The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included in this Form 10-K, as well as the
discussion under "Item 1A. Risk Factors." For further discussion of the
business, industry, our products and services, competitive strengths, and growth
strategy, see "Item 1. Business." Unless stated otherwise, the comparisons
presented in this discussion and analysis refer to the year-over-year comparison
of changes in our financial condition and results of operations as of and for
the fiscal years ended June 30, 2022 and June 30, 2021. Discussion of fiscal
year 2021 items and the year-over year comparison of changes in our financial
condition and results of operations as of and for the fiscal years ended June
30, 2021 and June 30, 2020 can be found in Part II, "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" of our
Annual Report on Form 10-K for the fiscal year ended June 30, 2021, which was
previously filed with the SEC on September 3, 2021.

Certain prior period amounts have been reclassified to conform with current year
presentation. The changes in presentation did not affect our total revenues,
total costs of sales, gross profit, total operating expenses, operating loss,
net loss or net loss per common share. For further information on the
presentation changes, see Item 1. Financial Statements - Note 2. Accounting
Policies.

The following discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements. Furthermore, the period to
period comparison of our historical results is not necessarily indicative of the
results that may be expected in the future.

COMPANY OVERVIEW

Cantaloupe, Inc., previously known as USA Technologies, Inc., is organized under
the laws of the Commonwealth of Pennsylvania. We are a digital payments and
software services company that provides end-to-end technology solutions for the
unattended retail market. We are transforming the unattended retail world by
offering a single platform for self-service commerce which includes integrated
payments processing and software solutions that handle inventory management,
pre-kitting, route logistics, warehouse and back-office management. Our
enterprise-wide platform is designed to increase consumer engagement and sales
revenue through digital payments, digital advertising and customer loyalty
programs, while providing retailers with control and visibility over their
operations and inventory. As a result, customers ranging from vending machine
companies to operators of micro-markets, car wash, electric vehicle charging
stations, commercial laundry, kiosks, amusements and more, can run their
businesses more proactively, predictably, and competitively.

The Company's fiscal year ends June 30. The Company generates revenue in
multiple ways. During the fiscal years ended June 30, 2022 and June 30, 2021, we
derived approximately 82% and 83% respectively, of our revenue from subscription
and transaction fees and approximately 18% and 17%, respectively, of our revenue
from equipment sales. Active Devices on our service include point of sale
("POS") electronic payment devices, certified payment software, or the servicing
of similar third-party installed POS terminals. Customers can obtain POS
electronic payment devices from us in the following ways:

• The purchase of devices directly from the Company or from one of its authorized resellers;

•Financing arrangements under the Company’s QuickStart program, which are sixty-month non-cancellable lease-purchase agreements directly with the Company; and

•Participation in a monthly bundled subscription under the company’s Cantaloupe ONE program, which consists of 36-month leases that switch to monthly contracts after the initial subscription commitment period.

Strong points

Highlights of the Company for the year ended June 30, 2022 are below:

• Approximately 24,000 active customers and 1.14 million active devices (as defined in point 1. Activity) connected to our service.

•In August 2021, we completed the acquisition of certain assets and liabilities
of Delicious Nutritious LLC, doing business as Yoke Payments ("Yoke"), a micro
market payments company. Through the acquisition, Yoke's POS platform offers
self-checkout while seamlessly integrating with Cantaloupe's inventory
management and payment processing platforms. During the year, we implemented the
newly enhanced Yoke Micro Market Platform upgrade that includes new features and
functionality for Yoke Pay, Yoke POS, and the Yoke Portal.
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•A successful rollout of the ePort Engage and ePort Engage Combo devices which
began shipping during the current fiscal year. ePort Engage series is our next
generation of digital touchscreen devices for the market which provides
retailers the ability to captivate consumers in new ways and enables truly
frictionless purchasing.

•Cantaloupe announced and launched a bundled subscription model, the Cantaloupe
ONE Platform which provides operators the flexibility and predictability of a
monthly, fixed subscription amount covering the hardware and service fees.

•Entered into an amended and restated credit agreement (the "Amended JP Morgan
Credit Facility") with JP Morgan Chase Bank, N.A. in March 2022 that provides
for a $15 million secured revolving credit facility and a $25 million secured
term facility, which replaces our previous 2021 JPMorgan Credit Facility.

•The Company announced a partnership with HIVERY, a data-science company that
specializes in Artificial Intelligence ("AI") technology to streamline category
management for retailers in the consumer packaged goods industry. The
partnership aims to provide the Company's Seed customers an enhanced
merchandising technology leveraging AI and Machine Learning to improve vending
machine performance. The integration was available to customers as of June 30,
2022.

