UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number
(Exact name of Registrant as specified in its Charter)
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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The |
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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-2 of the Exchange Act:
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 5, 2021, there are
REPAY HOLDINGS CORPORATION
Quarterly Report on Form 10‑Q
For the quarter ended June 30, 2021
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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48 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, anticipated benefits from the BillingTree and Kontrol acquisitions, the effects of the COVID-19 pandemic, expected demand on our product offering, including further implementation of electronic payment options and statements regarding our market and growth opportunities, and our business strategy and the plans and objectives of management for future operations. You generally can identify these statements by the use of words such as “outlook,” “potential,” “continue,” “may,” “seek,” “approximately,” “predict,” “believe,” “expect,” “plan,” “intend,” “estimate” or “anticipate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These statements may be found under Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include, but are not limited to: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending; the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of the BillingTree acquisition and our other recent acquisitions; changes in the payment processing market in which we compete, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that we target, including the regulatory environment applicable to our customers; risks relating to our relationships within the payment ecosystem; risk that we may not be able to execute our growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to us; the risk that we may not be able to maintain effective internal controls; and those risks described under Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, as amended. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we disclaim any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
PART I
FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
REPAY HOLDINGS CORPORATION
Consolidated Balance Sheets
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June 30, 2021 (Unaudited) |
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December 31, 2020 |
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Assets |
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Cash and cash equivalents |
$ |
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$ |
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Accounts receivable |
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Prepaid expenses and other |
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Total current assets |
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Property, plant and equipment, net |
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Restricted cash |
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Customer relationships, net of amortization |
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Software, net of amortization |
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Other intangible assets, net of amortization |
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Goodwill |
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Operating lease right-of-use assets, net of amortization |
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Deferred tax assets |
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Total noncurrent assets |
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Total assets |
$ |
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$ |
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Liabilities |
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Accounts payable |
$ |
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$ |
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Related party payable |
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Accrued expenses |
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Current maturities of long-term debt |
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— |
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Current operating lease liabilities |
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Current tax receivable agreement |
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Total current liabilities |
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Long-term debt, net of current maturities |
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Noncurrent operating lease liabilities |
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Tax receivable agreement, net of current portion |
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Other liabilities |
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Total noncurrent liabilities |
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Total liabilities |
$ |
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$ |
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Commitment and contingencies (Note 12) |
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Stockholders' equity |
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Class A common stock, $ |
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Class V common stock, $ |
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— |
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— |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
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— |
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Accumulated deficit |
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( |
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Total stockholders' equity |
$ |
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$ |
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Equity attributable to non-controlling interests |
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Total liabilities and stockholders' equity and members' equity |
$ |
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$ |
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See accompanying notes to consolidated financial statements.
1
REPAY HOLDINGS CORPORATION
Consolidated Statements of Operations
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
$ |
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$ |
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$ |
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$ |
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Operating Expenses |
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Other costs of services |
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Selling, general and administrative |
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Depreciation and amortization |
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Change in fair value of contingent consideration |
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( |
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Total operating expenses |
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(Loss) Income from operations |
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( |
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( |
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( |
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( |
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Other (expense) income |
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Interest expense |
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( |
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( |
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( |
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( |
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Loss on extinguishment of debt |
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— |
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— |
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( |
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— |
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Change in fair value of warrant liabilities |
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— |
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( |
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— |
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( |
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Change in fair value of tax receivable liability |
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( |
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( |
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( |
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( |
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Other income |
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Other loss |
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— |
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— |
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( |
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— |
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Total other (expense) income |
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( |
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( |
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( |
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( |
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(Loss) income before income tax expense |
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( |
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( |
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( |
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( |
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Income tax benefit |
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Net (loss) income |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Less: Net (loss) income attributable to non-controlling interests |
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( |
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( |
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( |
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( |
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Net (loss) income attributable to the Company |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Loss per Class A share: |
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Basic and diluted |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted-average shares outstanding: |
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Basic and diluted |
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See accompanying notes to consolidated financial statements.
2
REPAY HOLDINGS CORPORATION
Consolidated Statements of Comprehensive Income
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Other comprehensive loss, before tax |
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Change in fair value of designated cash flow hedges |
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— |
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( |
) |
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— |
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( |
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Total other comprehensive loss, before tax |
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— |
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( |
) |
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— |
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( |
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Income tax related to items of other comprehensive income: |
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Tax benefit on change in fair value of designated cash flow hedges |
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— |
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— |
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Total income tax benefit on related to items of other comprehensive income |
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— |
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— |
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Total other comprehensive loss, net of tax |
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— |
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( |
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— |
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( |
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Total comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Less: Comprehensive loss attributable to non-controlling interests |
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( |
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( |
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( |
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( |
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Comprehensive loss attributable to the Company |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
) |
See accompanying notes to consolidated financial statements.
3
REPAY HOLDINGS CORPORATION
Consolidated Statements of Changes in Equity
(Unaudited)
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Class A Common Stock |
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Class V Common Stock |
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Additional Paid-In |
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Accumulated |
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Accumulated Other Comprehensive |
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Total Stockholders' |
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Non-controlling |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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(Loss) Income |
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Equity |
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Interests |
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Balance at December 31, 2019 |
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$ |
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$ |
- |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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- |
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Warrant exercise |
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- |
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- |
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- |
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- |
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Reclassification to warrant liabilities |
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- |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
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( |
) |
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Accumulated other comprehensive (loss) income |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
) |
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Balance at March 31, 2020 |
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$ |
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$ |
- |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
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Issuance of new shares |
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- |
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- |
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- |
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- |
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Redemption of Post-Merger Repay Units |
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- |
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- |
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- |
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( |
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- |
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( |
) |
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( |
) |
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( |
) |
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Stock-based compensation |
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- |
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- |
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- |
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- |
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- |
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- |
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Warrant exercise |
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- |
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- |
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- |
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- |
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Valuation allowance on Ceiling Rule DTA |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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( |
) |
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- |
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Reclassification to warrant liabilities |
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- |
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- |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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( |
) |
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( |
) |
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Accumulated other comprehensive (loss) income |
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- |
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- |
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- |
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|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance at June 30, 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to consolidated financial statements.
4
REPAY HOLDINGS CORPORATION
Consolidated Statements of Changes in Equity
(Unaudited) (Continued)
|
|
|
Class A Common Stock |
|
|
Class V Common Stock |
|
|
Additional Paid-In |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total Stockholders' |
|
|
Non-controlling |
|
|||||||||||||||
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(Loss) Income |
|
|
Equity |
|
|
Interests |
|
|||||||||
|
Balance at December 31, 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
- |
|
||||||||||||||||||||