial laws and regulations pertaining to the cannabis industry.
Although the federal CSA classifies cannabis as a Schedule I controlled substance, many U.S. states have legalized cannabis to varying degrees. In addition, the enactment of the Cannabis Act legalized the commercial cultivation and processing of cannabis for medical and adult-use purposes in Canada and created a federal legal framework for controlling the production, distribution, promotion, sale and possession of cannabis. The Cannabis Act also provides the provinces and territories of Canada with the authority to regulate other aspects of adult-use cannabis, such as distribution, sale, minimum age requirements (subject to the minimum set forth in the Cannabis Act), places where cannabis can be consumed, and a range of other matters. The governments of every Canadian province and territory have implemented regulatory regimes for the distribution and sale of cannabis for recreational purposes. In addition, subsection 23(1) of the Cannabis Act provides that it is prohibited to publish, broadcast or otherwise disseminate, on behalf of another person, with or without consideration, any promotion that is prohibited by a number of sections of the Cannabis Act. The Cannabis Act therefore includes provisions that could apply to certain aspects of our business, both directly to the solutions we provide and indirectly on account of any noncompliance by those who use our offerings. However, as the Cannabis Act has been recently enacted, there is a lack of available interpretation, application and enforcement of the provisions that may be relevant to digital platforms such as ours, and as a result, it is difficult to assess our potential exposure under the Cannabis Act.
Laws and regulations affecting the cannabis industry in U.S. states and Canada are continually changing. Any change or even the speed of changes could require us to incur substantial costs associated with compliance or alter our business plan, and could detrimentally affect our operations, revenue, and profitability. The commercial cannabis industry is still a young industry, and we cannot predict the impact of the compliance regime to which it may be subject. We will incur ongoing costs and obligations related to regulatory compliance, and such costs may prove to be material. Failure to comply with regulations may result in additional costs for corrective measures, penalties or restrictions on our operations. In addition, changes in regulations, more vigorous enforcement thereof, or other unanticipated events could require extensive changes to our operations or increased compliance costs or give rise to material liabilities, which could have a material adverse effect on us.
Given the concentration of our revenue from the sale of access to our platforms and services, any increase in the stringency of any applicable laws, including U.S. state, or Canadian federal, provincial or territorial, laws and regulations relating to cannabis, or any escalation in the enforcement of such existing laws and regulations against the current or putative cannabis industry within any jurisdiction, could negatively impact the profitability or viability of cannabis businesses in such affected jurisdictions, which in turn could materially adversely affect our business and operating results.
In addition, although we have not yet been required to obtain any cannabis license as a result of existing cannabis regulations, it is possible that cannabis regulations may be enacted in the future that will require us to obtain such a cannabis license or otherwise seek to substantially regulate our business. U.S. and Canadian federal, state, provincial, local and other non-U.S. jurisdictions’ cannabis laws and regulations are broad in scope and subject to
17

TABLE OF CONTENTS

evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. Our failure to adequately manage the risk associated with future regulations and adequately manage future compliance requirements may adversely affect our business, our status as a reporting company and our public listing. Further, any adverse pronouncements from political leaders or regulators about businesses related to the legal cannabis industry could adversely affect the price of our securities.
The rapid changes in the cannabis industry and applicable laws and regulations make predicting and evaluating our future prospects difficult, and may increase the risk that we will not be successful.
The cannabis industry − and the complex regulatory regime applicable to it − is evolving rapidly and may develop in ways that we cannot anticipate. The recently accelerated pace of dramatic change in the cannabis industry makes it difficult to assess our future prospects, and you should evaluate our business in light of the risks and difficulties we may encounter as the industry continues to evolve. These risks and difficulties include:
managing complex, disparate and rapidly evolving regulatory regimes imposed by U.S. and Canadian federal, state and provincial, local and other non-U.S. governments around the world applicable to cannabis and cannabis-related businesses;
adapting to rapidly evolving trends in the cannabis industry and the way consumers and cannabis industry businesses interact with technology;
maintaining and increasing our base of clients;
continuing to preserve and build our brand while upgrading our existing offerings;
successfully competing with existing and future participants in the cannabis marketing and advertisement market and related services;
successfully attracting, hiring, and retaining qualified personnel to manage operations;
adapting to changes in the cannabis industry if the sale of cannabis expands significantly beyond a regulated model, and commodification of the cannabis industry;
successfully implementing and executing our business and marketing strategies;
successfully expanding our business into new and existing cannabis markets; and
successfully executing on our growth strategies.
If the demand for our platform and software solutions does not develop as we expect, or if we fail to address the needs of our clients or our client’s consumers, our business will be harmed. We may not be able to successfully address these risks and difficulties, which could harm our business and operating results.
Because our business is dependent, in part, upon continued market acceptance of cannabis by consumers, any negative trends in the market could adversely affect our business operations.
We are dependent on public support, continued market acceptance and the proliferation of consumers in the state-level and Canadian legal cannabis markets. While we believe that the market and opportunities in the space will continue to grow, we cannot predict the future growth rate or size of the market. Any downturns in, or negative outlooks on, the cannabis industry may adversely affect our business and financial condition.
Expansion of our business is dependent on the continued legalization of cannabis.
Expansion of our business is, in part, dependent upon continued legislative authorization, including by voter initiatives and referenda, of cannabis in various jurisdictions worldwide. Any number of factors could slow, halt, or even reverse progress in this area. Progress for the industry, while encouraging, is not assured. While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, implementation, and enforcement of applicable laws or regulations.
Any one of these factors could slow or halt the legalization of cannabis, which would negatively impact our ability to expand our business. Additionally, the expansion of our business also depends on jurisdictions in which cannabis is currently legalized not narrowing, limiting or repealing existing laws legalizing and regulating cannabis, or altering the regulatory landscape in a way that diminishes the viability of cannabis businesses in those jurisdictions.
18

TABLE OF CONTENTS

Our business is highly dependent upon our brand recognition and reputation, and any erosion or degradation of our brand recognition or reputation would likely adversely affect our business and operating results.
We believe that our business is highly dependent on the SpringBig brand identity and our reputation, which is critical to our ability to attract and retain clients and consumers. We also believe that the importance of our brand recognition and reputation will continue to increase as competition in the markets in which we operate continues to develop. Our success in this area will depend on a wide range of factors, some of which are within our control and some of which are not. The factors affecting our brand recognition and reputation that are within our control include the following:
the efficacy of our marketing efforts;
our ability to maintain a high-quality, innovative, and error- and bug-free platform and similarly high quality client service;
our ability to maintain high satisfaction among clients (and our clients’ consumers);
the quality and perceived value of our platforms and services;
successfully implementing and developing new features and revenue streams;
our ability to obtain, maintain and enforce trademarks and other indicia of origin that are valuable to our brand;
our ability to successfully differentiate our platforms and services from competitors’ offerings;
our ability to integrate with POS systems;
our ability to provide our clients with accurate and actionable insights from the consumer data and feedback collected through our platform;
our compliance with laws and regulations;
our ability to address any environmental, social, and governance expectations of our various stakeholders;
our ability to provide client support; and
any actual or perceived data breach or data loss, or misuse or perceived misuse of our platforms.
In addition, our brand recognition and reputation may be affected by factors that are outside our control, such as:
actions of competitors or other third parties;
consumers’ experiences with retailers or brands using our platform;
public perception of cannabis and cannabis-related businesses;
positive or negative publicity, including with respect to events or activities attributed to us, our employees, partners or others associated with any of these parties;
interruptions, delays or attacks on our platforms; and
litigation or regulatory developments.
Damage to our reputation and loss of brand equity from one or more of the factors listed above 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 the value of our brand may be costly and time-consuming, and such efforts may not ultimately be successful.
We currently face intense competition in marketing and advertising services available to our clients, and we expect competition to further intensify as the cannabis industry continues to evolve.
The cannabis marketing and software services market is rapidly evolving and is currently characterized by intense competition, due in part to relatively low barriers to entry. We expect competition to further intensify in the future as cannabis continues to be legalized and regulated, new technologies are developed and new participants enter the cannabis CRM and marketing solutions market. Competitors for individual components of our service platforms include businesses both within and outside of the cannabis industry. These include businesses focused on marketing and customer engagement, commerce and POS solutions, and SaaS or other technology solutions for brands and retailers. In addition,
19

TABLE OF CONTENTS

if legal market for cannabis becomes more accepted and/or the regulatory regime for cannabis evolves, it may eliminate existing barriers preventing our clients from using traditional marketing and advertising channels. This could result in increased competition in our industry from both products and solutions offered by internet search engines and advertising networks, like Google, social media platforms, like Instagram and Facebook, various other newspaper, television, media companies, outdoor billboard advertising, and online merchant platforms, as well as new participants entering into the cannabis CRM and marketing services market. Such potential competitors may have substantially greater financial, technical, and other resources than existing market participants. Additionally, as consumers and cannabis industry clients demand richer data, integrations with other cannabis industry participants such as point-of-sale providers may become increasingly important. If we are unable to complete such new integrations as quickly as our competitors, or improve our existing integrations based on legacy systems, we may lose market share to such competitors. Our current and future competitors may also enjoy other competitive advantages, such as greater name recognition, more varied or more focused offerings, better market acceptance, and larger marketing budgets.
Additionally, as the legalization of cannabis continues, cannabis cultivators, product manufacturers and distributors could experience consolidation as existing cannabis businesses seek to obtain greater market share and purchasing power and new entrants seek to establish a significant market presence. Consolidation of the cannabis markets could reduce the size of our potential client base and give remaining clients greater bargaining or purchasing power. This may in turn erode the prices for access to our services and platform and result in decreased margins. Further, heightened competition between cannabis businesses could ultimately have a negative impact on the viability of individual market participants, which could reduce or eliminate their ability to purchase our services and solutions.
If we are unable to compete effectively for any of these reasons, we may be unable to maintain our operations or develop our products and solutions, and as a result our business and operating results may be adversely affected.
If we fail to manage our growth effectively, our brand, business and operating results could be harmed.
We have experienced rapid organic growth in our operations, which places substantial demands on management and our operational infrastructure. To manage the expected growth of our operations and personnel, we expect we will be required to improve existing, and implement new systems, procedures and controls including, among others, financial and operational systems. We will also be required to expand our finance, administrative and operations staff. We intend to continue making substantial investments in our sales, service and marketing workforce. As we continue to grow, we must effectively integrate, develop and motivate a significant number of new employees, while maintaining the beneficial aspects of our existing corporate culture, which we believe fosters innovation, teamwork and a passion for our products and clients. In addition, our revenue may not grow at the same rate as the expansion of our business. There can be no assurance that our current and planned personnel, systems, procedures and controls will be adequate to support our future operations or that management will be able to hire, train, retrain, motivate and manage required personnel. If we are unable to manage our growth effectively, the quality of our platform, efficiency of our operations, and management of our expenses could suffer, which could negatively impact our brand, business, profitability and operating results.
The growth of our business depends on our ability to accurately predict consumer trends, successfully offer new services, improve existing services and expand into new markets.
Our growth depends, in part, on our ability to successfully offer new platforms, products and services and improve and reposition our existing platforms and services to meet the requirements of our clients and their customers. This, in turn, depends on our ability to predict and respond to evolving consumer trends, demands and preferences. Our strategy is based on certain key trends and the projected growth of our key markets. However, historical trends may not be indicative of future trends and forecasts or estimated growth rates may not be accurate, in whole or part, or ever materialize. Further, underlying markets could decline, overall growth rates in our product categories could be slower than anticipated.
The offering of innovative new platforms, products and services and expansion into new offerings involves considerable costs. Any new platform, product or service offering may not generate sufficient consumer interest and sales to become profitable or to cover the costs of its development and promotion and, as a result, may reduce our operating income. In addition, any such unsuccessful effort may adversely affect our brand and reputation. If we are unable to anticipate, identify, develop or market new offerings, that respond to changes in consumer requirements and preferences, or if our new offerings fail to gain consumer acceptance, we may be unable to grow our business as anticipated, our sales may decline and our margins and profitability may decline or not improve. As a result, our business, financial condition, and results of operations may be materially and adversely affected.
20

TABLE OF CONTENTS

If we are unable to recruit, train, retain and motivate key personnel, we may not achieve our business objectives.
Our future success depends on our ability to recruit, train, retain and motivate key personnel, including our CEO, Jeffrey Harris, our CFO, Paul Sykes, our CTO, Navin Anand, and certain other key members of management. Competition for qualified personnel in the technology industry is intense. Additionally, we face additional challenges in attracting, retaining and motivating highly qualified personnel due to our relationship to the cannabis industry, which is rapidly evolving and has varying levels of social acceptance. Any failure to attract, train, retain and motivate qualified personnel could materially harm our operating results and growth prospects.
If our current marketing model is not effective in attracting new clients, we may need to employ higher-cost sales and marketing methods to attract and retain clients, which could adversely affect our profitability.
We use our sales team to build relationships with our client base. Our sales team builds and maintains relationships with clients primarily through phone, email and other virtual contact, which is typically designed to allow us to cost-effectively service a large number of clients. We may need to employ more resource-intensive sales methods, such as increasing sales teams, to continue to attract and retain clients, particularly as we increase the number of our clients and our client base employs more sophisticated marketing operations, strategies and processes. We have experience increased spending in connection with growing our sales, service and marketing operation and we expect to incur higher sales and marketing expenses, which could adversely affect our business and operating results.
We may be unable to scale and adapt our existing technology and network infrastructure in a timely or effective manner to ensure that our platform is accessible, which would harm our reputation, business and operating results.
It is critical to our success that clients and consumers within our geographic markets be able to access our platform at all times. We may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints, and distributed denial of service, or “DdoS,” fraud or security attacks. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve the availability of our platform, especially during peak usage times and as our products become more complex or dependent on integration with third parties, or as usage or traffic increases. If our platform is unavailable when our clients (or their consumers) attempt to access it or it does not load as quickly as they expect, they may seek other solutions and may seek to cancel and not renew subscriptions for our services. We expect to continue to make significant investments to maintain and improve the availability of our platform and to enable rapid releases of new features and products. To the extent that we do not effectively address capacity constraints, respond adequately to service disruptions, upgrade our systems as needed or continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results would be harmed.
We expect to continue making significant investments in the functionality, performance, reliability, design, security and scalability of our platform. We may experience difficulties with the development of our platform that could delay or prevent the implementation of new solutions and enhancements. Software development involves a significant amount of time and resources for our product development team, and we may not be able to continue making those investments in the future.
To the extent we are not able to continue successfully improving and enhancing our platform, our business could be adversely affected.
Real or perceived errors, failures, or bugs in our platform could adversely affect our operating results and growth prospects.
We update our platform on a frequent basis. Despite efforts to test our updates, errors, failures or bugs may not be found in our platform until after it is deployed to our clients. We have discovered and expect we will continue to discover errors, failures and bugs in our platform and anticipate that certain of these errors, failures and bugs will only be discovered and remediated after deployment to clients. Real or perceived errors, failures or bugs in our platform could result in negative publicity, security incidents, such as data breaches, government inquiries, loss of or delay in market acceptance of our platform, loss of competitive position, or claims by clients for losses sustained by them. In such an event, we may be required, or may choose, for client relations or other reasons, to expend additional resources in order to help correct the problem.
21