•The Company expanded its machine compatibility for remote price change (RPC), a
feature within the Seed suite of services that enables customers to make price
changes to products at vending machines remotely. Customers started subscribing
to RPC in the quarter ended June 30, 2022.
COVID-19 Update

The Company, its employees, and its customers operate in geographic locations in
which its business operations and financial performance continues to be affected
by the COVID-19 pandemic. While businesses, schools and other organizations
re-open, which has led to increased foot-traffic to distributed assets
containing our electronic payment solutions, the emergence of new strains and
variants and resurgence of the virus, such as the outbreak of the Omicron
variant in early calendar year 2022, have and may in the future lead to
additional shutdowns and closures that impact our operations and financial
results. Such impacts to our financial statements have in the past included, and
may in the future include the impairment of goodwill and intangible assets,
impairment of long-lived assets including operating lease assets, property and
equipment and allowance for doubtful accounts for accounts and finance
receivables. We have concluded that there are no material impairments as a
result of our evaluation for the year ended June 30, 2022. Where applicable, we
have incorporated judgments and estimates of the expected impact of COVID-19 in
the preparation of the financial statements based on information currently
available. These judgments and estimates may change, as new events develop and
additional information is obtained, and are recognized in the consolidated
financial statements as soon as they become known.

While we are encouraged by our strong operating and financial results, we
continue to monitor the evolving situation and follow guidance from federal,
state and local public health authorities. Given the potential uncertainty of
the situation, the Company cannot, at this time, reasonably estimate the
longer-term repercussions of COVID-19 on our financial condition, results of
operations or cash flows.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles ("U.S. GAAP", "GAAP"), and they conform
to general practices in our industry. The preparation of financial statements
and related disclosures in conformity with U.S. GAAP requires management to make
judgments, assumptions, and estimates that affect the amounts reported in the
consolidated financial statements and accompanying notes.

Critical accounting policies require numerous estimates and strategic or
economic assumptions that may prove inaccurate or subject to variations and may
significantly affect our reported results and financial position for the period
or in future periods. Changes in underlying factors, assumptions, or estimates
in any of these areas could have a material impact on our future financial
condition and results of operations. We apply critical accounting policies
consistently from period to period and intend that any change in methodology
occur in an appropriate manner.

Accounting policies currently deemed critical to our business operations and the
understanding of our results of operations are listed below. For a detailed
discussion on the application of these and other accounting policies, see Note 2
to our consolidated financial statements included in this Annual Report.

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Revenue recognition. The Company derives its revenue primarily from the sale or rental of equipment and services in the small unattended outlet market.

The Company's application of the accounting principles in U.S. GAAP related to
the measurement and recognition of revenue requires us to make judgments and
estimates. Complex arrangements may require significant judgment in contract
interpretation to determine the appropriate accounting.

The Company enters into arrangements with multiple performance obligations,
which may include various combinations of equipment and services. Our equipment
and service deliverables qualify as separate performance obligations and can be
sold on a standalone basis. A deliverable constitutes a separate unit of
accounting when it has standalone value and, where return rights exist, delivery
or performance of the undelivered items is considered probable and substantially
within the Company's control. For these multiple deliverable arrangements, the
Company allocates revenue to the deliverables based on their relative standalone
selling prices. To the extent that a deliverable is subject to specific guidance
on whether and/or how to allocate the consideration in a multiple element
arrangement, that deliverable is accounted for in accordance with such specific
guidance. The Company limits the amount of revenue recognition for delivered
items to the amount that is not contingent on the future delivery of products or
services or meeting other future performance obligations.

Capitalization of internal-use software and cloud computing arrangements. We
have significant expenditures associated with the technological maintenance and
improvement of our network and technology offerings. These expenditures include
both the cost of internal employees, who spend portions of their time on various
technological projects, and the use of external temporary labor and consultants.
Capitalization of internal-use software occurs when we have completed the
preliminary project stage, management authorizes the project, management commits
to funding the project, it is probable the project will be completed and the
project will be used to perform the function intended. We are required to assess
these expenditures and make a determination as to whether the costs should be
expensed as incurred or are subject to capitalization. In making these
determinations, we consider the stage of the development project, the
probability of successful development and if the development is resulting in
increased features and functionality. In addition, if we determine that a
project qualifies for capitalization, the amount of capitalization is subject to
various estimates, including the amount of time spent on the development work
and the cost of internal employees and external consultants. Internal-use
software is included within Property and equipment, net on our Consolidated
Balance Sheets and is amortized over its estimated useful life, which is
typically 3 to 7 years.

We capitalize certain costs related to hosting arrangements that are service
contracts (cloud computing arrangements) following the internal-use software
capitalization criteria described above. Our cloud computing arrangements
involve services we use to support internal corporate functions, our platforms
and technology offerings. Capitalized costs relating to cloud computing
arrangements are included within Prepaid expenses and other current assets or
Other assets on our Consolidated Balance Sheets and are amortized on a
straight-line basis over the estimated useful life, which is typically 3 to 5
years.

Goodwill. We test goodwill for impairment at least annually, or more frequently
if events or changes in circumstances indicate that impairment may have
occurred. Goodwill is reviewed for impairment utilizing either a qualitative or
a quantitative goodwill impairment test. If we choose to perform a qualitative
assessment and determine the fair value more likely than not exceeds the
carrying value, no further evaluation is necessary. When we perform the
quantitative goodwill impairment test, we compare the fair value of our
reporting unit to its carrying value. If the fair value of the reporting unit
exceeds its carrying value, then goodwill is not considered impaired. An
impairment charge is recognized for the amount by which, if any, the carrying
value exceeds the reporting unit's fair value. However, the loss recognized
cannot exceed the reporting unit's goodwill balance.

