GAAP net loss for the third quarter of 2013 was $12.2 million, or $0.52 per basic and diluted share, compared to a net loss of $21.7 million, or $1.04 per basic and diluted share, in the second quarter of 2013. The net loss for the third quarter was due primarily to compensation expense of $6.1 million, depreciation and amortization of $1.8 million, professional fees of $1.3 million and income tax expense of $1.3 million. Compensation expense included $1.9 million of share-based compensation. Depreciation and amortization was predominantly for amortization of acquisition-related intangible assets. Professional fees included an increase in costs associated with Liquid now being a publicly traded company. During the third quarter, Liquid converted to a corporation from a limited liability company. As such, a tax adjustment was made to revalue deferred tax liabilities at current corporate income tax rates, the result of which was a charge to income tax expense of $1.3 million. Also contributing to the third quarter loss was an expense of $650,000 incurred in connection with the completion of last year's Fundsolve acquisition via the settlement of a contingent consideration payable that was paid in shares of Liquid common stock (the "Fundsolve Issuance").
Excluding share-based compensation, amortization of acquisition-related intangible assets, and the Fundsolve Issuance, all of which are non-cash expenses, as well as the related income tax effect of each, on a non-GAAP basis, adjusted net loss for the third quarter of 2013 was $4.3 million, or $0.18 per basic and diluted share, compared to an adjusted net loss of $3.8 million, or $0.18 per basic and diluted share, in the second quarter of 2013.
Cash used in operating activities totaled $2.7 million in the third quarter of 2013, compared to $4.0 million in the second quarter of 2013. Cash and cash equivalents totaled $13.5 million as of September 30, 2013.
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