TABLE OF CONTENTS

We implement bug fixes and upgrades as part of our regular system maintenance, which may lead to system downtime. Even if we are able to implement the bug fixes and upgrades in a timely manner, any history of inaccuracies in the data we collect for our clients, or unauthorized access or damage to, or the loss, acquisition, or inadvertent release or exposure of confidential or other sensitive data could cause our reputation to be harmed and result in claims against us, and cannabis businesses may elect not to purchase our products or, in the case of existing clients, renew their agreements with us or we may incur increased insurance costs. The costs associated with any material defects or errors in our software or other performance problems may be substantial and could harm our operating results and growth prospects.
A distributed denial of service attack, ransomware attack, security breach or unauthorized data access could impair or incapacitate our information technology systems and delay or interrupt service to our clients and consumers, harm our reputation, or subject us to significant liability.
We may become subject to DdoS attacks, a technique used by hackers to take an internet service offline by overloading its servers. In addition, ransomware attacks against businesses of all sizes are becoming increasingly common. Further, as a result of the COVID-19 pandemic, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Our platform may be subject to DdoS, ransomware or other cybersecurity attacks in the future and we cannot guarantee that applicable recovery systems, security protocols, network protection mechanisms and other procedures are or will be adequate to prevent network and service interruption, system failure or data loss. Moreover, our platform could be breached if vulnerabilities in our platform are exploited by unauthorized third parties or others. Techniques used to obtain unauthorized access change frequently, and the size of DdoS attacks and the number and types of ransomware attacks are increasing. As a result, we may be unable to implement adequate preventative measures or stop such attacks while they are occurring. A DdoS attack, ransomware attack or security breach could delay or interrupt service to our clients and consumers and may deter the utilization of our platform.
We also use information technology and security systems to maintain the physical security of our facilities and to protect our proprietary and confidential information, including that of our clients, consumers, and employees. Accidental or willful security breaches or other unauthorized access to our facilities or information systems, or viruses, loggers, malware, ransomware, or other malfeasant code in our data or software, could compromise this information or render our systems and data unusable. Additionally, we rely third-party “cloud-based” providers and we are therefore dependent on the security systems of these providers. Any security breaches or other unauthorized access to our service providers’ facilities or systems, or viruses, loggers, malware, ransomware or other malfeasant code in their data or software, could expose us to information loss, and misappropriation of confidential information, and other security breaches. In addition, our employees, contractors, or other third parties with whom we do business may attempt to circumvent security measures in order to misappropriate personal information, confidential information or other data, or may inadvertently release or compromise such data. Because the techniques used to obtain unauthorized access to or sabotage security systems, or to obtain unauthorized access to data we or our contractors maintain, change frequently and are often not recognized until after an attack, we and our service providers may be unable to anticipate the techniques or implement adequate preventative measures.
Any actual or perceived DdoS attack, ransomware attack, security breach or other unauthorized access could damage our reputation and brand, result in decreased utilization of our platform, expose us to fines and penalties, government investigations, and a risk of litigation and possible liability, require us to expend significant capital and other resources to alleviate any resulting problems and otherwise to remediate the incident, and require us to expend increased cybersecurity protection costs. We expect to incur significant costs in an effort to detect and prevent security breaches and other security-related incidents. Numerous state, federal and foreign laws and regulations require companies to notify individuals and/or regulatory authorities of data security breaches involving certain types of personal data. Any disclosures of security breaches, pursuant to these laws or regulations or otherwise, could lead to regulatory investigations and enforcement and negative publicity, and may cause our clients and consumers to lose confidence in the effectiveness of our data security measures.
Additionally, our discovery of any security breach or other security-related incident, or our provision of any related notice, may be delayed or be perceived to have been delayed. Any of these impacts or circumstances arising from an actual or perceived attack, breach or other unauthorized access could materially and adversely affect our business, financial condition, reputation and relationships with clients and consumers.
22

TABLE OF CONTENTS

Furthermore, while our errors and omissions insurance policies include liability coverage for certain of these matters, if we experienced a significant security incident, we could be subject to claims or damages that exceed our insurance coverage. We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material and adverse effect on our business, including our financial condition, operating results, and reputation.
We rely upon cloud-based technologies provided by third parties, and technology systems and electronic networks supplied and managed by third parties, to operate our business, and interruptions or performance problems with these systems, technologies and networks may adversely affect our business and operating results.
We rely on technologies and services provided by third parties in order to host our cloud-based infrastructure that operates our business. If any of these services becomes unavailable or otherwise is unable to serve our requirements due to extended outages, interruptions, or facility closure, or because it is no longer available on commercially reasonable terms, our expenses could increase, our ability to manage finances could be interrupted and our operations otherwise could be disrupted or otherwise impacted until appropriate substitute services, if available, are identified, obtained, and implemented.
We do not control, or in some cases have limited control over, the operation of the data center facilities and infrastructure we use, and they are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, cyberattack, terrorism and similar other events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct, to adverse events caused by operator error, and to interruptions, data loss or corruption, and other performance problems due to various factors, including introductions of new capabilities, technology errors, infrastructure changes, DdoS attacks, or other security-related incidents. Changes in law or regulations applicable to data centers in various jurisdictions could also cause a disruption in service. Despite precautions taken at these facilities, the occurrence of a natural disaster, an act of terrorism or other act of malfeasance, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in lengthy interruptions in our platform operations and the loss, corruption of, unauthorized access to or acquisition of client or consumer data.
Our platform also depends on our ability to communicate through the public internet and electronic networks that are owned and operated by third parties. In addition, in order to provide our solutions on-demand and promptly, our computer equipment and network servers must be functional 24 hours per day, which requires access to telecommunications facilities managed by third parties and the availability of electricity, which we do not control. A severe disruption of one or more of these networks or facilities, including as a result of utility or third-party system interruptions, could impair our ability to process information and provide our solutions to our clients and consumers.
Any unavailability of, or failure to meet our requirements by, third-party data centers or other third-party technologies or services, or any disruption of the internet, utilities or the third-party networks or facilities that we rely upon, could impede our ability to make our platform accessible, harm our reputation, result in reduced traffic from consumers, cause us to issue refunds or credits to our clients, and subject us to potential liabilities. Any of these circumstances could adversely affect our business, reputation and operating results.
The impact of global, regional or local economic and market conditions may adversely affect our business, operating results and financial condition.
Our performance is subject to global economic conditions and economic conditions in one or more of our key markets, which impact spending by our clients and consumers. A majority of our clients’ access to capital, liquidity and other financial resources is constrained due to the regulatory restrictions applicable to cannabis businesses. As a result, these clients may be disproportionately affected by economic downturns. Clients may choose to allocate their spending to items other than our platform, especially during economic downturns.
Economic conditions may also adversely impact retail sales of cannabis. Declining retail sales of cannabis could result in our clients going out of business or deciding, to stop using our platform to conserve financial resources or move to different marketing solutions. Negative economic conditions may also affect third parties with whom we have entered into relationships and upon whom we depend in order to grow our business.
23

TABLE OF CONTENTS

Furthermore, economic downturns could also lead to limitations on our ability to obtain debt or equity financing on favorable terms or at all, reduced liquidity, decreases in the market price of SpringBig’s securities, decreases in the fair market value of our financial or other assets, and write-downs of and increased credit and collectability risk on our trade receivables, any of which could have a material adverse effect on our business, operating results or financial condition.
Negative economic conditions may be created or exacerbated by catastrophic events or health crises, including, among others, the ongoing COVID-19 pandemic.
Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses.
Our operations depend, in part, on our ability to protect our operations against damage or interruption from natural disasters, power or telecommunications failures, criminal acts and similar events. Despite precautions taken at our facilities, the occurrence of a natural disaster, an act of terrorism, vandalism or sabotage, spikes in usage volume or other unanticipated problems could result in lengthy interruptions in the availability of our platform. Even with current and planned disaster recovery arrangements, our business could be harmed. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce revenue, subject us to liability and lead to decreased usage of our platform and decrease sales of our marketing services, any of which could harm our business.
SpringBig’s operations and employees face risks related to health crises, such as the ongoing COVID-19 pandemic, that could adversely affect SpringBig’s financial condition and operating results. The COVID-19 pandemic could materially affect SpringBig’s operations, including at SpringBig’s headquarters or anywhere else SpringBig operates, and the business or operations of SpringBig’s clients, consumers, partners or other third parties with whom SpringBig conducts business.
In connection with the ongoing COVID-19 pandemic, governments have, at various times, implemented significant measures intended to control the spread of the virus, including closures, quarantines, travel restrictions, health mandates and social distancing directives, and fiscal stimulus, and legislation designed to deliver monetary aid and other relief. In response to the risks posed by the COVID-19 pandemic and to comply with applicable governmental orders, SpringBig has taken active measures to promote the health and safety of our employees. These and other operational changes SpringBig has implemented or may implement in the future may negatively impact productivity and disrupt SpringBig’s business.
To the extent that these restrictions are reinstated and/or remain in place, additional prevention and mitigation measures are implemented in the future, or there is uncertainty about the effectiveness of these or any other measures to contain or treat COVID-19, there is likely to be an adverse impact on global economic conditions and consumer confidence and spending, which could materially and adversely affect SpringBig’s operations as well as SpringBig’s relationships with clients and consumers.
Reinstating shelter-in-place orders and similar regulations promulgated in response to the COVID-19 pandemic could impact the ability of SpringBig’s clients to operate their businesses. Such events have in the past caused, and may in the future cause, a temporary closure or disruption of SpringBig’s clients’ businesses, either due to government mandate or voluntary preventative measures. In the event of mandated business operations limitations, clients may not be able to withstand prolonged interruptions to their businesses, and may be forced to go out of business. Even if SpringBig’s clients are able to continue to operate their businesses, many may operate with limited hours and capacity and other limitations. Any limitations on or disruptions or closures of SpringBig’s clients’ businesses could in turn adversely affect SpringBig’s business. Further, we may experience a decrease in new clients due to a lack of financial resources or a decline in new markets as businesses and financial markets deal with the impact of COVID-19 and efforts to curb the pandemic. Further, these conditions may impact our ability to access financial markets to obtain the necessary funding to expand our business as currently contemplated, which may adversely affect our liquidity and working capital.
The extent of COVID-19’s effect on SpringBig’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic and steps taken to prevent its resurgence or further spread, all of which are still uncertain and difficult to predict considering the rapidly evolving landscape. Given the continuing uncertainty about the pandemic, its duration, and efforts to curb its spread, it is not currently possible to fully ascertain the overall impact of COVID-19 on SpringBig’s business. However, if the pandemic continues to persist as a severe worldwide health crisis, the disease may harm SpringBig’s business, and may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
24

TABLE OF CONTENTS

Fluctuations in our quarterly and annual operating results may adversely affect our business and prospects.
You should consider our business and prospects in light of the risks and difficulties we encounter in the uncertain and rapidly evolving market for our solutions. Because the cannabis CRM, marketing services and technology markets are new and evolving, predicting their future growth rate and size is difficult. This reduces our ability to accurately evaluate our future prospects and forecast quarterly or annual performance. In addition to the other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include:
our ability to attract new clients and retain existing clients;
our ability to accurately forecast revenue and appropriately plan our expenses;
the effects of increased competition on our business;
our ability to successfully expand in existing markets and successfully enter new markets;
the impact of global, regional or economic conditions;
the ability of licensed cannabis markets to successfully grow and outcompete illegal cannabis markets;
our ability to protect our intellectual property;
our ability to maintain and effectively manage an adequate rate of growth;
our ability to maintain and increase traffic to our platform;
costs associated with defending claims, including intellectual property infringement claims and related judgments or settlements;
changes in governmental or other regulation affecting our business;
interruptions in platform availability and any related impact on our business, reputation or brand;
the attraction and retention of qualified personnel;
the effects of natural or man-made catastrophic events and/or health crises (including COVID-19); and
the effectiveness of our internal controls.
Investors should not rely on outdated financial projections.
In connection with the business combination, we disclosed certain projections of SpringBig’s potential financial performance in future years. As previously disclosed, in connection with the sale process, certain financial forecasts for fiscal years 2021 through 2024 were prepared by Legacy SpringBig’s management and made available to Tuatara. Also, as previously disclosed, the projections were not prepared with a view toward public disclosure or with a view toward complying with U.S. GAAP, the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Readers were cautioned not to rely on the prospective financial information because actual results are likely to differ materially from the prospective financial information. We reiterate our prior caution not to rely on the previously published and now outdated financial projections. We have not undertaken any obligation to publish any financial projections.
We may improve our products and solutions in ways that forego short-term gains.
We seek to provide the best experience for the clients who use our platform. Some of our changes may have the effect of reducing our short-term revenue or profitability if we believe that the benefits will ultimately improve our business and financial performance over the long term. Any short-term reductions in revenue or profitability could be greater than planned or the changes mentioned above may not produce the long-term benefits that we expect, in which case our business and operating results could be adversely affected.
We currently have clients across the United States and Canada using our platform. We anticipate growing our business, in part, by continuing to expand our foreign operations. As we continue our expansion, we may enter new foreign markets where we have limited or no experience marketing and deploying our platform. If we fail to launch or manage our foreign operations successfully, our business may suffer. Additionally, as our foreign operations expand, or more of our expenses are denominated in currencies other than the U.S. dollar, our operating results may
25

TABLE OF CONTENTS

be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business. In addition, as our foreign operations continue to grow, we are subject to a variety of risks inherent in doing business internationally, including:
political, social, and economic instability;
risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements, and enforcement;
fluctuations in currency exchange rates;
higher levels of credit risk and payment fraud;
complying with tax requirements of multiple jurisdictions;
enhanced difficulties of integrating any foreign acquisitions;
the ability to present our content effectively in foreign languages;
complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions, and termination requirements;
reduced protection for intellectual property rights in some countries;
difficulties in staffing and managing global operations and the increased travel, infrastructure, and compliance costs associated with multiple foreign locations;
regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash;
import and export restrictions and changes in trade regulation;
complying with statutory equity requirements; and
complying with the U.S. Foreign Corrupt Practices Act of 1977, as amended and the Corruption of Public Officials Act (Canada), and similar laws in other jurisdictions.
We are subject to industry standards, governmental laws, regulations and other legal obligations, particularly related to privacy, data protection and information security, and any actual or perceived failure to comply with such obligations could harm our business.
We are subject to regulation by various federal, state, provincial, local and foreign governmental authorities, including those responsible for monitoring and enforcing employment and labor laws, anti-bribery laws, lobbying and election laws, securities laws and tax laws. These laws and regulations are subject to change over time and thus we must continue to monitor and dedicate resources to ensure continued compliance.
In addition, our business is subject to regulation by various federal, state, provincial and foreign governmental agencies responsible for monitoring and enforcing privacy and data protection laws and regulations. Numerous foreign, federal and state laws and regulations govern collection, dissemination, use and confidentiality of personally identifiable health information, including state privacy and confidentiality laws (including state laws requiring disclosure of breaches); federal and state consumer protection and employment laws; the Health Insurance Portability and Accountability Act of 1996, or HIPAA; and European and other foreign data protection laws.
We receive, store, process, and use personal information and other user content. The regulatory framework for privacy issues worldwide, including in the United States, is rapidly evolving and is likely to remain uncertain for the foreseeable future, as many new laws and regulations regarding the collection, use and disclosure of personally identifiable information, or PII, and other data have been adopted or are under consideration and existing laws and regulations may be subject to new and changing interpretations. In the United States, the Federal Trade Commission and many state attorneys general are applying federal and state consumer protection laws to impose standards for the online collection, use and dissemination of data. The California Consumer Privacy Act of 2018, or CCPA, which became effective January 1, 2020, imposes significant additional requirements with respect to the collection of personal information from California residents. The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action with statutory damages for
26

TABLE OF CONTENTS

certain data breaches, thereby potentially increasing risks associated with a data breach. It remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. Additionally, a new privacy law, the California Privacy Rights Act, or CPRA, significantly modified the CCPA, which has resulted in further uncertainty and requiring us to incur additional costs and expenses. The CPRA created a new California state agency charged with enforcing state privacy laws, and there is uncertainty about potential enforcement actions that the new agency may take in the future. The effects of the CCPA and the CPRA remain far-reaching, and depending on final regulatory guidance and related developments, may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
We are also currently subject to a variety of, and may in the future become subject to additional U.S. federal, state and local laws and regulations on advertising that are continuously evolving and developing, including the Telephone Consumer Protection Act, or the TCPA, the Telemarketing Sales Rule, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, or the CAN-SPAM Act, and, at the state level, the CCPA (as described above), the Virginia Consumer Data Protection Act of 2021, or VCDPA, and the Colorado Privacy Act, or CPA. Many states are discussing potentially adopting similar comprehensive privacy legislation and we expect many of these will be implemented over the course of the next few years. These laws and regulations directly impact our business and require ongoing compliance, monitoring and internal and external audits as they continue to evolve, and may result in ever-increasing public and regulatory scrutiny and escalating levels of enforcement and sanctions. Subsequent changes to data protection and privacy laws and regulations could also impact how we process personal information and, therefore, limit the effectiveness of our product offerings or our ability to operate or expand our business, including limiting strategic relationships that may involve the sharing of personal information.
Many foreign countries and governmental bodies, including Canada and other relevant jurisdictions where we conduct or may, in the future, conduct business, have laws and regulations concerning the collection and use of PII and other data obtained from their residents or by businesses operating within their jurisdiction. These laws and regulations often are more restrictive than those in the United States Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions, internet protocol addresses and other types of data. In Canada, the federal Personal Information Protection and Electronic Documents Act, or PIPEDA, governs the collection, use and disclosure of PII in many provinces in Canada, and though it is silent with respect to territorial reach, the Federal Court of Canada has found that PIPEDA will apply to businesses established in other jurisdictions if there is a “real and substantial connection” between the organization’s activities and Canada. Provincial privacy commissioners take a similar approach to the interpretation and application of provincial private-sector privacy laws equivalent to PIPEDA. Further, Canada has robust anti-spam legislation. Organizations sending commercial electronic messages to individuals must either have express consent from the individual in the prescribed form or the situation must qualify as an instance of implied consent or other authorization set out in Canada’s Anti-Spam Legislation, or CASL. The penalties for non-compliance under CASL are significant and the regulator, the Canadian Radio- Television and Telecommunications Commission, is active with respect to enforcement.
Although we are working to comply with those federal, state, provincial and foreign laws and regulations, industry standards, governmental standards, contractual obligations and other legal obligations that apply to us, those laws, regulations, standards and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or the features of our applications or platform. Any failure or perceived failure by us or our contractors to comply with federal, state, provincial or foreign laws or regulations, industry standards, contractual obligations or other legal obligations, or any actual or suspected security incident, whether or not resulting in loss of, unauthorized access to, or acquisition, alteration, destruction, release or transfer of PII or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity and could cause employees, clients and consumers to lose trust in us, which could have an adverse effect on our reputation and business. Any inability or perceived inability (even if unfounded) on our part to adequately address privacy, data protection, and information security concerns, or comply with applicable laws, regulations, policies, industry standards, governmental standards, contractual obligations, or other legal obligations, could result in additional cost and liability to us, damage our reputation, inhibit sales, restrict our ability to utilize collected personal information, and adversely affect our business.
27