The quantitative impairment test process requires valuation of the reporting
unit, which we determine using the income approach, the market approach or a
combination of the two approaches. Under the income approach, we calculate the
fair value of the reporting unit based on the present value of estimated future
cash flows derived from assumptions that include expected growth rates and
revenues, projected expenses, discount rates, capital expenditures and income
tax rates. Under the market approach, we estimate the fair value based on the
quoted stock price, recent equity transactions of our business, market
transactions involving similar businesses and market comparables.

The Company has selected April 1 as its annual goodwill impairment testing date.
The Company has concluded there has been no impairment of goodwill during the
years ended June 30, 2022, 2021, or 2020. As of the date of our annual
impairment test for fiscal year 2022, the fair value of our reporting unit
exceeded its carrying value by a significant margin. Subsequent to our annual
impairment test, no indicators of impairment were identified. As of June 30,
2022, if our estimate of the fair value of our reporting unit was 10% lower, no
goodwill impairment would have existed.

Depreciation of long-lived assets. We review long-lived assets, such as finite-life intangible assets, property, plant and equipment, and operating lease right-of-use assets for potential impairment, when there is evidence that events or changes in circumstances

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which indicate that the carrying value of an asset may not be recoverable. If
the sum of the expected future undiscounted cash flow is less than the carrying
amount of the asset, an impairment is indicated. A loss is then recognized for
the difference, if any, between the fair value of the asset (as estimated by
management using its best judgment) and the carrying value of the asset. If
actual market value is less favorable than that estimated by management,
additional write-downs may be required. We recorded an impairment charge
relating to our operating lease right-of-use assets of $1.6 million for the
fiscal year ended June 30, 2021. There were no material impairment charges
recorded for the fiscal year ended June 30, 2022.

Allowances for Accounts and Finance Receivables. We maintain lifetime expected
loss allowances for accounts and finance receivables based on historical
experience of payment performance, current conditions of the customer, and
reasonable and supportable economic forecasts of collectability for the asset's
entire expected life, which is generally less than one year for accounts
receivable and five years for finance receivables. Historical loss experience is
utilized as there have been no significant changes in the mix or risk
characteristics of the receivable revenue streams used to calculate historical
loss rates. Current conditions are analyzed at each measurement date to reassess
whether our receivables continue to exhibit similar risk characteristics as the
prior measurement date, and determine if the reserve calculation needs to be
adjusted for new developments, such as a customer's inability to meet its
financial obligations. Reasonable and supportable macroeconomic trends also are
incorporated into the analysis. Estimating the allowances therefore requires us
to apply judgment in relying on historical customer payment experience,
regularly analyzing the financial condition of our customers, and developing
macroeconomic forecasts to adequately cover expected credit losses on our
receivables. By nature, such estimates are highly subjective, and it is possible
that the amount of receivables that we are unable to collect may be different
than the amounts initially estimated in the allowances.

Inventories. We determine the value of inventories using the lower of cost or
net realizable value. We write down inventories for the difference between the
carrying value of the inventories and their net realizable value. If actual
market conditions are less favorable than those projected by management,
additional write-downs may be required.

We estimate our reserves for inventory obsolescence by continuously examining
our inventories to determine if there are indicators that carrying values exceed
net realizable values. Experience has shown that significant indicators that
could require the need for additional inventory write-downs are the age of the
inventory, the length of its product life cycles, anticipated demand for our
products, changes to technical standards required by payment companies or by
law, and current economic conditions. While we believe that adequate write-downs
for inventory obsolescence have been made in the consolidated financial
statements, actual demand could be less than forecasted demand for our products
and we could experience additional inventory write-downs in the future.

Loss Contingencies. Loss contingencies are uncertain and unresolved matters that
arise in the ordinary course of business and result from events or actions by
others that have the potential to result in a future loss. Such contingencies
include, but are not limited to, litigation.

When a loss is considered probable and reasonably estimable, we record a
liability in the amount of our best estimate for the ultimate loss. When there
appears to be a range of possible costs with equal likelihood, liabilities are
based on the low-end of such range. However, the likelihood of a loss with
respect to a particular contingency is often difficult to predict and
determining a meaningful estimate of the loss or a range of loss may not be
practicable based on the information available and the potential effect of
future events and decisions by third parties that will determine the ultimate
resolution of the contingency. Moreover, it is not uncommon for such matters to
be resolved over many years, during which time relevant developments and new
information must be continuously evaluated to determine both the likelihood of
potential loss and whether it is possible to reasonably estimate a range of
possible loss.

Disclosure is provided for material loss contingencies when a loss is probable
but a reasonable estimate cannot be made, and when it is reasonably possible
that a loss will be incurred or when it is reasonably possible that the amount
of a loss will exceed the recorded provision. We regularly review all
contingencies to determine whether the likelihood of loss has changed and to
assess whether a reasonable estimate of the loss or range of loss can be made.
As discussed above, development of a meaningful estimate of loss or a range of
potential loss is complex when the outcome is directly dependent on negotiations
with or decisions by third parties, such as regulatory agencies, the court
system and other interested parties. Such factors bear directly on whether it is
possible to reasonably estimate a range of potential loss and boundaries of high
and low estimates.

