Company: CDLX
Filing Date: 2025-04-03
Form Type: ARS
Source: 0001666071-25-000048
Chunk: 125

Company: Cardlytics, Inc.
Filing Date: 2025-04-03
Form: ARS
Chunk 125
---
 and Derivatives and Hedging—Contracts in Entity’s Own Equity ("Subtopic 815-40"), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP, as it removes the requirement to bifurcate our 2020 Convertible Senior Notes into a separate liability and equity component. As a result, it more closely aligns the effective interest rate with the coupon rate of the 2020 Convertible Senior Notes. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021. On January 1, 2022, we adopted this standard using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the 2020 Convertible Senior Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to long-term debt of $40.2 million and a decrease to additional paid in capital of $51.5 million. Refer to Note 9, "Debt and Financing Arrangements" for further information about the 2020 Convertible Senior Notes. 4. BUSINESS COMBINATIONS AND DIVESTITURES Our acquisitions were accounted for as business combinations and the total purchase consideration of each was allocated to the net tangible and intangible assets and liabilities acquired based on their fair values on the acquisition dates with the remaining amounts recorded as goodwill. During the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we incurred $0.2 million of cost, $6.3 million of benefit and $2.9 million of benefit in connection with our acquisitions and divestitures, respectively. During the year ended December 31, 2023 and December 31, 2022, the benefit is primarily due to a reduction of the estimated brokerage fee related to our reduced estimate of contingent consideration related to our Bridg acquisition, offset by the expense related to the divestiture of Entertainment. These expenses and gains