TABLE OF CONTENTS

We also expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, Canada and other jurisdictions, and we cannot yet determine the impact such future laws, regulations and standards may have on our business. Future laws, regulations, standards and other obligations, or amendments or changes in the interpretation of existing laws, regulations, standards and other obligations, could impair our or our clients’ ability to collect, use, disclose or otherwise process information relating to employees or consumers, which could decrease demand for our applications, increase our costs and impair our ability to maintain and grow our client and consumer bases and increase revenue. Such laws and regulations may require us to implement privacy and security policies, permit users to access, correct and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and, in some cases, obtain individuals’ consent to use PII or other data for certain purposes. In addition, a foreign government could require that any data collected in a country not be transferred or disseminated outside of that country, or impose restrictions or conditions upon such dissemination, and we may face difficulty in complying with any such requirements for certain geographic regions. Indeed, many privacy laws, such as those in force in Canada, already impose these requirements. If we fail to comply with federal, state, provincial and foreign data privacy laws and regulations, our ability to successfully operate our business and pursue our business goals could be harmed. Furthermore, due to our acceptance of credit cards, we are subject to the PCI- DSS, which is designed to protect the information of credit card users.
In the event our determinations are challenged and found to have been incorrect, we may be subject to unfavorable publicity or claims by one or more state attorneys general, federal regulators, or private plaintiffs, any of which could damage our reputation, inhibit sales and adversely affect our business.
Governmental regulation of the internet continues to develop, and unfavorable changes could substantially harm our business and operating results.
We are subject to general business regulations and laws as well as federal, state, provincial and foreign laws specifically governing the internet. Existing and future laws and regulations, narrowing of any existing legal safe harbors, or previous or future court decisions may impede the growth of the internet or online products and solutions, and increase the cost of providing online products and solutions. These laws may govern, among other issues, taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential internet access and the characteristics and quality of offerings. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the internet or online services. There is also a risk that these laws may be interpreted and applied in conflicting ways across jurisdictions, and in a manner that is not consistent with our current practices. Unfavorable resolution of these issues may limit our business activities, expose us to potential legal claims or cause us to spend significant resources on ensuring compliance, any of which could harm our business and operating results.
Future investments in our growth strategy, including acquisitions, could disrupt our business and adversely affect our operating results, financial condition and cash flows.
We are seeking to expand using both organic and M&A growth strategies in keeping with the changing regulatory landscape in the U.S. Expanding accounts with existing clients, adding new clients, entering new markets, adding new features and functionality to our platform and/or acquisitions may involve significant investments of capital, time, resources and managerial attention. There can be no assurance that we will successfully implement any new products or solutions. External factors, such as additional regulatory compliance obligations, may also affect the successful implementation of new products and solutions through our platform.
Additionally, we may make acquisitions that could be material to our business, operating results, financial condition and cash flows. Our ability as an organization to successfully acquire and integrate technologies, services, platforms or businesses is unproven. Acquisitions involve many risks, including the following:
an acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition;
28

TABLE OF CONTENTS

we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us, and potentially across different cultures and languages in the event of a foreign acquisition;
the acquired business may not perform at levels and on the timelines anticipated by our management and/or we may not be able to achieve expected synergies;
an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;
an acquisition may result in a delay or reduction of sales for both us and the company we acquire due to uncertainty about continuity and effectiveness of products or support from either company;
we may encounter difficulties in, or may be unable to, successfully sell any acquired products or services;
an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions;
potential strain on our financial and managerial controls and reporting systems and procedures;
potential known and unknown liabilities associated with an acquired company;
if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants;
the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions;
to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing equity holders may be diluted and earnings per share may decrease; and
managing the varying intellectual property protection strategies and other activities of an acquired company.
We may not succeed in addressing these or other risks or any other problems encountered in connection with the integration of any acquired business. The inability to integrate successfully the business, technologies, products, personnel or operations of any acquired business, or any significant delay in achieving integration, could have a material adverse effect on our business, operating results, financial condition and cash flows.
We may need to raise additional capital, which may not be available on favorable terms, if at all, causing dilution to our stockholders, restricting our operations or adversely affecting our ability to operate our business.
The funding contemplated by the Notes and Warrants Purchase Agreement and Purchase Agreement may not be sufficient and, in the course of running our business, we may need to raise capital, certain forms of which may cause dilution to our stockholders. Further, the likelihood that the Investor will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Investor will be unlikely to exercise their Warrants. If our need is due to unforeseen circumstances or material expenditures or if our operating results are worse than expected, then we cannot be certain that we will be able to obtain additional financing on favorable terms, if at all, and these additional financings could cause further dilution to our stockholders. Due to the current legal status of cannabis under U.S. federal law, we have experienced, and may in the future experience, difficulty attracting additional debt or equity financing. In addition, the current legal status of cannabis may increase the cost of capital now and in the future. Debt financing, if available, may involve agreements that include equity conversion rights, covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, expending capital, or declaring dividends, or that impose financial covenants on us that limit our ability to achieve our business objectives. Debt financings may contain provisions, which, if breached, may entitle lenders to accelerate repayment of loans, and there is no assurance that we would be able to repay such loans in such an event or prevent the foreclosure of security interests granted pursuant to such debt financing. If we need but cannot raise additional capital on acceptable terms, then we may not be able to meet our business objectives, our stock price may fall, and you may lose some or all of your investment.
29

TABLE OF CONTENTS

SpringBig may be unable to obtain additional financing to fund its operations or growth.
SpringBig may require additional financing to fund its operations or growth. The failure to secure additional financing could have a material adverse effect on the continued development or growth of SpringBig. Any funds we raise may not be sufficient to enable us to continue to implement our long-term business strategy. Further, our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States. We may not be able to find financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, such inability to obtain financing when needed may make it more difficult for us to operate our business or implement our growth plans or respond to business challenges could be significantly impaired, and our business may be harmed.
Our obligations to the Investor in our Notes and Warrants are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets. If that were to happen, we could be forced to curtail, or even to cease, our operations.
On April 29, 2022, the Company entered into the Notes and Warrants Purchase Agreement with the Investor, pursuant to which the Company, on June 14, 2022, issued the First Tranche Note and may issue the Second Tranche Note to the Investor. Simultaneously, Legacy SpringBig entered into a Guaranty Agreement to guarantee the Company’s obligations under the Notes and the Company and Legacy SpringBig entered into Security Agreement, pursuant to which the Investor was granted a security interest in all of the assets of the Company and Legacy SpringBig to secure repayment of amounts due under the Notes. As a result, if we default on our obligations under the Notes, the Investor could foreclose on its security interests and liquidate or take possession of some or all of the assets of the Company, Legacy SpringBig and its subsidiaries, which would harm our business, financial condition and results of operations and could require us to curtail, or even to cease our operations.
The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations.
The agreements related to the sale of the Notes and Warrants contain a number of restrictive covenants that may impose significant operating and financial restrictions on us while Notes remain outstanding or unless the restrictions are waived by consent of each noteholder, including restrictions on our ability to incur additional indebtedness and guarantee indebtedness; incur liens or allow mortgages or other encumbrances; prepay, redeem, or repurchase certain other debt; pay dividends or make other distributions or repurchase or redeem our capital stock; sell assets or enter into or effect 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); issue additional equity (outside of the Facility, issuances under our equity compensation plan and other limited exceptions); enter into variable rate transactions (exclusive of the Facility); and adopt certain amendments to our governing documents, among other restrictions. In addition, the terms of the Notes restrict our ability to issue additional equity capital. The Company does not have the ability to prepay the Notes prior to maturity except to the limited extent of proceeds from the Cantor Equity Facility to the extent available.
A breach of the covenants or restrictions under the agreements governing our indebtedness could result in an event of default under these agreements. As a result of these restrictions, we may be limited in how we conduct our business, unable to raise additional debt or equity financing to operate during general economic or business downturns and/or unable to compete effectively or to take advantage of new business opportunities.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws, regulations and rules enacted by national, regional and local governments and the Nasdaq stock exchange. In particular, we are required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.
30

TABLE OF CONTENTS

We may be subject to potential adverse tax consequences both domestically and in foreign jurisdictions.
We are a Delaware corporation that is treated as a C-corporation for U.S. federal and most applicable state and local income tax purposes. We are subject to taxes, such as income, payroll, sales, use, value-added, property and goods and services taxes, in both the United States and various foreign jurisdictions. Our domestic and foreign tax liabilities are subject to various jurisdictional rules regarding the timing and allocation of revenue and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file and to changes in tax laws. Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities. From time to time, we may be subject to income and non-income tax audits. While we believe we have complied, and will continue to comply, with all applicable income tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law and assess us with additional taxes. Should we be assessed with additional taxes, there could be a material adverse effect on our business, results of operations, and financial condition. In addition, audits may require ongoing time and attention from our management, which could limit their ability to focus on other aspects of our business and impact our business in the future.
The ability of SpringBig to utilize net operating loss and tax credit carryforwards is conditioned upon SpringBig attaining profitability and generating taxable income. SpringBig has incurred significant net losses since inception and it is anticipated that SpringBig will continue to incur significant losses. Additionally, SpringBig’s ability to utilize net operating loss and tax credit carryforwards to offset future taxable income may be limited.
As of December 31, 2021, SpringBig had approximately $12 million of U.S. federal net operating loss carryforwards available to reduce future taxable income, which can be carried forward indefinitely. The Tax Cuts and Jobs Act (the “Tax Act”) included a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017 and the elimination of carrybacks of net operating losses. In addition, net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383 of the Code, respectively, and similar provisions of state law. Under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income or tax may be limited. In general, an “ownership change” will occur if there is a cumulative change in ownership by “5% shareholders” that exceeds 50 percentage points over a rolling three-year period. If SpringBig has experienced an ownership change at any time since its incorporation, SpringBig may already be subject to limitations on its ability to utilize its existing net operating loss carryforwards and other tax attributes to offset taxable income or tax liability. In addition, the business combination, and future changes in SpringBig’s stock ownership, which may be outside of SpringBig’s control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit SpringBig’s use of accumulated state tax attributes. As a result, even if SpringBig earns net taxable income in the future, its ability to use its pre-change net operating loss carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to SpringBig.
Changes in accounting standards or other factors could negatively impact our future effective tax rate.
Our future effective tax rate may be affected by such factors as changing interpretation of existing laws or regulations, the impact of accounting for equity-based compensation, the impact of accounting for business combinations, changes in our international organization, and changes in overall levels of income before tax. In addition, in the ordinary course of our global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain.
Although we believe that our tax estimates are reasonable, we cannot ensure that the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax provisions and accruals.
Changes in tax laws or regulations and compliance in multiple jurisdictions may have a material adverse effect on our business, cash flow, financial condition or operating results.
We are subject to the income tax laws of the United States and Canada. New income, sales, use or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time, which could affect the tax treatment of our U.S. and foreign earnings. Any new taxes could adversely affect our domestic and foreign business operations, and our business and financial performance. In addition, existing tax laws, statutes, rules, regulations, or ordinances, such as Section 280E of the Code, discussed below, could be interpreted, changed, modified or applied adversely to us.
31

TABLE OF CONTENTS

Furthermore, changes to the taxation of undistributed foreign earnings could change our future intentions regarding reinvestment of such earnings. The foregoing items could have a material adverse effect on our business, cash flow, financial condition or operating results. Requirements as to taxation vary substantially among jurisdictions. Complying with the tax laws of these jurisdictions can be time consuming and expensive and could potentially subject us to penalties and fees in the future if we were to inadvertently fail to comply. If we were to inadvertently fail to comply with applicable tax laws, this could have a material adverse effect on our business, results of operations and financial condition.
Certain taxing authorities may successfully assert that SpringBig should have collected or that in the future SpringBig should collect sales and use or similar taxes for certain services which could adversely affect our results of operations.
We do not collect sales and use or similar taxes in the United States or Canada, based on our determination that such taxes are not applicable to our platform. Based on the U.S. Supreme Court’s ruling in South Dakota v. Wayfair, certain state taxing authorities may assert that SpringBig had economic nexus with their state and was required to collect sales and use or similar taxes with respect to certain past services that SpringBig has provided (or with respect to future services that SpringBig will provide), which could result in tax assessments and penalties and interest. A successful assertion that SpringBig should be collecting additional sales and use or similar taxes or remitting such sales and use or similar taxes directly to states or other jurisdictions could have an adverse effect on SpringBig and its business.
Additional Risks Related to the Cannabis Industry
Cannabis remains illegal under federal law, and therefore, strict enforcement of federal laws regarding cannabis would likely result in our inability to execute our business plan.
Cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is a Schedule I controlled substance under the CSA. Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. The U.S. Supreme Court has ruled that the federal government has the authority to regulate and criminalize the sale, possession and use of cannabis, even for individual medical purposes, regardless of whether it is legal under state law. For over five years, however, the U.S. government has not prioritized the enforcement of those laws against cannabis companies complying with state law and their vendors. No reversal of that policy of prosecutorial discretion is expected under the Biden administration, although prosecutions against state-legal entities cannot be ruled out.
On January 4, 2018, then U.S. Attorney General Jeff Sessions issued a memorandum for all U.S. Attorneys (the “Sessions Memo”) rescinding certain past DOJ memoranda on cannabis law enforcement, including the Memorandum by former Deputy Attorney General James Michael Cole (the “Cole Memo”) issued on August 29, 2013, under the Obama administration. Describing the criminal enforcement of federal cannabis prohibitions against those complying with state cannabis regulatory systems as an inefficient use of federal investigative and prosecutorial resources, the Cole Memo gave federal prosecutors discretion not to prosecute state law compliant cannabis companies in states that were regulating cannabis, unless one or more of eight federal priorities were implicated, including use of cannabis by minors, violence, or the use of federal lands for cultivation. The Sessions Memo, which remains in effect, states that each U.S. Attorney’s Office should follow established principles that govern all federal prosecutions when deciding which cannabis activities to prosecute. As a result, federal prosecutors could and still can use their prosecutorial discretion to decide to prosecute even state-legal cannabis activities. Since the Sessions Memo was issued nearly three years ago, however, U.S. Attorneys have generally not prioritized the targeting of state law compliant entities.
Attorney General William Barr testified in his confirmation hearing on January 15, 2019, that he would not upset “settled expectations,” “investments,” or other “reliance interest[s]” arising as a result of the Cole Memo, and that he did not intend to devote federal resources to enforce federal cannabis laws in states that have legalized cannabis “to the extent people are complying with the state laws.” He stated: “My approach to this would be not to upset settled expectations and the reliance interests that have arisen as a result of the Cole Memorandum and investments have been made and so there has been reliance on it, so I don’t think it’s appropriate to upset those interests.” He also implied that the CSA’s prohibitions of cannabis may be implicitly nullified in states that have legalized cannabis: “[T]he current situation … is almost like a back-door nullification of federal law.” Industry observers generally have not interpreted Attorney General Barr’s comments to suggest that the DOJ would proceed with cases against participants who entered the state-legal industry after the Cole Memo’s rescission.
32