Deferred Income Tax Assets and Liabilities. The carrying values of deferred
income tax assets and liabilities reflect the application of our income tax
accounting policies in accordance with applicable accounting standards and are
based on management's assumptions and estimates regarding future operating
results and levels of taxable income, as well as management's judgment regarding
the interpretation of the provisions of applicable accounting standards. The
carrying values of liabilities for income taxes currently payable are based on
management's interpretations of applicable tax laws and incorporate management's
assumptions and judgments regarding the use of tax planning strategies in
various taxing jurisdictions.

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We evaluate the recoverability of these deferred tax assets by assessing the
adequacy of future expected taxable income from all sources, including reversal
of taxable temporary differences, forecasted operating earnings and available
tax planning strategies. These sources of income inherently rely heavily on
estimates. We use our historical experience and our short and long-term business
forecasts to provide insight. To the extent we do not consider it more likely
than not that a deferred tax asset will be recovered, a valuation allowance is
established. Federal and state net operating loss carryforwards are reserved
with a full valuation allowance because, based on the available evidence, we
believe it is more likely than not that we would not be able to utilize those
deferred tax assets in the future. If the actual amounts of taxable income
differ from our estimates, the amount of our valuation allowance could be
materially impacted.

Sales tax reserve. The Company has recorded a contingent liability for sales
tax, included in accrued expenses in the Consolidated Balance Sheets. On a
quarterly basis, the Company accrues interest on the unpaid balance. The
estimated liability is adjusted upon the payment of sales tax related to the
accrual, the changes in state tax laws that may impact the accrual and the
expiration of the statute of limitations for open years under review. The
liability includes significant judgments and estimates that may change in the
future, and the actual liability may be different from our current estimate.
Changes to the sales tax reserve amount are recorded within general and
administrative expenses and interest expense in the Consolidated Statements of
Operations and accrued expenses in the Consolidated Balance Sheets.


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RESULTS OF OPERATIONS

The following table shows certain financial and non-financial data that
management believes give readers insight into certain trends and relationships
about the Company's financial performance. We believe the metrics (Active
Devices, Active Customers, Total Number of Transactions and Total Dollar Volume
of Transactions) are useful in allowing management and readers to evaluate our
strategy of driving growth in devices and transactions.

Active devices

Active Devices are devices that have communicated with us or have had a
transaction in the last twelve months. Included in the number of Active Devices
are devices that communicate through other devices that communicate or transact
with us. A self-service retail location that utilizes an ePort cashless payment
device as well as Seed management services constitutes only one device.

Active customers

The Company defines Active Customers as all customers with at least one active
device.
Total Number Of Transactions and Total Dollar Volume of Transactions

Transactions are defined as electronic payment transactions that are processed
by our technology-enabled solutions. Management uses Total Number of
Transactions and Total Dollar Volume of Transactions to monitor recovery from
the COVID-19 pandemic and to evaluate the effectiveness of our new customer
strategy and ability to leverage existing customers and partners.


                                                                        As of and for the years ended
                                             June 30, 2022                      June 30, 2021                      June 30, 2020
Devices:
Active Devices (thousands)                          1,137                              1,094                              1,079

Customers:
Active Customers                                   23,991                             19,834                             17,249

Volumes:
Total Number of Transactions
(millions)                                        1,052.8                              868.7                              881.1
Total Dollar Volume of Transactions
(millions)                                        2,286.7                            1,756.6                            1,729.4


Highlights of the year ended June 30, 2022 to understand:

• 1.14 million active devices in June 30, 2022 compared to 1.09 million at
June 30, 2021an increase of approximately 43,000 active devices, or 4.0%;

• 23,991 active customers serving us in June 30, 2022 compared to 19,834 at June 30, 2021an increase of 4,157 Active Customers, or 21%.

• $2.3 billion in trading volume for the year ended June 30, 2022
against 1.8 billion for the year ended June 30, 2021an augmentation of
$0.53 billioni.e. 30%.

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FINANCIAL HIGHLIGHTS

The following tables and graphs summarize our results of operations and material changes in our financial performance for the periods presented:

[[Image Removed: chart-2e70953c52224f5aa7f.jpg]][[Image Removed: chart-66771d52ff824cf4b45.jpg]]

[[Image Removed: chart-0209f3ba00654683ac1.jpg]]

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Revenues and Gross Profit

                                                   Year Ended June 30,                                     Percent Change
($ in thousands)                        2022               2021               2020            2022 v. 2021             2021 v. 2020

Income:

Subscription and transaction fees   $ 168,850          $ 139,242          $ 133,167                  21.3  %                      4.6  %
Equipment sales                        36,352             27,697             29,986                  31.2  %                     (7.6) %
Total revenue                         205,202            166,939            163,153                  22.9  %                      2.3  %