TABLE OF CONTENTS

As such, we cannot assure that each U.S. Attorney’s Office in each judicial district where we operate will not choose to enforce federal laws governing cannabis sales against state-legal companies like our business clients. The basis for the federal government’s lack of recent enforcement with respect to the cannabis industry extends beyond the strong public sentiment and ongoing prosecutorial discretion. Since 2014, versions of the U.S. omnibus spending bill have included a provision prohibiting the DOJ, which includes the Drug Enforcement Administration, from using appropriated funds to prevent states from implementing their medical-use cannabis laws. In USA vs. McIntosh, the U.S. Court of Appeals for the Ninth Circuit held that the provision prohibits the DOJ from spending funds to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws. The court noted that, if the spending bill provision were not continued, prosecutors could enforce against conduct occurring during the statute of limitations even while the provision was previously in force. Other courts that have considered the issue have ruled similarly, although courts disagree about which party bears the burden of proof of showing compliance or noncompliance with state law. Certain of our clients that are retailers currently (and may in the future) sell adult-use cannabis, if permitted by such state and local laws now or in the future, and therefore may be outside any protections extended to medical-use cannabis under the spending bill provision. This could subject such retailer clients to greater and/or different federal legal and other risks as compared to businesses where cannabis is sold exclusively for medical use, which could in turn materially adversely affect our business. Furthermore, any change in the federal government’s enforcement posture with respect to state-licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.
On March 11, 2021, Merrick Garland was sworn in as the U.S. Attorney General. During his campaign, President Biden stated a policy goal to decriminalize possession of cannabis at the federal level, but he has not publicly supported the full legalization of cannabis. In response to questions posed by Senator Cory Booker, Merrick Garland stated during February 2021 congressional testimony that he would reinstitute a version of the Cole Memorandum. He reiterated the statement that the Justice Department under his leadership would not pursue cases against Americans “complying with the laws in states that have legalized and are effectively regulating marijuana”, in written responses to the Senate Judiciary Committee provided around March 1. It is not yet known whether the Department of Justice under President Biden and Attorney General Garland, will re-adopt the Cole Memorandum or announce a substantive marijuana enforcement policy. Justice Garland indicated at a confirmation hearing before the United States Senate that it did not seem to him to be a useful use of limited resources to pursue prosecutions in states that have legalized and that are regulating the use of marijuana, either medically or otherwise. It is unclear what impact, if any, the current or any new administration will or would have on U.S. federal government enforcement policy on cannabis. Nonetheless, there is no guarantee that the position of the Department of Justice will not change.
Industry observers are hopeful that a Democrat-controlled Senate, along with a Biden presidency, will increase the chances of federal cannabis policy reform. Numerous bills have attracted attention, including the Marijuana Opportunity Reinvestment and Expungement Act (the “MORE Act”), which was originally co-sponsored by now Vice President Harris in the Senate, and the Secure and Fair Enforcement Banking Act, which recently passed the House of Representatives but has not yet passed the Senate. Senate Majority leader Chuck Schumer also has proposed draft legislation that would legalize cannabis at the federal level (the “Cannabis Administration and Opportunity Act”). Representative Nancy Mace (R. South Carolina) introduced proposed draft legislation to decriminalize and tax cannabis at the federal level, with hopes that her “States Reform Act” will garner bi-partisan support. However, we cannot provide assurances about the content, timing or chances of passage of a bill legalizing cannabis or liberalizing cannabis regulations. Accordingly, we cannot predict the timing of any change in federal law or possible changes in federal enforcement. In the event that the federal government were to reverse its long-standing hands-off approach to the state legal cannabis markets and start more broadly enforcing federal law regarding cannabis, we would likely be unable to execute our business plan, and our business and financial results would be adversely affected.
Our business and our clients are subject to a variety of U.S. and foreign laws regarding financial transactions related to cannabis, which could subject our clients to legal claims or otherwise adversely affect our business.
We and our clients are subject to a variety of laws and regulations in the United States regarding financial transactions. Violations of the U.S. anti-money laundering (AML) laws require proceeds from enumerated criminal activity, which includes trafficking in cannabis in violation of the CSA. Financial institutions that both we and our clients rely on are subject to the Bank Secrecy Act, as amended by Title III of the USA Patriot Act. In Canada, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended and the rules and regulations thereunder and the Criminal Code (Canada) apply. The penalties for violation of these laws include imprisonment, substantial fines and forfeiture.
33

TABLE OF CONTENTS

In 2014, the DOJ under the Obama administration directed federal prosecutors to exercise restraint in prosecuting AML violations arising in the state legal cannabis programs and to consider the federal enforcement priorities enumerated in the Cole Memo when determining whether to charge institutions or individuals based upon cannabis-related activity. Around the same time, the Treasury Department issued guidance that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act. Then-Attorney General Sessions’s rescission of the DOJ’s guidance on the state cannabis programs in early 2018 increased uncertainty and heighted the risk that federal law enforcement authorities could seek to pursue money laundering charges against entities, or individuals, engaged in supporting the cannabis industry. On January 31, 2018, the Treasury Department issued additional guidance that the 2014 Guidance would remain in place until further notice, despite the rescission of the DOJ’s earlier guidance memoranda.
We are subject to a variety of laws and regulations in the United States, Canada and elsewhere that prohibit money laundering, including the Proceeds of Crime and Terrorist Financing Act (Canada) and the Money Laundering Control Act (U.S.), as amended, and the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by governmental authorities in the United States, Canada or any other jurisdiction in which we have business operations or to which we export our offerings. If any of our clients’ business activities, any dividends or distributions therefrom, or any profits or revenue accruing thereby are found to be in violation of money laundering statutes, our clients could be subject to criminal liability and significant penalties and fines. Any violations of these laws, or allegations of such violations, by our clients could disrupt our operations and involve significant management distraction and expenses. As a result, a significant number of our clients facing money laundering charges could materially affect our business, operations and financial condition. Additionally, proceeds from our clients’ business activities, including payments we have received from those clients, could be subject to seizure or forfeiture if they are found to be illegal proceeds of a crime transmitted in violation of anti-money laundering laws, which could have a material adverse effect on our business. Finally, if any of our clients are found to be violating the above statutes, this could have a material adverse effect on their ability to access or maintain financial services, as discussed in detail below, which could, in turn, have a material adverse effect on our business.
We are dependent on our banking relations, and we may have difficulty accessing or consistently maintaining banking or other financial services due to our connection with the cannabis industry.
Although we do not grow or sell cannabis products, our general connection with the cannabis industry may hamper our efforts to do business or establish collaborative relationships with others that may fear disruption or increased regulatory scrutiny of their own activities.
We are dependent on the banking industry to support the financial functions of our products and solutions. Our business operating functions including payroll for our employees, real estate leases, and other expenses are handled and reliant on traditional banking. We require access to banking services for both us and our clients to receive payments in a timely manner. Lastly, to the extent we rely on any lines of credit, these could be affected by our relationships with financial institutions and could be jeopardized if we lose access to a bank account. Important components of our offerings depend on client accounts and relationships, which in turn depend on banking functions. Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, issued guidelines to banks in February 2014 that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act. While the federal government has generally not initiated financial crimes prosecutions against state-law compliant cannabis companies or their vendors, the government theoretically could, at least against companies in the adult-use markets. The continued uncertainty surrounding financial transactions related to cannabis activities and the subsequent risks this uncertainty presents to financial institutions may result in their discontinuing services to the cannabis industry or limit their ability to provide services to the cannabis industry or ancillary businesses providing services to the cannabis industry.
As a result of federal-level illegality and the risk that providing services to state-licensed cannabis businesses poses to banks, cannabis-related businesses face difficulties accessing banks that will provide services to them. When cannabis businesses are able to find a bank that will provide services, they face extensive client due diligence in light of complex state regulatory requirements and guidance from FinCEN, and these reviews may be time-consuming and costly, potentially creating additional barriers to financial services for, and imposing additional compliance requirements on, us and our clients. FinCEN requires a party in trade or business to file with the U.S. Internal Revenue Service, or the IRS, a Form 8300 report within 15 days of receiving a cash payment of over $10,000. While we do not receive cash payments
34

TABLE OF CONTENTS

for the products we sell, if we fail to comply with these laws and regulations, the imposition of a substantial penalty could have a material adverse effect on our business, results of operations and financial condition. We cannot assure that our strategies and techniques for designing our products and solutions for our clients will operate effectively and efficiently and not be adversely impacted by any refusal or reluctance of banks to serve businesses that grow and sell cannabis products. A change in banking regulations or a change in the position of the banking industry that permits banks to serve businesses that grow and sell cannabis products may increase competition for us, facilitate new entrants into the industry offering platforms, products or solutions similar to those that we offer, or otherwise adversely affect our results of operations. Also, the inability of potential clients in our target market to open accounts and otherwise use the services of banks or other financial institutions may make it difficult for us to conduct business, including receiving payments in a timely manner.
We do not sell cannabis, or products that contain cannabis; accordingly, our company is not part of the cannabis industry that would be restricted from using federal and federally insured banks. However, because of the fact that our revenue is generated largely from companies licensed as operators in the cannabis industry, banks have and may continue to consider us to be part of the cannabis industry that is subject to banking restrictions. If we were to lose any of our banking relationships or fail to secure additional banking relationships in the future, we could experience difficulty and incur increased costs in the administration of our business, paying our employees, accepting payments from clients, each of which may adversely affect our reputation or results of operations. Additionally, the closure of many or one of our bank accounts due to a bank’s reluctance to provide services to a business working with state legal cannabis businesses would require significant management attention from SpringBig and could materially adversely affect our business and operations. In addition to banks and financial institutions, merchant processors may take a similar view of the risks of working with SpringBig since we provide services to cannabis businesses, and loss of any of our merchant processor relationships could have similar results. Moreover, Visa reportedly prohibits processing of transactions involving cannabis on its network, and Mastercard has reportedly stated that it is evaluating the inconsistency between U.S. state and federal cannabis law.
We may have difficulty using bankruptcy courts due to our involvement in the regulated cannabis industry.
We currently have no need or plans to seek bankruptcy protection. U.S. courts have held that debtors whose income is derived from cannabis or cannabis assets in violation of the CSA cannot seek federal bankruptcy protections. Although we are not in the business of growing or processing cannabis or selling or even possessing cannabis or cannabis products, a U.S. court could determine that our revenue is derived from cannabis or cannabis assets and prevent us from obtaining bankruptcy protections if necessary.
The conduct of third parties may jeopardize our business.
We cannot guarantee that our systems, protocols, and practices will prevent all unauthorized or illegal activities by our clients. Our success depends in part on our clients’ ability to operate consistently with the regulatory and licensing requirements of each state, local, and regional jurisdiction in which they operate. We have policies and procedures to review cannabis license information for operational cannabis retail clients to ensure validity and accuracy of such license information. We cannot ensure that the conduct of our clients, who are third parties, and their actions could expose them to legal sanctions and costs, which would in turn, adversely affect our business and operations.
A failure to comply with laws and regulations regarding our use of telemarketing, including the TCPA, could increase our operating costs and materially and adversely impact our business, financial condition, results of operations, and prospects.
Our technology allows dispensaries to send outbound text communications to their customers. While we believe that it is each dispensary’s responsibility for compliance with state and federal laws regulating outbound communications, we recognize that SpringBig may be named in actions alleging violations of these laws or otherwise have to be involved in demands and actions stemming from alleged violations of these laws (e.g., through subpoenas). There are a number of state and federal laws regulating outbound telephonic communications, including the TCPA and Telemarketing Sales Rule. The U.S. Federal Communications Commission, or the FCC, and the FTC have responsibility for regulating various aspects of these laws. Individual states, like Washington and Florida, also separately regulate outbound telephonic communications. Among other requirements, the TCPA and other laws require the sender of the message to obtain prior express written consent for telemarketing calls and to adhere to state and national “do-not-call” registry requirements and implement various compliance procedures. These laws impact dispensary customers’ ability to communicate with their customers and can impact effectiveness of our marketing
35

TABLE OF CONTENTS

programs. These laws also raise the risk that SpringBig could be named directly or involved indirectly in litigation. The TCPA and other similar laws do not distinguish between voice and data communications, and, as such, SMS/MMS messages are also “calls” for the purpose of these outbound telephonic communication statutes.
The TCPA and similar state laws provide for a private right of action under which a plaintiff may bring suit and, oftentimes, allow the recovery of statutory damages. The TCPA, by way of example, imposes statutory damages of between $500 and $1,500 per violation. There is no statutory cap on maximum aggregate exposure (although some courts have applied in TCPA class actions constitutional limits on excessive penalties). An action may be brought by the FCC, a state attorney general, an individual on behalf of the individual or a class of individuals. Like other companies that play an intermediary role between the sender (the dispensary) and the recipient (the dispensary customer) of telephonic communications, we have been sued under the TCPA and have received a number of subpoenas in TCPA cases brought against dispensaries. If in the future we are found to have violated the TCPA or any similar state law, particularly on a class-wide basis, the amount of damages and potential liability could be extensive and materially and adversely impact our business, financial condition, results of operations, and prospects.
We may continue to be subject to constraints on marketing our products.
Certain of the states in which we operate have enacted strict regulations regarding marketing and sales activities on cannabis products, which could affect our cannabis retail clients’ demand for our platform and marketing services. There may be restrictions on sales and marketing activities of cannabis businesses imposed by government regulatory bodies that can hinder the development of our business and operating results because of the restrictions our clients face. If our clients are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products for our clients, this could hamper demand for our products and services from licensed cannabis retailers, which could result in a loss of revenue.
Cannabis businesses are subject to unfavorable U.S. tax treatment.
Section 280E of the Code does not allow any deduction or credit for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses beyond costs of goods sold and asserting assessments and penalties for additional taxes owed. Section 280E of the Code may have a lesser impact on cannabis cultivation and manufacturing operations than on sales operations, which directly affects our suppliers, who are cannabis retailers and brands. However, Section 280E of the Code and related IRS enforcement activity have had a significant impact on the operations of all cannabis companies. While Section 280E of the Code does not directly affect SpringBig, it lowers SpringBig’s clients’ profitability, and could result in decreased demand or higher price sensitivity for SpringBig’s listing, marketing and customer loyalty services. An otherwise profitable cannabis business may operate at a loss after taking into account its U.S. income tax expenses. This affects SpringBig because SpringBig’s sales and operating results could be adversely affected if SpringBig’s clients decrease their marketing budgets and are operating on lower profit margins as a result of unfavorable treatment by the Code.
Service providers to cannabis businesses may also be subject to unfavorable U.S. tax treatment.
As discussed above, under Section 280E of the Code, no deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses and asserting assessments and penalties for additional taxes owed. While we do not believe that Section 280E of the Code applies to our business, and, generally, ancillary service providers who work with state-licensed cannabis businesses have not been subject to Section 280E of the Code, because they are providing services or products other than cannabis, if the IRS interprets the section to apply, it would significantly and materially affect our profitability and financial condition.
The MORE Act, which was passed by the House of Representatives in 2020 and reintroduced in the Senate for consideration on September 30, 2021, would remove marijuana from the CSA, which would effectively carve out state-legal cannabis businesses from Section 280E of the Code. However, the MORE Act would impose two new
36

TABLE OF CONTENTS

taxes on cannabis businesses: an excise tax measured by the value of certain cannabis products and an occupational tax assessed on the enterprises engaging in cannabis production and sales. Although these novel tax provisions are included in the MORE Act passed by the House of Representatives, it is challenging to predict whether, when and in what form the MORE Act could be enacted into law and how any such legislation would affect the activities of SpringBig. Similarly, the recently introduced States Reform Act would also effectively carve out state-legal cannabis businesses from Section 280E of the Code but at the same time impose a new excise tax on cannabis businesses (albeit at a lower rate than the proposed MORE Act).
Cannabis businesses may be subject to civil asset forfeiture.
Any property owned by participants in the cannabis industry used in the course of conducting such business, or that represents proceeds of such business or is traceable to proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the cannabis industry under federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. Forfeiture of assets of our cannabis business clients could adversely affect our revenues if it impedes their profitability or operations and our clients’ ability to continue to subscribe to our services.
Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.
Insurance that is otherwise readily available, such as general liability and directors’ and officers’ insurance, is more difficult for us to find and is more expensive or contains significant exclusions because our clients are cannabis industry participants. There are no guarantees that we will be able to find such insurance coverage in the future or that the cost will be affordable to us. If we are forced to operate our business without such insurance coverage, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities. If we experience an uninsured loss, it may result in loss of anticipated cash flow and could materially adversely affect our results of operations, financial condition, and business.
There may be difficulty enforcing certain of our commercial agreements and contracts.
Courts will not enforce a contract deemed to involve a violation of law or public policy. Because cannabis remains illegal under U.S. federal law, certain parties to contracts involving the state-legal cannabis industry have argued that the agreement was void as federally illegal or against public policy. Some courts have accepted this argument in certain cases, usually against the company trafficking in cannabis. While courts have enforced contracts related to activities by state-legal cannabis companies, and the trend is generally to enforce contracts with state-legal cannabis companies and their vendors, there remains doubt and uncertainty that we will be able to enforce all of our commercial agreements in court for this reason. We cannot be assured that we will have a remedy for breach of contract, which would have a material adverse effect on our business.
Risks Related to Our Intellectual Property
We may in the future be, subject to disputes and assertions by third parties with respect to alleged violations of intellectual property rights. These disputes could be costly to defend and could harm our business and operating results.
We may, from time to time in the future, face allegations that we have violated the intellectual property rights of third parties, including patent, trademark, copyright and other intellectual property rights. Even if the claims are without merit, defending these types of claims may result in substantial costs, the diversion of the attention of management, and the disruption of our operations. In particular, patent and other intellectual property litigation may be protracted and expensive, and the results are difficult to predict. We may be required to stop offering certain features, purchase licenses or modify our products and features while we develop non-infringing substitutes, or become subject to significant settlement costs. These claims also could subject us to significant liability for damages and could result in our having to stop using or hosting technology, content, branding or business methods found to be in violation of another party’s rights. We do not own any patents and, therefore, may be unable to deter competitors or others from pursuing patent or other intellectual property infringement claims against us through the threat of counter-suit.
Companies in the software-as-a-service (SaaS) vertical in which we operate and other industries may own large numbers of patents, copyrights, and trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights. Our
37

TABLE OF CONTENTS

platform features third-party brands, which may themselves infringe third party intellectual property rights and could bring us into litigation between the parties. Further, although we contractually seek indemnification protection from our clients, clients may not be solvent or financially able to indemnify us. We may be required or may opt to seek a license of intellectual property rights held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding, or business methods, which could require significant effort and expense and which we may not be able to accomplish efficiently, or at all. If we cannot use, license, or develop technology, content, branding, or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively. Further, as we face increasing competition and as our business grows, we will face an increasing likelihood of claims of infringement.
The results of litigation and claims to which we may be subject cannot be predicted with certainty. Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, reputation and operating results.
Some of our solutions contain open source software, which may pose particular risks to our proprietary software and solutions.
We use open source software that we have obtained from third parties or is included in software packages in our solutions and will continue to use open source software in the future. Open source software is generally freely accessible, usable and modifiable, and is made available to the general public on an “as-is” basis under the terms of a non-negotiable license. From time to time, we may face claims from third parties claiming ownership of, or demanding release of, the open source software and/or derivative works that we developed using such software (which could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to purchase a costly license or cease offering the implicated solutions unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business and operating results.
The success of our business heavily depends on our ability to protect and enforce our intellectual property rights.
Our business depends on our intellectual property, the protection of which is crucial to the success of our business. We rely on a combination of trademark, trade secret and other intellectual property rights and laws and contractual restrictions to protect our intellectual property. As examples of such restrictions, we attempt to protect our intellectual property, technology and confidential information by entering into confidentiality and inventions assignment agreements and non-competition agreements with employees, contractors, consultants and business partners who develop intellectual property on our behalf, and entering into non-disclosure agreements with our business partners. These agreements may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property or technology. Despite our efforts to protect our proprietary rights, unauthorized parties, as examples, may copy aspects of our website features, software and functionality or obtain and use information that we consider proprietary.
Despite our efforts to protect our intellectual property rights, including trademarks, they may not be recognized in the future, or may be invalidated, circumvented or challenged. For example, we have registered, among numerous other trademarks, “SpringBig” as a trademark in the U.S. Competitors have and may continue to adopt service names similar to ours, thereby harming our ability to build brand identity and possibly leading to consumer confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks that are similar to our trademarks. Litigation or proceedings before the U.S. Patent and Trademark Office or other governmental authorities and administrative bodies in the U.S. and abroad may be necessary in the future to enforce our intellectual property rights and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources, which could harm our business and operating results.
38

TABLE OF CONTENTS

Further, we may be subject, from time-to-time, to claims that former employees, collaborators or other third parties have an interest in our intellectual property as an inventor or co-inventor. We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors. These agreements generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, those agreements may not be honored and may not effectively assign intellectual property rights to us. Moreover, there may be some circumstances, where we are unable to negotiate for such ownership rights. If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time consuming. If we were unsuccessful, we could lose valuable rights in intellectual property that we regard as our own, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Risks Related to Our Securities and Certain Tax Matters
If our performance does not meet market expectations, the price of our securities may decline and the market for our securities may be volatile.
If our performance does not meet market expectations, the price of our Common Shares may decline. In addition, even if an active market for our Common Shares develops and continues, the trading price of our Common Shares could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on the price of our Common Shares.
Factors affecting the trading price of our Common Shares may include:
actual or anticipated fluctuations in our quarterly and annual financial results or the quarterly and annual financial results of companies perceived to be similar to it;
changes in the market’s expectations about operating results;
our operating results failing to meet market expectations in a particular period;
operating results failing to meet market expectations in a particular period, which could impact the market price our Common Shares;
operating and stock price performance of other companies that investors deem comparable to us;
changes in laws and regulations affecting our businesses;
commencement of, or involvement in, litigation involving the Company;
changes in our capital structure, such as future issuances of securities or the incurrence of debt;
any significant change in our Board of Directors or management;
sales of substantial amounts of our Common Shares directors, executive officers or significant shareholders or the perception that such sales could occur; and
general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
Broad market and industry factors may depress the market price of our Common Shares irrespective of our operating performance. The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for companies engaging in digital payments or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our Common Shares also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.
We do not intend to pay cash dividends for the foreseeable future.
We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our Board of Directors deems relevant.
39

TABLE OF CONTENTS

We may be subject to securities litigation, which is expensive and could divert management attention.
The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
A significant portion of our total outstanding shares may be sold into the market in the near future including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well, and the selling securityholders may still receive significant proceeds.
Sales of a substantial number of Common Shares in the public market could occur at any time as a result of issuances and resales of Common Shares under the Notes and Warrants along with other issuances and resales of Common Shares including shares subject to the Facility, and our public and private warrants, as well as the resale of Common Shares by other holders, and pursuant to the Company’s equity incentive plan. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Shares.
In addition to the Common Stock covered by this prospectus, we have filed registration statements relating to the resale of 5,055,524 shares of Common Stock pursuant to the Facility and the issuance of 16,000,000 shares underlying our public and private warrants and the resale of 21,590,291 shares of previously issued Common Stock. The shares of common stock being offered for resale under these prospectuses and with respect to such offerings, assuming the exercise in full of the Warrants as well as the Company's public and private placement warrants, and the issuance of all shares offered for resale under the prospectus related to the Facility, would represent approximately 92.7% of shares outstanding of the Company, based on the outstanding shares of the Company as of June 14, 2022 and after giving effect to all such issuances. As such, sales of a substantial number of shares of Common Stock in the public market could occur at any time. Given the substantial number of shares of Common Stock being registered for potential resale by the selling securityholders pursuant to this and other prospectuses, the sale of shares by various selling securityholders, or the perception in the market that the stockholders of a large number of shares intend to sell shares, could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock. Further, such prospectuses cover Common Shares being offered for resale that were purchased at prices that may be significantly below the trading price of our Common Shares and the sale of which would result in the applicable selling securityholders realizing a significant gain. Even if our trading price is significantly below $10.00, the offering price for the units offered in Tuatara’s IPO, certain selling securityholders, including the Sponsor, may still have an incentive to sell shares of our Common Stock because they purchased the shares at prices lower than the public investors or the current trading price of our Common Stock. For example, based on the closing price of our common stock of $1.68 as of July 27, 2022, the Sponsor and other holders of the Founder Shares (assuming all shares are fully vested) would experience a potential profit of up to approximately $1.67 per share, or up to approximately $6.7 million in the aggregate. Public holders of our Common Shares may not experience a similar rate of return on their shares.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. If any of the analysts who may cover SpringBig change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. If any analyst who may cover SpringBig were to cease their coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
We may amend the terms of our public and private warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of Common Stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our public warrants were issued in registered form under the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Tuatara. In connection with the Domestication, the public warrants
40

TABLE OF CONTENTS

which were originally warrants to purchase Tuatara Class A ordinary shares and Tuatara Class B ordinary shares became, by operation of law, warrants to purchase SpringBig common stock. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of curing any ambiguity or curing, correcting or supplementing any defective provision or adding or changing any other provisions with respect to matters or questions arising under the warrant agreement, but requires the approval by the holders of at least 65% of then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of then outstanding public warrants approve of such amendment. Examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon the exercise of a warrant.
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could remain an emerging growth company for up to five years from the date of our IPO, although circumstances could cause us to lose that status earlier, including if the market value of our Common Shares held by non-affiliates exceeds $700,000,000 as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
We have and will continue to incur increased costs as a result of operating as a public company and our management has and will continue to devote a substantial amount of time to new compliance initiatives.
As a public company, we have and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company, and these expenses may increase even more after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. In addition, we expect to record incremental share-based compensation expense in connection with the consummation of the Business Combination.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and the Nasdaq Stock Market LLC. Our management and other personnel have and will continue to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have substantially increased our legal and financial compliance costs and made some activities more time-consuming and costly. For example, these rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance and forced
41

TABLE OF CONTENTS

us to accept reduced policy limits. We cannot predict or estimate the amount or timing of additional costs we have and will continue to incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as executive officers.
Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effect on our business.
As a public company, we are required to provide management’s attestation on internal controls as required under Section 404(a) of the Sarbanes-Oxley Act. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of us as a privately-held company. If we are not successful in implementing the additional requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities.
Failure to properly implement internal controls on a timely basis may lead to the identification of one or more material weaknesses or control deficiencies in the future, which may prevent us from being able to report our financial results accurately on a timely basis or help prevent fraud, and could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Common Shares to decline. If we have material weaknesses in the future, it could affect the financial results that we report or create a perception that those financial results do not fairly state our financial position or results of operations. Either of those events could have an adverse effect on the value of our Common Shares.
Further, even if we conclude that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our future reporting obligations.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.
Anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law could delay or prevent a change in control, limit the price investors may be willing to pay in the future for our Common Shares and could entrench management.
Our certificate of incorporation and bylaws contain provisions that could make it more difficult for a third-party to acquire us without the consent of our Board of Directors. These provisions provide for:
a classified Board of Directors with staggered three-year terms;
the ability of our Board of Directors to determine the powers, preferences and rights of preference shares and to cause us to issue the preference shares without shareholder approval; and
requiring advance notice for shareholder proposals and nominations and placing limitations on convening shareholder meetings.
These provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take corporate actions other than those you desire, any of which could harm our share price.
42

TABLE OF CONTENTS

Our largest shareholders and certain members of our management own a significant percentage of our Common Shares and are able to exert significant control over matters subject to shareholder approval.
Our founder and certain of our largest shareholders hold a significant percentage of our Common Shares. As a result, these holders have the ability to substantially influence us and exert significant control through this ownership position and, in the case of certain holders, service on our Board of Directors. For example, these holders may be able to control elections of directors, issuance of equity, including to our employees under equity incentive plans, amendments of our organizational documents, or approval of any merger, amalgamation, sale of assets or other major corporate transaction. These holders’ interests may not always coincide with our corporate interests or the interests of other shareholders, and it may exercise its voting and other rights in a manner with which you may not agree or that may not be in the best interests of our other shareholders. So long as these holders continue to own a significant amount of our equity, they will continue to be able to strongly influence and effectively control our decisions.
Future sales and issuances of our Common Shares, including pursuant to our equity incentive and other compensatory plans, will result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
We may need additional capital in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution. We may sell Common Shares, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell Common Shares, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. In addition, new investors could gain rights superior to our existing shareholders.
Pursuant to SpringBig Holdings, Inc. 2022 Long-Term Incentive Plan (the “Incentive Plan”), we are authorized to grant options and other share-based awards to our employees, directors and consultants. The number of shares of our Common Stock initially reserved for issuance under the Incentive Plan was 1,525,175, which equaled the amount of shares of our Common Stock equal to 5% of the sum of (i) the number of shares of our Common Stock outstanding as of the Closing and (ii) the number of shares of our Common Stock underlying stock options issued under the SpringBig, Inc. 2017 Equity Incentive Plan (as amended and restated) that are outstanding as of the Closing. Shares subject to stock awards granted under the Incentive Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the Incentive Plan. See “—Risks Related to Our Securities and Certain Tax Matters—A significant portion of our total outstanding shares may be sold into the market in the near future, including the shares being registered for resale pursuant to this prospectus. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well.”
Because there are no current plans to pay cash dividends on our Common Shares for the foreseeable future, you may not receive any return on investment unless you sell our Common Shares for a price greater than that which you paid for it; furthermore, there is no guarantee that the value of the Common Shares will increase to a price greater than that which you paid for it.
We may retain future earnings, if any, for future operations, expansion, and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, applicable law and other factors that our Board of Directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur. As a result, you may not receive any return on an investment in our Common Shares unless you sell your shares of for a price greater than that which you paid for them; provided, however, that there is no guarantee that the value of the Common Shares will increase to a price greater than the price for which such shares were purchased.
43

TABLE OF CONTENTS

L1 CAPITAL FINANCING
Notes and Warrants Purchase Agreement
On April 29, 2022, we entered into an agreement (the “Notes and Warrants Purchase Agreement”) with L1 Capital Global Opportunities Master Fund, Ltd. (the “Investor”), to sell to Investors up to (i) a total of up to $16 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 (the “Notes”) and (ii) a number of warrants equal to one-half of the principal of the Notes actually issued, divided by the volume weighted average price (“VWAP”) on the trading day prior to such Note issuance date (the “Warrants”), in a private placement.
On June 14, 2022, at the first closing under the Notes and Warrants Purchase Agreement, we issued and sold to L1 Capital for $10,000,000 in total cash consideration (i) a Note in the principal amount of $11,000,000 (the “First Tranche Note”), and (ii) five-year warrant (the “First Tranche Warrant”) to purchase 586,980 shares of our common stock at an exercise price of $12.00 per share (the “First Tranche Closing”).
At the second closing, we shall sell to the Investor, for a total consideration to the Company of up to $4,545,454, (i) up to $5,000,000 principal amount of Notes (with the amount to be drawn at the Company’s discretion) and (ii) Warrants to purchase a number of Common Shares equal to one-half of the principal of the Notes actually issued, divided by the VWAP on the trading day prior to the closing date of such sale, at an exercise price of $12.00 per share (the “Second Tranche Closing”). The Second Tranche Closing shall occur 60 days after the effective date of this Registration Statement or at other such as time as may be agreed between the Company and the Investor, and is subject to satisfaction of the Equity Conditions described below (such date, the “Second Tranche Closing Date”). Assuming that the warrants to be issued at the Second Tranche Closing were determined using the closing price of our Common Shares on June 29, 2022 ($1.93), such Warrants would be exercisable for a total of 1,295,337 shares.
The Notes are convertible at the option of the holder beginning at the earlier of (i) the date of effectiveness of the Registration Statement of which this prospectus forms a part, or (ii) the first anniversary of the Note issuance date, at an initial conversion share price of $12.00 per share, subject to certain anti-dilution adjustments. Interest at 6% per annum is payable quarterly in arrears in cash. Principal amortization on each Note commences six months after issuance, at which point principal is payable in equal monthly installments through the maturity date of the Note. The Company may, at its option, satisfy each principal payment either in cash or, if the Equity Conditions described below are met, by issuing a number of shares of common stock equal to the amount due on such date divided by the lower of (i) the Conversion Price or (ii) 93% of the VWAP prior to such monthly payment date, multiplied by of the amount due on such date. Each Warrant shall be exercisable for shares of the Company’s common stock at an exercise price of $12.00 per share, subject to certain anti-dilution adjustments.
The Notes are not prepayable in whole or in part prior to the maturity date. However, beginning five (5) months after the issuance of a Note (November 14, 2022 in the case of the First Tranche Note) the Company is permitted at its option to use between 60% and 25% of the net proceeds from Common Stock sales under the Cantor Equity Facility to make a prepayment of the Notes.
The terms of the Notes and Warrants Purchase Agreement contains customary representations and warranties, indemnification, and other covenants of the Company and the Investor, as well as the following material terms: The Notes are convertible into common stock at a rate of $12.00 per share (the “Conversion Price”). The Conversion Price may be adjusted in the event of dilutive issuances. In addition, under the terms of the Notes, the Investor has the right to defer or (with the Company’s consent) accelerate, up to four of the monthly principal payments. Neither the Company, nor Investor, may convert any portion of the Notes to the extent that, after giving effect to such conversion, the Investor (together with any affiliated parties) would beneficially own in excess of 4.99% of our outstanding common stock unless the Investor provides SpringBig with written notice of an increase to this limitation, not to exceed 9.99%.
The “Equity Conditions” required to be met in order for us to pay principal on the Notes with shares of common stock in lieu of a monthly cash payment, and to issues Notes in the Second Tranche, include, without limitation, that (i) the absence of any event of default under the Notes and Warrants Purchase Agreement, the Notes or related documents, (ii) a registration statement must be in effect with respect to the resale of the shares issuable upon conversion or redemption of the Notes (or, that an exemption under Rule 144 is available), (iii) our total market capitalization on the Nasdaq Market remains above $50,000,000 (or $75,000,000 in the case of the Second Tranche Closing) and (iv) the average daily trading volume of our common stock must equal at least $500,000 for the 20 trading days immediately prior to any applicable payment (as applicable).
44