Costs of sales:
Cost of subscription and
transaction fees                      103,392             83,617             82,980                  23.6  %                      0.8  %
Cost of equipment sales                37,615             29,296             33,900                  28.4  %                    (13.6) %
Total costs of sales                  141,007            112,913            116,880                  24.9  %                     (3.4) %

Gross profit:
Subscription and transaction fees      65,458             55,625             50,187                  17.7  %                     10.8  %
Equipment sales                        (1,263)            (1,599)            (3,914)                 21.0  %                     59.1  %
Total gross profit                  $  64,195          $  54,026          $  46,273                  18.8  %                     16.8  %

Gross margin:
Subscription and transaction fees        38.8  %            39.9  %            37.7  %
Equipment sales                          (3.5) %            (5.8) %           (13.1) %
Total gross margin                       31.3  %            32.4  %            28.4  %


Revenues

Total revenues for the year ended June 30, 2022 was $205.2 million, consisting
of $168.9 million of subscriptions and transactions fees and $36.4 million of
equipment sales, compared to $166.9 million for the year ended June 30, 2021,
consisting of $139.2 million of subscription and transaction fees and $27.7
million of equipment sales. The $38.3 million increase in total revenue from the
prior year was attributable to a $29.6 million increase in subscription and
transaction fees and a $8.7 million increase in equipment sales. The increase in
subscription and transaction fees is primarily driven by increased processing
volumes, with an approximately 30% increase in total dollar volumes for the year
ended June 30, 2022 compared to the prior year. We are currently exceeding
pre-pandemic (COVID-19) levels of processing volumes. We continue to benefit
from a broader macroeconomic recovery across the United States as businesses,
schools and other organizations across the country continue to maintain normal
levels of operations. Increase in revenues is also attributed to continued focus
of management to grow our recurring services to our customer base and a 4% in
the Active Devices count compared to last year.

The increase in equipment sales relates to more equipment shipments in the
current year compared to last year driven by continued upgrades by our customers
from 3G to 4G network compatible devices and customers upgrading their hardware
devices to the latest payment technology security standards. We expect equipment
revenue to continue to be a significant contributor to our total revenues
through the 3G network discontinuation date in North America through the end of
the 2022 calendar year.

Costs of sales

Costs of sales increased $28.1 million for the year ended June 30, 2022 compared
to the year ended June 30, 2021. The increase in costs of sales is attributed to
a $19.8 million and $8.3 million increase in subscription and transaction costs
and equipment costs respectively. The increase in cost of subscription and
transaction fees was primarily driven by an corresponding increase in
transaction processing fees. Similarly, the increase in the cost of equipment
sales was driven by an increase in the volume of equipment sold during the
current fiscal year.
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Gross margin

Total gross margin decreased from 32.4% for year ended June 30, 2021 compared to
31.3% for the year ended June 30, 2022.  The decrease in gross margin was
primarily a result of a change in revenue mix with a higher percent of our total
revenue being transaction fees, which is inherently a lower margin revenue
stream. We were able to offset a portion of this decrease with an increase in
our transaction fees margin by lowering costs for our payment processor and
payment networks. Additionally, we have seen an increase in average price per
transaction relative to the same period in the prior year, which is additive to
our gross margin.

Lastly we did improve the gross margin on equipment sales driven by the rollout
of the ePort Engage devices which are priced to have higher margins relative to
the equipment sales last year.

Operating Expenses

                                                   Year ended June 30,                                      Percent Change
Category ($ in thousands)               2022              2021              2020               2022 v. 2021                2021 v. 2020
Sales and marketing                  $  8,908          $  6,935          $  6,571                       28.4  %                      5.5  %
Technology and product development     21,877            15,935            15,094                       37.3  %                      5.6  %
General and administrative expenses    30,519            35,754            40,083                      (14.6  %)                   (10.8  %)
Investigation, proxy solicitation
and restatement expenses                1,196                 -            19,810                        100  %                     (100  %)
Depreciation and amortization           4,352             4,107             4,307                        6.0  %                     (4.6  %)
Total operating expenses             $ 66,852          $ 62,731          $ 85,865                        6.6  %                    (26.9  %)


Total operating expenses.  Operating expenses increased by $4.1 million for the
year ended June 30, 2022 compared to the year ended June 30, 2021. The change is
primarily attributed to a $5.9 million increase in technology and product
development expenses, a $2.0 million increase in sales and marketing costs and a
$1.2 million increase in investigation, proxy solicitation and restatement
expenses offset by a decrease of $5.2 million in general and administrative
expenses. Outside of the non-recurring investigation, proxy solicitation and
restatement expenses; the change in total operating expenses reflects the
Company's overall objectives to reduce general and administrative expenses and
utilize savings to invest in innovative technologies and products and increase
marketing spend to penetrate new and existing customers with our products and
services. See further details within individual categories below.