TABLE OF CONTENTS

The Warrants have an exercise price, subject to the same anti-dilution protection as the Notes. The Warrants are exercisable for cash, or on a cashless basis only for so long as no registration statement covering resale of the shares is in effect. The Investor shall not have the right to exercise any portion of the Warrant to the extent that, after giving effect to such exercise, the Investor (together with any affiliated parties), would beneficially own in excess of 4.99% of our outstanding common stock. We believe the likelihood that the Investor will exercise the Investor Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price.
Future Financing Participation Right
Under the Notes and Warrants Purchase Agreement, subject to certain exceptions, for a period of 18 months after the First Tranche Closing Date, the Investors shall have the right to participate in up to 30% of future financings by the Company undertaken during that period, other than shares sold pursuant to the Cantor Equity Line.
Share Reserve
The Company shall at all times keep authorized and reserved and available for issuance, free of preemptive rights, a number of ordinary shares equal to three times the number of ordinary shares issuable upon conversion of the Notes and exercise of the Warrants.
Negative Covenants and Prohibited Transactions
The Notes and Warrants Purchase Agreement and the terms of the Note contain certain negative covenants, including restrictions that prohibit us incur additional indebtedness and guarantee indebtedness; incur liens or allow mortgages or other encumbrances; prepay, redeem, or repurchase certain other debt; pay dividends or make other distributions or repurchase or redeem our capital stock; sell assets or enter into or effect 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); issue additional equity (outside of the Cantor Equity Facility, issuances under our equity compensation plan and other limited exceptions); enter into variable rate transactions (exclusive of the Facility); and adopt certain amendments to our governing documents, among other restrictions. In addition, the terms of the Notes restrict our ability to issue additional equity capital. The Company does not have the ability to prepay the Notes prior to maturity except to the limited extent of proceeds from the Cantor Equity Facility to the extent available.
Security Agreement and Subsidiary Guarantee
We entered into a Security Agreement with the Investor pursuant to which the Investor was granted a security interest in all of the assets of the Company and Legacy SpringBig and certain of its subsidiaries. Repayment of the Note is also guaranteed by Legacy SpringBig pursuant to a subsidiary guaranty.
Registration Statement
Pursuant to the Registration Rights Agreement, we agreed to file a registration statement with the SEC within 20 days of the closing of the First Tranche registering all Conversion Shares and Warrant Shares for resale, and to cause the Registration Statement to be declared effective no later than 75 days after the closing of the First Tranche (provided that we will not be responsible for the failure of the Registration Statement to be declared effective due to factors outside of our control).
Default Remedies
The Notes are also subject to certain customary events of default (each referred to as an “Event of Default”), including: (i) failure to make payments of principal, interest or other sums due under the Notes; (ii) failure to observe or perform any other material covenant, condition or agreement under the terms of any transaction documents; (iii) default on payments of principal or interest on other indebtedness in excess of $600,000, or failure to observe or perform under other material agreements related to such indebtedness, resulting in acceleration of such indebtedness; (iv) public announcement of inability to comply with proper conversion requests; (v) once underlying shares are freely tradable, failure to instruct the transfer agent to remove restrictive legends within two trading days; (vi) failure to timely deliver shares upon conversion; (vii) failure to have required minimum shares authorized, reserved and available for issuance; (viii) any representation or warranty under the transaction documents is proven
45

TABLE OF CONTENTS

to have been materially false, incorrect or breached on the date it was made; (ix) application for, petition for, or issuance of notice for bankruptcy; (x) commencement of proceeding for liquidation, dissolution, or winding up, appointment of receiver, or other relief under bankruptcy or related laws; (xi) final judgments in excess of $600,000; (xii) de-listing or failure to comply with requirements under Rule 144 (other than volume and manner of sale requirement); (xiii) common stock is no longer registered pursuant to a “going private transaction”; (xiv) existence of an SEC stop order on the trading of the common stock with respect to this Registration Statement or a trading suspension by the SEC or Nasdaq; (xv) failure to execute transfer agent instructions upon replacement of SpringBig’s transfer agent; (xvi) entrance into a variable rate transaction without written consent of the existing Note holders; or (xvii) failure to pledge the equity interests of a newly formed subsidiary or otherwise guarantee the Notes within ten trading days of the formation of such subsidiary. Upon an Event of Default as defined in the Note, the Investor has the right to accelerate payment of the Notes at a “Mandatory Default Amount” equal to 115% of the outstanding principal amount of the Notes. In addition, at any time when an Event of Default has occurred and is continuing, the Notes would be convertible at a rate equal to the lower of the Conversion Price and 80% of the lowest VWAP in the ten prior trading days, provided, that if the default is cured the default conversion rate elevates back to the normal Conversion Price. Further, if an Event of Default has occurred and is continuing at any time after the earlier of the effectiveness of the Registration Statement or June 14, 2023, the Investor has the right to demand payment of interest on the Notes in a number of shares of Common Stock equal to the amount due on such date divided by the lower of the Conversion Price or 93% of the lowest VWAP in the ten prior trading days.
Selling Stockholders’ Return on Sale of Securities
As described herein, the Company issued the Note to the Investor for $10,000,000 in total cash consideration and the Warrants for no additional consideration. The Conversion Shares are issuable at an original conversion price of $12.00 per share based on the $11,000,000 principal amount of the Note but represent a value of $10.90 per share based on the 916,667 shares issuable upon the conversion of the Note for the $10,000,000 in cash consideration paid to the Company. While the Warrants were issued for no additional consideration, they have a $12.00 exercise price, which is subject to anti-dilution adjustments and the issuance of shares under the Notes are subject to adjustments for dilution and in the event of default (as described herein).
We believe the likelihood that the Investor will exercise the Warrants is dependent upon the trading price of our Common Shares, and, if the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Investor will be unlikely to exercise their warrants. As of July 27, 2022, the closing trading price of our Common Stock was $1.68.
Both the conversion price of the Notes and the exercise price of the Warrants may be adjusted in the event the Company were undertake dilutive issuances. In the event the Company were to raise capital through the issuance of equity (to the extent permitted under the terms of the Notes and Warrants), it could have the impact of lowering the effective price of the underlying shares below market value. Further, the Company may, at its option and subject to certain conditions, satisfy principal payments under the Notes with issuing a number of shares of common stock equal to the amount due on such date, divided by the lower of the conversion price or 93% of the VWAP prior to such monthly payment date, multiplied by of the amount due on such date. Further, in the event of a default under the Notes, the Notes would be convertible at a rate equal to the lower of the conversion price and 80% of the lowest VWAP in the ten prior trading days. In such instances, the Investor would receive Common Shares below the market price, which could provide them with a profit on the sales of such shares even if the trading price at such time(s) is significantly below the per share offering price for the shares offered in Tuatara’s IPO or such other price at which public investors may have acquired Common Shares. However, the amount of such profit cannot be determined at this time.
46

TABLE OF CONTENTS

USE OF PROCEEDS
We are not selling any securities under this prospectus and will not receive any proceeds from the sale of the common stock offered by this prospectus by the Selling Stockholder. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current $12.00 exercise price with respect to 1,760,940 Common Shares, would result in gross proceeds to us of approximately $21,131,280, assuming the exercise in full of all of the Warrants. We believe the likelihood that the Investor will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the Selling Stockholder will be unlikely to exercise their Warrants. Accordingly, there is no assurance that the Selling Stockholder will elect to exercise any or all of such Warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the Warrants. The proceeds from such Warrant exercises, if any, will be used for working capital and general corporate purposes.
We cannot predict when or whether the Warrants will be exercised, and it is possible that some or all of the Warrants may expire unexercised. For information about the Selling Stockholder, see “Selling Stockholder”.
The Selling Stockholder will pay any underwriting fees, discounts and selling commissions incurred by such Holder in connection with any sale of their Common Shares. The Company will bear all other costs, fees and expenses incurred in effecting the registration of the Common Shares covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of counsel and independent registered public accountants.
DETERMINATION OF OFFERING PRICE
We cannot currently determine the price or prices at which Common Shares may be sold by the Holder under this prospectus.
MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY
Market Information
The Common Shares are currently listed on The Nasdaq Global Market under the symbol “SBIG.” As of June 22, 2022, there were 65 holders of record of our Common Shares.
Dividend Policy
We have not declared or paid any dividends on our Common Shares to date. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant.
47

TABLE OF CONTENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context otherwise requires, all references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refer to “SpringBig,” the “Company,” “we,” “us” or “our” refer to SpringBig, Inc. and its subsidiaries.
The following discussion and analysis of SpringBig’s financial condition and results of operations should be read in conjunction with SpringBig’s consolidated financial statements and notes to those statements. The discussion should be read together with the historical audited annual statements for the years ended December 31, 2021 and 2020, and the related notes that are included elsewhere in this Prospectus and the unaudited interim statements for the three months ended March 31, 2022 and 2021, and the related notes that are included elsewhere in this Prospectus. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. SpringBig’s actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in other parts of this prospectus.
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.
Overview
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 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, strengthening our value proposition.
SpringBig serves approximately 1,300 brand and retailer clients across more than 2,400 distinct retail locations in North America. Our clients distribute almost 2 billion messages annually, and in the last year more than $7 billion of gross merchandise value (“GMV”) was accounted for by clients utilizing our platform. Revenue grew by 58% in 2021 and our growth has continued into 2022 with 22% growth in revenues in the quarter ended March 31, 2022 compared with the same quarter last year. We have an excellent track record of securing and retaining our clients with our value proposition, which we measure by our “net revenue retention rate.” 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. Our net revenue retention rate was 128% in 2020, 110% in 2021 and 107% for the twelve months ending March 31, 2022, stemming from SpringBig’s high-caliber products and through delivering excellence in client service.
The Business Combination and Incremental Financing
Consummation of the Business Combination
On June 14, 2022, SpringBig Holdings, Inc., a Delaware corporation (formerly known as Tuatara Capital Acquisition Corporation (“Tuatara”)), consummated the previously announced business combination of Tuatara and SpringBig, Inc. Pursuant to the merger agreement, prior to the closing of the business combination, Tuatara changed
48

TABLE OF CONTENTS

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 (the “Domestication”). In connection with the Closing, the registrant changed its name from Tuatara Capital Acquisition Corporation to “SpringBig Holdings, Inc.”
Holders of an aggregate of 19,123,806 Class A ordinary shares of Tuatara sold in its initial public offering (the “IPO”) (such shares, the “Public Shares”) properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from Tuatara’s IPO, which was approximately $10.01 per share, or $191,437,817 in the aggregate. The holders that did not elect to have their shares redeemed received, following the Domestication, their respective pro rata share of the lesser of (x) the number of shares of common stock that did not elect to redeem and (y) 1,000,000 shares of common stock, which amounted to 876,194 shares of common stock that were allocated to such non-redeeming holders. After the Closing Date, Tuatara’s Class A ordinary shares, warrants and units ceased trading on The Nasdaq Capital Market. Common Shares and SpringBig Public Warrants commenced trading on The Nasdaq Global Market under the symbols “SBIG” and “SBIGW,” respectively, on June 15, 2022.
SpringBig is continuing the existing business operations of SpringBig, Inc. as a publicly traded company.
Incremental Financings
Cantor Equity Financing
On April 29, 2022, Tuatara entered into the Common Stock Purchase Agreement (the “Purchase Agreement”) with CF Principal Investments LLC related to a committed equity facility (the “Facility”). Pursuant to the Purchase Agreement, SpringBig has the right, from time to time at its option to sell to CF Principal Investments LLC up to $50 million in aggregate gross purchase price of newly issued common stock since the closing of the business combination subject to certain conditions and limitations set forth in the Purchase Agreement. While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis outside the context of a traditional underwritten follow-on offering.
Sales of shares of SpringBig’s common stock to CF Principal Investments LLC under the Purchase Agreement, and the timing of any sales, will be determined by SpringBig from time to time in its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the common stock and determinations by SpringBig regarding the use of proceeds of such common stock and will be subject to the conditions forth in the Purchase Agreement. The net proceeds from any sales under the Purchase Agreement will depend on the frequency with, and prices at, which the shares of common stock are sold to CF Principal Investments LLC. SpringBig expects to use the proceeds from any sales under the Purchase Agreement for working capital and general corporate purposes, including servicing our debt obligations under the Notes.
Upon the initial satisfaction of the conditions to CF Principal Investments LLC’s obligation to purchase common stock set forth in the Purchase Agreement (the “Commencement”), including that a registration statement registering the resale by CF Principal Investments LLC of the common stock under the Securities Act purchased pursuant to the Purchase Agreement (the “Cantor Resale Registration Statement”), is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, and subject to certain conditions, SpringBig will have the right, but not the obligation, from time to time at its sole discretion until no later than the first day of the month next following the 36-month period from and after the date that the Cantor Resale Registration Statement is declared effective, to direct CF Principal Investments LLC to purchase up to a specified maximum amount of common stock as set forth in the Purchase Agreement by delivering written notice to CF Principal Investments LLC prior to the commencement of trading on any trading day. The purchase price of the common stock that SpringBig elects to sell to CF Principal Investments LLC pursuant to the Purchase Agreement will be 97% of the VWAP of the common stock during the applicable purchase date on which SpringBig has timely delivered written notice to CF Principal Investments LLC directing it to purchase common stock under the Purchase Agreement.
In connection with the execution of the Purchase Agreement, SpringBig agreed to issue a number of shares of common stock equal to the quotient obtained by dividing (i) $1,500,000 and (ii) the VWAP over the five trading days immediately preceding the filing of the Cantor Resale Registration Statement to CF Principal Investments LLC as consideration for its irrevocable commitment to purchase the common stock upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement. In addition, pursuant to the Purchase Agreement,
49

TABLE OF CONTENTS

SpringBig has agreed to reimburse CF Principal Investments LLC for certain expenses incurred in connection with the Facility. Issuances of common stock under the Purchase Agreement are subject to a beneficial ownership “blocker” provision, preventing issuances of common stock resulting in ownership in excess of 8% beneficial ownership of shares of SpringBig’s common stock by CF Principal Investments LLC and its affiliates. The Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations by each party. The use of the Facility is subject to certain conditions, including the effectiveness of the Cantor Resale Registration Statement. Therefore, funds from the $50 million gross purchase price will not be immediately available to SpringBig upon the business combination, and there can be no assurances that such purchase price will ever become available.
The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of the Purchase Agreement and as of specific dates, were solely for benefit of the parties to such agreement and are subject to certain important limitations. SpringBig has the right to terminate the Purchase Agreement at any time after the Commencement, at no cost or penalty upon 10 trading days’ prior written notice.
Although SpringBig cannot predict the number of shares of common stock that will actually be issued in connection with any sales under the Facility, it is possible that such issuances may result in large numbers of shares being sold. For example, if the Facility is used in its entirety for $50 million, the number of shares to be issued at the trading price of each of $13.00 per share, $6.00 per share, or $3.00 per share would be 3.97 million shares, 8.6 million shares or 17.2 million shares, respectively (provided that the Company’s sale of shares under the Facility is subject to a 19.99% “exchange cap”).
To the extent that SpringBig sells shares common stock under the Facility, substantial amounts of SpringBig’s common stock will be issued, which would cause dilution and may result in substantial decreases to SpringBig’s stock price. See “Risk Factors.”
Convertible Note Financing
On April 29, 2022, we entered into an agreement (the “Notes and Warrants Purchase Agreement”) with L1 Capital Global Opportunities Master Fund, Ltd. (the “Investor”), to sell to Investor up to (i) a total of up to $16 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 (the “Notes”) and (ii) a number of warrants equal to one-half of the principal of the Notes actually issued, divided by the volume weighted average price (“VWAP”) on the trading day prior to such Note issuance date (the “Warrants”), in a private placement.
On June 14, 2022, at the first closing under the Notes and Warrants Purchase Agreement, we issued and sold to L1 Capital for $10,000,000 in total cash consideration (i) a Note in the principal amount of $11,000,000 (the “First Tranche Note”), and (ii) a five-year warrant (the “First Tranche Warrant”) to purchase 586,980 shares of our common stock at an exercise price of $12.00 per share (the “First Tranche Closing”).
At the second closing, we shall sell to Investor, for a total consideration to the Company of up to $4,545,454, (i) up to $5,000,000 principal amount of Notes (with the amount to be drawn at the Company’s discretion) and (ii) Warrants to purchase a number of Common Shares equal to one-half of the principal of the Notes actually issued, divided by the VWAP on the trading day prior to the closing date of such sale, at an exercise price of $12.00 per share (the “Second Tranche Closing”). The Second Tranche Closing shall occur 60 days after the effective date of this Registration Statement or at other such as time as may be agreed between the Company and the Investor, and is subject to satisfaction of the Equity Conditions described below (such date, the “Second Tranche Closing Date”). Assuming that the warrants to be issued at the Second Tranche Closing were determined using the closing price of our Common Shares on June 29, 2022 ($1.93), such Warrants would be exercisable for a total of 1,295,337 shares.
The Notes are convertible at the option of the holder beginning at the earlier of (i) the date of effectiveness of the Registration Statement of which this prospectus forms a part, or (ii) the first anniversary of the Note issuance date, at an initial conversion share price of $12.00 per share, subject to certain anti-dilution adjustments. Interest at 6% per annum is payable quarterly in arrears in cash. Principal amortization on each Note commences six months after issuance, at which point principal is payable in equal monthly installments through the maturity date of the Note. The Company may, at its option, satisfy each principal payment either in cash or, if the Equity Conditions described below are met, by issuing a number of shares of common stock equal to the amount due on such date divided by the lower of (i) the Conversion Price or (ii) 93% of the volume weighted average price (“VWAP”) prior to such monthly payment date. Each Warrant shall be exercisable for shares of the Company’s common stock at an exercise price of $12.00 per share, subject to certain anti-dilution adjustments.
50

TABLE OF CONTENTS

The Notes are not prepayable in whole or in part prior to the maturity date. However, beginning five (5) months after the issuance of a Note (November 14, 2022 in the case of the First Tranche Note) the Company is permitted, at its option, to use between 60% and 25% of the net proceeds from Common Stock sales under the Cantor Equity Facility to make a prepayment of the Notes.
The terms of the Notes and Warrants Purchase Agreement contains customary representations and warranties, indemnification, and other covenants of the Company and the Investor, as well as the following material terms: The Notes are convertible into common stock at a rate of $12.00 per share (the “Conversion Price”). The Conversion Price may be adjusted in the event of dilutive issuances. In addition, under the terms of the Notes, the Investor has the right to defer or (with the Company’s consent) accelerate, up to four of the monthly principal payments. Neither the Company, nor Investor, may convert any portion of the Notes to the extent that, after giving effect to such conversion, the Investor (together with any affiliated parties) would beneficially own in excess of 4.99% of our outstanding common stock, unless the Investor provides SpringBig written notice of an increase to this limitation not to exceed 9.99%.
The “Equity Conditions” required to be met in order for us to pay principal on the Notes with shares of common stock in lieu of a monthly cash payment, and to issues Notes in the Second Tranche, include, without limitation, that (i) the absence of any event of default under the Notes and Warrants, Purchase Agreement, the Notes or related documents, (ii) a registration statement must be in effect with respect to the resale of the shares issuable upon conversion or redemption of the Notes (or, that an exemption under Rule 144 is available), (iii) our total market capitalization on the Nasdaq Market remains above $50,000,000 (or $75,000,000 in the case of the Second Tranche Closing) and a resale registration statement has registered the common stock underlying the Notes and Warrants) and (iv) the average daily trading volume of our common stock must equal at least $500,000 for the 20 trading days immediately prior to any applicable repayment date (as applicable).
The Warrants have an exercise price, subject to the same anti-dilution protection as the Notes. The Warrants are exercisable for cash, or on a cashless basis only for so long as no registration statement covering resale of the shares is in effect. The Investor shall not have the right to exercise any portion of the Warrant to the extent that, after giving effect to such exercise, the Investor (together with any affiliated parties), would beneficially own in excess of 4.99% of our outstanding common stock. We believe the likelihood that the Investor will exercise the Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Shares which is currently below the $12.00 exercise price.
See “L1 Capital Financing” for further information.
What SpringBig Does
We have developed and commercialized a comprehensive suite of Software-as-a-Service (“SaaS”) solutions for our retailer and brand clients (to which we refer as “clients” and their end-user customers as “customers” or “consumers”).
Through their subscriptions, our retail clients have access to in-depth campaign data, robust analytics, and actionable feedback and summaries to help inform their business decisions and maximize customer engagement and retention. When a client subscribes to our platform, we charge affordable initial set-up fees and the majority of our revenue is derived from a monthly recurring subscription fee. Typically, our subscription agreements extend for twelve months, and they auto-renew on expiry. Within the terms of a subscription, a client receives a pre-determined quantum of communication credits, and we invoice the client if the pre-determined credit amount is exceeded in any month. The fees for such excess use are set forth in the client’s subscription agreement. Excess use revenue accounted for 31% and 32% of revenue for the years ended December 31, 2020 and 2021, respectively and 30% and 20% of revenue for the quarters ended March 31, 2021 and 2022, respectively. We expect excess use revenue as a percentage of recurring subscription revenue to decrease as customers scale and progress to higher subscription tiers over their lifetime.
We also generate revenue by empowering brands with direct access to consumers via marketing campaigns and a brand platform. Our recently introduced brand platform allows brands to advertise and engage cannabis consumers, drive brand awareness, acquire VIP customers with high lifetime value, and access detailed reporting insights into essential campaign attribution metrics. Pricing for the brands platform is either structured on a bulk-pay basis or as a monthly subscription.
51

TABLE OF CONTENTS

Factors Affecting Our Performance
Overall 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.
Growth and Retention of Customers
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. Our annual net revenue retention was 128% in 2020, 110% in 2021 and 107% for the twelve months ending March 31, 2022. See “—Key Operating and Financial Metrics” for a further discussion of net revenue retention rate.
Regulation and Maturation of Cannabis Markets
We believe that we will have significant opportunities for greater 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. See “—Growth Strategies,” below.
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. Our current and future competitors may also enjoy other competitive advantages, such as greater name recognition, more offerings and larger marketing budgets.
Brand Recognition and Reputation
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.
We believe our platform’s scale and strong customer loyalty market themselves; however, we implement a variety of marketing efforts to attract the remaining 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 the 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.
Public Company Costs
Operating as a public company will result in additional costs when compared to historical reporting periods. The Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and the rules and requirements of the Nasdaq, require public companies to implement specified corporate governance practices that were, until the closing of the business combination inapplicable to us as a private company. These additional rules and regulations will increase
52

TABLE OF CONTENTS

our legal, regulatory, financial and insurance compliance costs and will make some activities more time consuming and costly. We expect that these costs will include additional personnel, legal, consulting, regulatory, insurance, accounting/audit, investor relations and other expenses that we did not incur as a private company.
Key Operating and Financial Metrics
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.
 
Three Months ended March 31,
Year ended December 31,
 
2021
2022
2020
2021
 
(dollars in thousands)
Revenue
$5,209
$6,364
$15,183
$24,024
Net Loss
(1,118)
(2,866)
(1,598)
(5,750)
Adjusted EBITDA
(1,113)
(2,718)
(1,582)
(6,361)
 
 
 
 
 
Number of retail clients
890
1,475
759
1,240
Net revenue retention
112%
107%
128%
110%
Number of messages (million)
394
436
1,191
1,861
Adjusted EBITDA represents EBITDA adjusted for the forgiveness of our PPP loan. For a reconciliation of net loss to EBITDA and 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 cancellation terms are generally the same for both the initial and renewal periods unless the parties have otherwise agreed. We have additional ancillary offerings which range in price and terms and also offer a subscription to our brands clients.
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. 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 Metrics
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 and our net revenue retention rate. 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 contributes to the virtuous scale described in “Business of SpringBig—Summary of our Business” and helps contribute to our reach and strengthening our value proposition.
53

TABLE OF CONTENTS

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” 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.
As described in further detail below, we view a net revenue retention rate exceeding 100% as positive because this is indicative of increasing 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.
We calculate this metric as follows:
First, we specify a measurement period consisting of the trailing twelve months from the current period end. We measure our net revenue retention rate on an ongoing, rolling basis over the prior twelve months rather than as a “point in time” metric.
Next, we calculate the numerator as the average monthly recurring revenue (“Base Revenue”), plus any changes in monthly recurring revenue attributable to upgrades (“Upgrades”), less any lost monthly recurring revenue (“Losses”) and less any changes in monthly recurring revenue attributable downgrades (“Downgrades”).
We calculate the denominator as the average monthly recurring revenue for such trailing twelve month period (the “Base Revenue” defined above).
When calculating the average monthly recurring revenue – the Base Revenue for both the numerator and the denominator – SpringBig includes only monthly subscription revenue from retail clients, averaged over the previous twelve month period. Such calculation does not include excess use revenue.
Our net revenue retention rate is calculated as the quotient obtained by dividing the adjusted monthly recurring revenue amount by the average monthly recurring revenue for such trailing twelve month period. The calculation can be summarized as follows:
Base Revenue + [Upgrades – Downgrades – Losses during measurement period]
Base Revenue
The calculation excludes the initial monthly contract amount associated with the subscription of any new clients during the month in which they are on-boarded; it does not exclude them for a full trailing 12-month period. Given that we assess our net revenue retention rate on a rolling basis, new clients are included in the average monthly recurring revenue calculation in both the numerator and the denominator following the initial month in which a client subscribes for our services because this ensures we then capture any changes in the monthly recurring revenue whether they be upgrades, downgrades or losses in revenue. SpringBig’s management is focused on assessing subscription revenue on a rolling, monthly basis, particularly as SpringBig has experienced clients frequently upgrading soon after becoming client.
As noted above, neither the Base Revenue nor the adjustments used in calculating our net revenue retention rate include excess usage revenues. By calculating the metric in this manner, this measure reflects the growth in client subscription revenue, and as described above, represents a composite of clients who have upgraded their services as well as lost clients. This metric is useful to management, in particular, as it allows management to monitor, among other things, revenue-increasing activities, as we frequently upgrade clients relatively quickly after initial engagement. Clients of SpringBig will frequently first engage at a relatively low entry level of subscription and as they increase the size of their database of customers enrolled and/or increase the cadence and scale of message campaigns (e.g., exceed the communication credits under their original subscription), many clients upgrade to a higher subscription level, rather than incurring excess use charges.
Our net revenue retention rate may fluctuate over the long-term as clients that have consumed our platform for an extended period of time become a larger portion of both our overall client base and as the business size increases; as the “denominator” of the average monthly recurring revenue increases, the ratio may then reduce.
54

TABLE OF CONTENTS

We view a net revenue retention rate exceeding 100% as positive, as it indicates expansion and growth within the business. Such ratio will be greater than 100% provided that upgrades in subscriptions exceed losses and the net revenue retention rate could be below 100% in the event SpringBig experienced losses that were not offset by client upgrades.
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 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 measures 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.
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 it 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 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.
A reconciliation of net loss to non-GAAP EBITDA is as follows for the three months ended March 31, 2021 and 2022:
 
Quarter ended March 31,
 
2021
2022
 
(dollars in thousands)
Revenue
$5,209
$6,364
Net Loss
(1,118)
(2,866)
EBITDA
(1,113)
(2,718)
55

TABLE OF CONTENTS

A reconciliation of net loss to non-GAAP EBITDA and Adjusted EBITDA is as follows for the years ended December 31, 2020 and 2021:
 
Year ended
December 31,
 
2020
2021
 
(dollars in thousands)
Net Loss
$(1,598)
$(5,750)
Interest income
(3)
(3)
Depreciation expense
19
173
EBITDA
(1,582)
(5,580)
Forgiveness of PPP loan
(781)
Adjusted EBITDA
(1,582)
(6,361)
Components of Our Results of Operations
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 set amount) and optional purchases of additional credits. The Company also generates revenue through the customers’ purchasing the use of the Company’s software. Such purchases include a certain amount credits that the customer can utilize over a period of six to twelve months.
Cost of Revenue
Cost of revenue primarily consists of amounts payable to distributors of messages on behalf of the Company’s customers across cellular networks and integrations. We expect our cost of revenue to continue to increase on an absolute basis but that as a percentage of revenue it is expected to decline slightly as we scale our business.
Gross Profit and Gross Margin
Gross profit is calculated by taking revenue less cost of revenue. Gross profit is generally impacted by revenues and the cost of revenue being correlated with revenue. Gross margin is defined as gross profit as a percentage of revenue.
Selling, Servicing and Marketing Expenses
Selling, servicing and marketing expenses consist of salaries, benefits, travel expense and incentive compensation for our sales, servicing and marketing employees. In addition, sales, servicing and marketing expenses include business acquisition marketing, events cost, and branding and advertising costs. We expect our sales, servicing and marketing expenses to increase on an absolute basis as we enter new markets and continue to scale our business. Over the longer term, we expect sales, servicing and marketing expense to reduce as a percentage of revenue, however, we may experience fluctuations in some periods as we enter and develop new markets or have large one-time marketing projects.
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 ASC 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 and expect our technology and software development expenses will increase in absolute terms but we expect the expense to reduce as a percentage of revenue as our operations grow.
56

TABLE OF CONTENTS

General and Administrative Expenses
General and administrative expenses consist primarily of payroll and related benefit costs for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance, and other occupancy expenses. General and administrative expenses also include professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by increases in headcount required to support business growth and meeting our obligations as a public company.
Results of Operations
The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Comparison of Quarters Ended March 31, 2021 and 2022
 
Quarter Ended March 31,
Change
 
2021
2022
($)
(%)
 
(dollars in thousands)
Revenue
$5,209
$6,364
$1,115
22%
Cost of revenue
1,594
1,843
249
16%
Gross profit
3,615
4,521
906
25%
Operating expenses:
 
 
 
 
Selling, servicing and marketing
2,071
2,943
872
42%
Technology and software development
1,551
2,637
1,086
70%
General and administrative
1,106
1,659
553
50%
Depreciation expense
6
59
53
883%
Total operating expenses
4,734
7,298
2,564
54%
Loss from operations
(1,119)
(2,777)
(1,658)
148%
Interest income
1
 
 
Interest expense
(89)
 
 
Net Income before taxes
(1,118)
(2,866)
(1,748)
156%
Provision for income taxes
 
 
Net Loss
(1,118)
(2,866)
(1,748)
156%
Revenue
Total revenue increased by $1.2 million, or 22% for the quarter ended March 31, 2022 compared to the same period in 2021.
The number of retail clients increased by 66% from 890 at March 31, 2021 to 1,475 at March 31, 2022.
Subscription revenue from retail clients was $4.7 million for the quarter ended March 31, 2022, representing an increase of $1.4 million, or 43% compared with the same period in 2021. Excess use revenue reduced by $0.3 million, or 17%, compared with the same period in 2021 as a result of clients having upgraded to higher subscription levels (and, accordingly, incurring fewer excess use fees during the quarter ended March 31, 2022).
The Company’s net revenue retention rate was 107% for the twelve months ending March 31, 2022, with the ratio continuing to exceed 100% as a result of subscription upgrades exceeding the value of lost subscriptions.
SpringBig’s revenue growth has not yet been significantly impacted by the legislation adopted in 2020 and 2021 in New Jersey, Connecticut and New York, as there tends to be a lag between the adoption of legislation and significant revenue generation for the Company.
Cost of Revenue
Cost of revenue increased by $0.2 million, or 16%, for the quarter ended March 31, 2022, compared to the same period in 2021. The increase was primarily due to increasing volume in communications distributed by clients, with
57

TABLE OF CONTENTS

total messages in the quarter ending March 31, 2022 of 436 million being 42 million or 11% 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 from 69% for the quarter ended March 31, 2021 to 71% for the same period in 2022, or by 2%.
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.
Selling, servicing and marketing expenses increased by $0.9 million, or 42%, for the quarter ended March 31, 2022, compared to the same period in 2021. As we continue to scale the business, we have continued to increase the scale of the sales, service and marketing operation, including by increasing employee headcount in those areas. In March 2021, we had a total of 72 employees in these functional areas, as compared to 103 employees in March 2022, an increase of 43% in headcount in our sales, service and marketing operations. We also increased our marketing activity to build and enhance our branding and have added additional expense in implementing sales and marketing automation tools across the organization.
Technology and software development expenses increased by $1.1 million, or 70%, for the quarter ended March 31, 2022, compared to the same period in 2021. We have increased the number of employees in these areas from 43 at March 2021 to 53 at March 2022, and, in addition, we experienced additional expense arising from the use of contract developers. Technology and software development expenses were 41% of revenue in the quarter to March 2022.
General and administrative expenses increased by $0.6 million, or 50%, for the quarter ended March 31, 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 we also incurred increases in professional services expenses.
Depreciation expenses primarily consist of depreciation on computer equipment, furniture and fixtures, leasehold improvements, and amortization of purchased intangibles. Depreciation expenses increased to $59,000 for the quarter ended March 31, 2022 compared to $6,000 in the same period in 2021.
Interest Income (Expense)
Interest expense was $89,000 in the quarter ended March 31, 2022 due to interest payable on the convertible notes issued in February 2022. In the quarter ended March, 2021 we earned interest income of $6,000 on cash balances held by the company.
Liquidity and Cash Flow
On February 25, 2022, SpringBig entered into convertible notes with two existing shareholders in aggregate for a principal sum of $7.0 million. On the closing of the business combination with Tuatara Capital Acquisition Corporation, the outstanding principal balance of the convertible notes became due and payable and was satisfied by the issuance to the note holders of common shares issuable under an agreement entered into under the applicable PIPE subscription agreements.
We believe that the balance of cash, which was $6.8 million as of March 31, 2022, will be sufficient to satisfy our operating cash requirements over the next twelve months and beyond.
As of March 31, 2022, the majority of our cash was held for general corporate purposes.
58

TABLE OF CONTENTS

During the quarter ending March 31, 2022 our cash increased by $4.5 million compared with a cash decrease of $1.3 million in the same quarter last year.
 