Sales and marketing. Sales and marketing expenses increased approximately
$2.0 million for the year ended June 30, 2022 compared to the year ended
June 30, 2021. The change is primarily attributed to an increase of
approximately $1.4 million in advertising and trade show costs. The increase in
trade show costs was due to our participation in industry conventions throughout
FY22, along with launching our first Cantaloupe Innovation Summit in August
2022. These events were leveraged to drive increased sales and customer
retention, while showcasing the latest innovations for self-service operators.
Additional spending went into lead generation activities tied to advertising in
trade publications, search, and retargeting campaigns to drive increased small-
and medium-business (SMB) opportunities. The increase in expenses is also
attributed to a $0.4 million increase in sales and marketing employee
compensation expense which comprised of headcount increases and additional sales
commissions costs incurred in the current year. The increased compensation
expense supports our expanding business and service offerings in the United
States and internationally.

Technology and product development. Technology and product development expenses
increased approximately $5.9 million for the year ended June 30, 2022 compared
to the year ended June 30, 2021. The increase was driven primarily by the
Company's objectives of investing in innovative technologies, specifically
advancing mobile enhancements across the Seed platform (including Seed Warehouse
App, Seed Driver App) and the mobile loyalty platform for consumers. Other
innovations include continuous improvements and machine acceptance of remote
price change, integration with HIVERY Enhance for leveraging artificial
intelligence/machine learning technology and new ePort hardware devices that
were launched during the year. Additional expenses in technology were incurred
to further strengthen our network environment and platform by preparing and
transitioning to Amazon Web Services (completed in July 2022), which will
provide our customers greater stability, reliability, and overall higher
performance on processing transactions and transmitting data.

General and administrative expenses. General and administrative expenses
decreased approximately $5.2 million for the year ended June 30, 2022 compared
to the year ended June 30, 2021. The decrease in general and administrative
expenses was primarily driven by a $5.4 million decrease in professional fees
due to reduced reliance on external consultants who previously supported the
Company's accounting, financial reporting and legal functions, a $1.6 million
change relating to the network incident in the prior year, a $1.6 million lease
impairment charge in the prior year, a $1.9 million decrease in stock
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compensation, partially offset by a $0.9 million increase in salary and bonuses,
an increase in bad debt expense of approximately $2.1 million, a $0.9 million
change in sales tax reserve and an increase in travel and expense costs of $0.6
million during the current year.

Investigation, proxy solicitation and restatement expenses. In fiscal year 2019,
the Audit Committee, with the assistance of independent legal and forensic
accounting advisors, conducted an internal investigation of then-current and
prior period matters relating to certain of the Company's contractual
arrangements, including the accounting treatment, financial reporting and
internal controls related to such arrangements. Additionally, in fiscal year
2019, significant financial reporting issues were identified which were
unrelated to the internal investigation and which resulted in further
adjustments to the Company's previously issued or prior fiscal years' unissued
financial statements. As a result of the findings, the Company restated its
consolidated financial statements as of and for the fiscal year 2017 and our
unaudited consolidated financial statements for the quarterly periods ended
September 30, 2016, December 31, 2016, March 31, 2017, September 30, 2017,
December 31, 2017, and March 31, 2018.

Investigation, proxy solicitation and restatement expenses were incurred
primarily in fiscal year 2020 and 2019 in connection with the 2019 Investigation
and the restatements of previously filed financial statements, bank consents,
the remediation of deficiencies in our internal control over financial
reporting, the proxy solicitation, and professional services fees to assist with
accounting and compliance activities in fiscal year 2020 following the filing of
the 2019 Form 10-K.

The Company did not incur any material investigation, proxy solicitation and
restatement expenses for the year ended June 30, 2021. For the fiscal year ended
June 30, 2022, the Company and former officers incurred additional legal charges
primarily relating to responding to inquiries from the U.S. Department of
Justice ("DOJ") and Securities and Exchange Commission ("SEC") in regards to the
2019 Investigation. See Note 18 to the consolidated financial statements in Part
II, Item 8 of this Annual Report for further information on the above mentioned
matters.

Depreciation and amortization. Depreciation and amortization expense was
predominantly consistent for the fiscal years ended June 30, 2022 and June 30,
2021.

Other income (expense), Net

                                                  Year ended June 30,                                      Percent Change
Category ($ in thousands)              2022              2021              2020               2022 v. 2021                2021 v. 2020
Other income (expense):
Interest income                     $  1,884          $  1,159          $  1,595                       62.6  %                    (27.3  %)
Interest expense                    $   (524)         $ (4,013)         $ (2,597)                     (86.9  %)                    54.5  %
Other income (expense)                  (220)            3,224                 -                      100.0  %                           NM
Total other income (expense), net   $  1,140          $    370          $ (1,002)                     208.1  %                   (136.9  %)


____________
NM - not meaningful

Other income (expenses), Net

Total other income (expense), net for the fiscal year ended June 30, 2022 was
$1.1 million, compared to $0.4 million for the fiscal year ended June 30, 2021.
The $0.7 million increase in Other income (expense), net from the prior fiscal
year was primarily attributable to a $0.7 million increase in interest income, a
$3.5 million decrease in Interest expense offset by a $(3.4) million decrease in
Other income.