Quarter ended March 31,
 
2021
2022
 
(dollars in thousands)
Net cash used in operating activities
(1,151)
(2,399)
Net cash used in investing activities
(164)
(73)
Net cash provided by financing activities
7,006
Net increase (decrease) in cash
(1,315)
4,543
Cash used in operating activities consists primarily of net loss adjusted for certain non-cash items, including depreciation and amortization, non-cash stock compensation expenses and the effect of changes in working capital and other activities.
Net cash used in operating activities was $2.4 million for the quarter ended March 31, 2022. This amount primarily consisted of a net loss of $2.9 million offset by a $0.4 million reduction in accounts receivable.
SpringBig ordinarily does not have significant non-cash items impacting the net income (loss) therefore there is a reasonably close correlation between net income (loss) and cash from operating activities, although short-term movements in working capital can impact any particular period.
SpringBig has insignificant capital expenditure needs and, in the quarters ended March 31, 2021 and 2022, incurred expenditure of $42,000 and $73,000 respectively.
The only material cash provided by financing activities was $7.0 million in February 2022 from the issuance of convertible notes.
Comparison of Year Ended December 31, 2020 and 2021
 
Year Ended December 31,
Change
 
2020
2021
($)
(%)
 
(dollars in thousands)
Revenue
$15,183
$24,024
$8,841
58%
Cost of revenue
4,978
6,929
1,951
39%
Gross profit
10,205
17,095
6,890
68%
 
Year Ended December 31,
Change
 
2020
2021
($)
(%)
 
(dollars in thousands)
Operating expenses:
 
 
 
 
Selling, servicing and marketing
$4,843
$10,185
$342
110%
Technology and software development
4,391
8,410
4,019
92%
General and administrative
2,553
4,859
2,306
90%
Depreciation expense
19
173
154
810%
Total operating expenses
11,806
23,627
11,821
110%
Loss from operations
(1,601)
(6,532)
(4,931)
308%
Interest and other income
3
784
781
26033%
Net Income before tax
(1,598)
(5,748)
(4,150)
260%
Provision for income taxes
2
Net Loss
(1,598)
(5,750)
(4,152)
260%
Revenue
Total revenue increased by $8.8 million, or 58% for the year ended December 31, 2021 compared to the same period in 2020. The increase was driven by the number of retail clients increasing by 63% from 759 to 1,240 during the year.
59

TABLE OF CONTENTS

Subscription revenue from retail clients was $14.2 million for the year ended December 31, 2021 representing an increase of $4.6 million, or 48% compared with the same period in 2020. Excess use revenue increased by $3.1 million, or 65%, compared with the same period in 2020 as a result of clients increasing messaging cadence.
The revenue growth experienced by SpringBig in 2021 as compared to 2020 was primarily through a mixture of clients upgrading their subscriptions (which frequently occurs shortly after such client becomes a client of SpringBig), excess use revenue (as described above), and new clients.
The Company’s net revenue retention rate was 110% in 2021, as compared to 128% in 2020. This change was driven, in part, by SpringBig experiencing a high level of client upgrades to subscriptions in 2020, which added 45% to the net revenue retention rate in 2020, as compared to client upgrades adding 41% to the net revenue retention rate in 2021. The impact of losses in client revenue was to reduce the ratio by 17% and 31% in 2020 and 2021, respectively. Further, the net revenue retention rate decreased as the overall business size increased in 2021 versus 2020. As described above under “Key Operating and Financial Metrics—Other Key Operating Metrics,” as the “denominator” of the average monthly recurring revenue of the business increases, the ratio of that amount to average monthly recurring revenue adjusted for upgrades and lost revenue will tend to reduce.
The majority of SpringBig’s revenues are generated from “existing” clients (e.g., clients that engaged SpringBig prior to the applicable period) or those expanding their usage of the Company’s services. Revenue from existing clients was approximately 83% for the year ended December 31, 2021 and approximately 71% for the year ended December 31, 2020, with the remainder of our revenue attributable to “new” clients (e.g., clients that engaged SpringBig during the applicable period). Revenue increased for “existing” clients of SpringBig, accounting for $20 million in revenue in 2021 as compared to $10.8 million in 2020. Revenue attributable to “new” clients in 2021 accounted for $4 million, as compared to $4.4 million in 2020.
SpringBig’s revenue growth in 2021 was not significantly impacted by the legislation adopted in 2020 and 2021 in New Jersey, Connecticut and New York, as there tends to be a lag between the adoption of legislation and significant revenue generation for the Company.
Cost of Revenue
Cost of revenue increased by $2.0 million, or 39%, for the year ended December 31, 2021, compared to the same period in 2020. The increase was primarily due to increasing volume in communications distributed by clients. The percentage increase is lower than our revenue growth over the same period and therefore our gross margin percentage increased from 67% for the year ended December 31, 2020 to 71% for the same period in 2021, or by 4%.
Operating Expenses
Selling, servicing and marketing expenses increased by $5.3 million, or 110%, for the year ended December 31, 2021, compared to the same period in 2020. As we continue to scale the business, we significantly increased the scale of the sales, service and marketing operation, including by increasing employee headcount in those areas. In December 2020, we had a total of 57 employees in these functional areas whereas that had increased to 96 in December 2021, an increase of 68% in headcount in our sales, service and marketing operations. We also increased our marketing activity to build and enhance our branding and have added additional expense in implementing sales and marketing automation tools across the organization.
Technology and software development expenses increased by $4.0 million, or 92%, for the year ended December 31, 2021, compared to the same period in 2020. We have increased the number of employees in these areas from 38 at December 2020 to 49 at December 2021, and, in addition, we experienced additional expense arising from the use of contract developers. Technology and software development expenses were 35% of revenue in the year to December 2021.
General and administrative expenses increased by $2.3 million, or 90%, for the year ended December 31, 2021, compared to the same period in 2020 due to additional rent expense, including the opening of an office in Toronto, higher personnel-related costs as we increased headcount and also incurred increases in professional services expenses.
Depreciation expenses primarily consist of depreciation on computer equipment, furniture and fixtures, leasehold improvements, and amortization of purchased intangibles. Depreciation expenses increased to $173,000 for the year ended December 31, 2021, a 810% increase compared to the same period in 2021. We expect depreciation and amortization expenses to increase for the foreseeable future as we scale our business.
60

TABLE OF CONTENTS

Interest and Other Income
In May 2020, SpringBig received loan proceeds in the amount of $780,948 under the Paycheck Protection Program (“PPP”), established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) in response to the COVID-19 pandemic. On August 11, 2021, SpringBig received full forgiveness of the PPP loan proceeds, which is reflect in Interest and other income. Interest and other income for the years ended December 31, 2020 and 2021 reflects interest income earned on cash deposits.
Seasonality
Our rapid growth and the benefits of changes in legislation have historically offset seasonal trends in our business and we have seen consistent quarterly growth in revenues. While seasonality has not had a significant impact on our results in the past, our clients may experience seasonality in their business which in turn could impact the revenue generated from them. Our business may become more seasonal in the future and historical patterns in our business may not be a reliable indicator of future performance.
Liquidity and Capital Resources
The following tables show our cash, accounts receivable and working capital as of the dates indicated:
 
Years ended December 31,
 
2020
2021
 
(dollars in thousands)
Cash
$10,447
$2,227
Accounts receivable, net
1,141
3,045
Working capital
(930)
3,895
As of December 31, 2021, the majority of our cash was held for general corporate purposes. On February 25, 2022, SpringBig entered into convertible notes with two existing shareholders in aggregate for a principal sum of $7.0 million. The outstanding principal balance of the convertible notes became due and payable in connection with the closing of the business combination and was satisfied by the issuance to the note holders of Common Shares issuable under an agreement entered into under the applicable PIPE subscription agreements. We believe that our existing cash and cash available from the convertible notes will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section captioned “Risk Factors.” We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
Sources of Liquidity
Since our inception, we have financed our operations and capital expenditures primarily through the private sales of equity securities. Since inception and through the end of fiscal 2020, we raised a total of $17.0 million from the sale of equity securities, net of costs and expenses associated with such financings and redemptions of common stock. Additionally, in connection with and following the execution of the merger agreement, we and Tuatara entered into certain incremental financing agreements: (a) through a subscription agreement with Tuatara, certain investors purchased an aggregate of 1,310,000 shares of common stock of SpringBig, for $10.00 per share, for an aggregate purchase price of $13,100,000, and certain of the subscription investors that are existing shareholders of SpringBig entered into convertible notes with SpringBig, for an aggregate principal sum of $7,000,000 (the “convertible notes”); (b) certain institutional investors have agreed, through a securities purchase agreement with Tuatara (the “Notes and Warrants Purchase Agreement”), to purchase up to $22.0 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 (the “Notes”) 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 the closing date of such sale (the “Warrants”) to be sold in two tranches, see “L1 Capital Financing”; and (c) an equity line facility between CF Principal Investments LLC and Tuatara for up to $50.0 million in aggregate gross purchase price of newly issued common stock after the closing of the business combination. We expect to use the proceeds from these incremental financing agreements for general working capital purposes and potential acquisition opportunities (though, as described below, SpringBig is not party to any agreement or letter of intent with respect to potential acquisitions).
61

TABLE OF CONTENTS

On the closing of the business combination, the outstanding principal balance of the convertible notes matured and was satisfied by the issuance of 700,000 shares of Common Shares pursuant to the terms of the convertible notes and the applicable PIPE subscription agreements. The closing of the transactions contemplated by the subscription agreements occurred immediately prior to the closing.
The first tranche of Notes closed upon completion of the merger, and the second tranche will close 60 days after the effective date of a resale registration statement covering the resale of the shares of the Company’s common stock underlying the Notes and the Warrants issued in the first tranche or at such time as is agreed between the Company and the Investor. SpringBig and the Investor entered into a registration rights agreement at the closing of the first tranche that will require SpringBig to file a resale registration statement covering the resale of the shares of the Company’s common stock underlying the Notes and Warrants issued in each of the first tranche and second tranche, respectively, within twenty days of the closing of each such tranche. As of the date hereof, there is one existing institutional investor that has subscribed for a total of $16,000,000 principal amount of Notes, $5,000,000 of which is subject to meeting the conditions necessary to close the second tranche. There can be no guarantees that additional investors will subscribe for the remaining $6,000,000 principal amount of Notes and therefore SpringBig may not receive the entire $22,000,000 principal amount of Notes under the Notes and Warrants Purchase Agreement. We believe the likelihood that the holder of the Warrants will exercise the Warrants, and therefore the amount of additional cash proceeds that we would receive with respect to such Warrants, is dependent upon the trading price of our Common Shares, which is currently below the $12.00 exercise price and no assurances can be made that we will receive proceeds from the Warrants. If the trading price for our Common Shares is less than $12.00 per share (or the adjusted exercise price in the event of dilutive issuances), we believe the holder of the Warrants will be unlikely to exercise their warrants. Accordingly, there is no assurance that the holder of the Warrants will elect to exercise any or all of such warrants and, accordingly, no assurance that we will receive any proceeds from the exercise of the warrants.
The Company may, from time to time at its option to sell to CF Principal Investors LLC newly issued common stock pursuant to the terms of the Purchase Agreement. The use of the Facility under the Purchase Agreement is subject to certain conditions, including the effectiveness of the Cantor Resale Registration Statement. Therefore, funds from the $50 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.
Excluding any potential cash proceeds from the exercise of Warrants by the Investor or for the sale of Common Shares under the Facility, we believe that our existing cash and cash equivalents, including net proceeds received from the L1 Capital Financing and the proceeds from the subscription investors and business combination at Closing, should be sufficient to meet our anticipated operating cash needs for at least the next 12 months. 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 this prospectus.
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 through the incurrence of 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. To the extent that the Notes and Warrants are converted into shares of common stock and shares of common stock are issued pursuant to the equity line facility, substantial amounts of SpringBig’s common stock will be issued, which would cause dilution and may result in substantial decreases to SpringBig’s stock price. See “Risk Factors—Risks Related to the L1 Financing—The issuance of our Common Shares in connection with the Notes and Warrants Purchase Agreement could cause substantial dilution, which could materially affect the trading price of our Common Shares.” The 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 Notes remain outstanding: (i) incur additional indebtedness and guarantee indebtedness; (ii) incur liens or allow mortgages or other encumbrances; (iii) prepay, redeem, or repurchase certain other debt; (iv) pay dividends or make other distributions or repurchase or redeem its capital stock; (v) sell assets or enter into or effect 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
62

TABLE OF CONTENTS

subsidiaries); (vi) issue additional equity (outside of the Facility, issuances under our equity compensation plan and other limited exceptions); (vii) enter into variable rate transactions (exclusive of the Facility); and (viii) adopt certain amendments to our governing documents, among other restrictions. 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. See “Risk Factors—Risks Related to the L1 Financing—The Notes and related agreements restrict our ability to obtain additional debt and equity financing which may restrict our ability to grow and finance our operations.” 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.
Historical Cash Flows
 
Year ended
December 31,
 
2020
2021
 
(dollars in thousands)
Net cash used in operating activities
$(1,006)
$(7,884)
Net cash used in investing activities
(195)
(374)
Net cash provided by financing activities
9,025
38
Net increase (decrease) in cash
7,824
(8,220)
Net Cash Used in Operating Activities
Cash used in operating activities consists primarily of net loss adjusted for certain non-cash items, including depreciation and amortization, non-cash stock compensation expenses and the effect of changes in working capital and other activities.
Net cash used in operating activities was $7.9 million for the year ended December 31, 2021. This amount primarily consisted of a net loss of $5.8 million, the non-cash $0.8 million forgiveness of our PPP loan and a $1.9 million increase in accounts receivable due to the growth in revenues offset by certain other changes in working capital and non-cash $0.6 million stock-based compensation expenses and non-cash $0.2 million depreciation and amortization expense.
Net cash used in operating activities in 2020 was $1.0 million. This amount primarily consisted of a net loss of $1.6 million and changes in working capital.
SpringBig ordinarily does not have significant non-cash items impacting the net income (loss) therefore there is a reasonably close correlation between net income (loss) and cash from operating activities, although short-term movements in working capital can impact any particular period.
Net Cash Used in Investing Activities
SpringBig has insignificant capital expenditure needs and, in the years ended December 31, 2020 and 2021, incurred expenditure of $0.0 million, $0.2 million and $0.3 million, respectively.
In the year ended December 31, 2021, in addition to capital expenditures of $0.3 million, we also incurred a cash expense of $0.1 million to acquire Beaches Development Limited in Toronto, Canada.
Net Cash Provided by Financing Activities
The only material cash provided by financing activities was $8.2 million in August 2020 from the issuance of Preferred Stock, net of common stock redemptions and expenses, and $0.8 million from a Paycheck Protection Program loan (“PPP loan”) under the CARES Act obtained in May, 2020. The PPP loan was forgiven in August 2021. In the year ended December 31, 2021 an insignificant amount of proceeds was realized from the exercise of employee stock options.
Off Balance Sheet Arrangements
We did not have any off-balance sheet arrangements in any of the periods presented in this prospectus, except for operating leases as discussed below.
63

TABLE OF CONTENTS

Contractual Obligations
As of December 31, 2021, we leased various office facilities, including our corporate headquarters in Boca Raton, Florida and offices in Seattle, Washington and Toronto, Canada under non-cancellable operating lease agreements that expire on various dates through November 2024. We recognize rent expense on a straight-line basis over the lease periods. We do not have any debt or material capital lease obligations and most of our property, equipment and software have been purchased with cash. Our future minimum payments under non-cancelable operating leases for office facilities are as follows as of December 31, 2021:
 
Payments Due by Period
 
Total
Less
than
1 year
1 - 3 
years
3 - 5
years
More
than
5 years
 
(dollars in thousands)
Operating lease obligations
1,098
471
627
The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding.
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
We believe that the assumptions and estimates associated with revenue recognition, software development costs, income taxes and equity-based compensation have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see Note 1 of the notes to our consolidated financial statements included elsewhere in this prospectus.
Revenue Recognition
The Company has adopted ASC 606, Revenue from Contracts with Customers, which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services.
Software Development Costs
We capitalize certain costs associated with technology and software development in accordance with ASC 350-40, Intangibles - Goodwill and Other - Internal Use Software. Capitalized costs are generally amortized over a three-year period commencing on the date that the specific software product is placed in service. In practice, we have not capitalized any material software development costs since expenditures are deemed to be outside of the scope of those required to be capitalized in accordance with ASC 350-40.
Quantitative and Qualitative Disclosures about Market Risk
We have operations within the United States and limited operations with customers located in Canada, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Interest Rate Fluctuation Risk
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.
The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Because our cash and cash equivalents have a relatively short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes. In future periods, we will continue to evaluate our investment policy in order to ensure that we continue to meet our overall objectives.
64

TABLE OF CONTENTS

Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. We continue to monitor the impact of inflation in order to minimize its effe