Interest income. The increase in interest income is primarily driven by a larger
finance receivables amount on our balance sheet as of June 30, 2022 compared to
June 30, 2021 and June 30, 2020.

Interest expense. The higher interest expense for the for the fiscal year ended
June 30, 2021 was primarily related to the recognition of the remaining balance
of unamortized debt issuance costs and debt discount associated with the senior
secured term loan facility with Antara Capital Master Fund LP of $2.6 million
into interest expense, when the Antara Term Facility was fully repaid and
terminated. The remaining reduction in interest expense was mainly due to a $0.8
million change in the interest component of the sales tax reserve in fiscal year
2022 compared to the fiscal year 2021. The change in the sales tax reserve was
driven by the expiration of statute of limitations and other factors considered
by management while establishing the reserve.
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Other income (expense): The higher other income for the fiscal year ended
June 30, 2021 was primarily attributed to Company receiving notification from
the Small Business Administration that the $3.1 million Paycheck Protection
Program loan and related accrued interest were forgiven in full. The Company
recorded the forgiveness as a gain on debt extinguishment in our consolidated
financial statements resulting in the increase in Other Income for the fiscal
year ended June 30, 2021.

Non-GAAP Financial Measures – Adjusted EBITDA

"Adjusted EBITDA" (as defined is a non-GAAP financial measure which is not
required by or defined under GAAP. We use this non-GAAP financial measure for
financial and operational decision-making purposes and as a means to evaluate
period-to-period comparisons. We believe that this non-GAAP financial measure
provides useful information about our operating results, enhances the overall
understanding of past financial performance and future prospects and allows for
greater transparency with respect to metrics used by our management in its
financial and operational decision making. The presentation of this financial
measure is not intended to be considered in isolation or as a substitute for the
financial measures prepared and presented in accordance with GAAP, including our
net income or net loss or net cash used in operating activities. Management
recognizes that non-GAAP financial measures have limitations in that they do not
reflect all of the items associated with our net income or net loss as
determined in accordance with GAAP, and are not a substitute for or a measure of
our profitability or net earnings. Adjusted EBITDA is presented because we
believe it is useful to investors as a measure of comparative operating
performance. Additionally, we utilize Adjusted EBITDA as a metric in our
executive officer and management incentive compensation plans.

We define Adjusted EBITDA as U.S. GAAP net loss before (i) interest income (ii)
interest expense on debt and reserves (iii) income tax expense (iv) depreciation
(v) amortization (vi) stock-based compensation expense (vii) fees and charges
that were incurred in connection with the 2019 Investigation and financial
statement restatement activities as well as proxy solicitation costs that are
not indicative of our core operations and (viii) certain other significant
infrequent or unusual losses and gains that are not indicative of our core
operations including asset impairment charges and gain on extinguishment of
debt.

Below is a comparison of WE GAAP net loss to Adjusted EBITDA for the years ended June 30, 20222021 and 2020:

                                                                      Year ended June 30,
($ in thousands)                                           2022               2021               2020

Net loss                                               $  (1,703)         $  (8,705)         $ (40,595)
Less: interest income                                     (1,884)            (1,159)            (1,595)
Plus: interest expense                                       524              4,013              2,597
Plus: income tax provision                                   186                370                  1

Plus: depreciation expense included in cost of sales for rentals

                                                     973              1,404              2,711
Plus: depreciation and amortization expense in
operating expenses                                         4,352              4,107              4,307
EBITDA                                                     2,448                 30            (32,574)
Plus: stock-based compensation (a)                         6,248              9,075              3,029
Plus: investigation, proxy solicitation and
restatement expenses (b)                                   1,196                  -             19,810
Plus: asset impairment charge (c)                              -              1,578                  -
Less: gain on extinguishment of debt (d)                       -             (3,065)                 -
Adjustments to EBITDA                                      7,444              7,588             22,839
Adjusted EBITDA                                        $   9,892          $   7,618          $  (9,735)


(a) As an adjustment to EBITDA, we have excluded stock-based compensation, as it
does not reflect our cash-based operations.
(b) As an adjustment to EBITDA, we have excluded the fees incurred in connection
with the costs and expenses related to the 2019 Investigation, financial
statement restatement activities, and proxy solicitation costs because we
believe that they represent charges that are not related to our core operations.
(c) As an adjustment to EBITDA, we have excluded the non-cash impairment charges
related to long-lived operating lease right-of-use assets because we believe
that these do not represent charges that are related to our core operations.
(d) As an adjustment to EBITDA, we have excluded the one-time gain related to
the forgiveness of our PPP loan.


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CASH AND CAPITAL RESOURCES

Sources and uses of species

Historically, we have financed our operations primarily through cash from
operating activities, debt financings, and equity issuances. The Company has the
following primary sources of capital available: (1) cash and cash equivalents on
hand of $68.1 million as of June 30, 2022; (2) the cash that may be provided by
operating activities; and (3) up to $15 million available to be drawn on the
Amended Revolving Facility (defined below) with JPMorgan Chase Bank, N.A. (4) up
to an additional $10 million available through March 2023 to be drawn on the
Amended Secured Term Facility (defined below) with JPMorgan Chase Bank, N.A.

During the year ended June 30, 2022, the Company entered into an amended and
restated credit agreement with JPMorgan Chase Bank, N.A. which provides for a
$15 million secured revolving credit facility (the "Amended Revolving Facility")
and a $25 million secured term facility (the "Amended Secured Term Facility" and
together with the Amended Revolving Facility, the "Amended JPMorgan Credit
Facility"), and fully replaces our previous 2021 JPMorgan Credit Facility. For
additional discussion on the amended credit facility see Note 11 to our
Consolidated Financial Statements.

The Company has also estimated and recorded the potential sales tax and related interest and penalty liabilities of $14.7 million overall from
June 30, 2022. The Company continues to assess these liabilities and the amount and timing of these payments.

The Company estimates that its current financial resources will be sufficient to fund its current operating budget for twelve months from the date of publication of these consolidated financial statements.

Below are graphs that reflect our cash liquidity and outstanding debt for the fiscal years ended June 30, 20222021 and 2020.

[[Image Removed: chart-978ba5943002403e86d.jpg]][[Image Removed: chart-fcbed22b81d14d1f9ba.jpg]]Cash flow

See Consolidated Statements of Cash Flows in Item 8 of this Annual Report for
details on the changes in cash and cash equivalents classified by operating,
investing and financing activities during our respective reporting periods.
                                       42
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                [[Image Removed: chart-e7a5572ae2234928a00.jpg]]

Net cash provided by (used in) operating activities

Cash used in operating activities was $8.7 million for the year ended June 30,
2022 compared to cash provided by operating activities of $8.2 million for the
year ended June 30, 2021. The $8.7 million cash used in operating activities
reflects our net loss of $1.7 million, $22.5 million utilized by changes in
working capital accounts offset by $15.5 million in non-cash operating charges.

Cash utilized by working capital accounts of approximately $22 million was
principally a function of a $14.1 million increase in inventory, $13.6 million
increase in accounts receivable, $4.3 million increase in prepaids and other
assets, offset by an increase of $12.2 million to accounts payable and accrued
expenses. Increase in inventory is driven by increased equipment sales as well
as strategic planning to mitigate potential supply chain disruptions. The
Company has increased inventory on hand in order to efficiently fulfill orders
as they are placed and as we anticipate orders for customers who are continuing
to upgrade 3G devices to 4G as the 3G network sunset date approaches near the
end of calendar year 2022. Increase in cash utilized by accounts receivable of
was as a result of increased sales and processing volumes during fiscal year
2022; offset by an increase in accounts payable and accrued expenses which was
comprised of funds owed to customers as a result of larger processing volumes in
fiscal year 2022.

Non-cash operating expenses consisted primarily of stock-based compensation, amortization of property, plant and equipment and amortization of our intangible assets.

Net cash used in investing activities

Cash used in investing activities was $12.2 million for the year ended June 30,
2022 compared to cash used of $1.8 million in the same period in the prior year.
Increase in cash used is due to the cash paid for the Yoke acquisition of $3
million and $9.3 million for increased property and equipment balances driven
primarily by the Company's continued focus on investing in innovative
technologies and products.

Cash allocated to investing activities was $1.8 million for the year ended June 30, 2021 which was mainly used to increase property, plant and equipment.

Net cash provided by financing activities

Cash provided by financing activities was $0.9 million for the year ended
June 30, 2022 compared to cash provided of $50.1 million in the prior year.
During the prior fiscal year, the Company raised $52.4 million of proceeds (net
of issuance costs) through a private placement transaction with respect to the
sale of an aggregate of 5,730,000 shares of the Company's common stock to
accredited investors (described below). The Company paid $1.2 million as a
prepayment penalty and commitment termination fee to Antara as part of the
repayment of the 2020 Antara Term Facility and paid $0.5 million of debt
issuance costs as a result of entering into the 2021 JPMorgan Credit Facility.
                                       43
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CONTRACTUAL OBLIGATIONS

From June 30, 2022the Company had certain contractual obligations due over a period of time, as summarized in the following table:

Payments Due by Fiscal Year

                                                        Less than 1
($ in thousands)                         Total              year            1-3 years          3-5 years           More than 5 years
Debt and financing obligations
(a)                                   $ 17,789          $     809          $   2,436          $  14,544          $                -
Operating lease obligations (b)          4,387              1,758              1,736                893                           -
Purchase obligations (c)                21,450             12,200              9,250                  -                           -
Total contractual obligations         $ 43,626          $  14,767          $  13,422          $  15,437          $                -


(a)  Our debt and financing obligations include both principal and interest
obligations. As of June 30, 2022, an interest rate of 5% was used to compute the
amount of the contractual obligations for interest on the Amended JPMorgan
Credit Agreement. See Note 11 to the consolidated financial statements for
further information.
(b)  Operating lease obligations represent our undiscounted operating lease
liabilities as of June 30, 2022. See Note 3 to the consolidated financial
statements for further information.
(c)  Purchase obligations primarily represent firm commitments to purchase
inventory. See Note 18 to the consolidated financial statements for further
information.

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