10-Q 1 rpay-20240930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

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 001-38531

 

 

img48404509_0.jpg

 

Repay Holdings Corporation

(Exact name of Registrant as specified in its Charter)

 

Delaware

98-1496050

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3060 Peachtree Road NW,

Suite 1100

Atlanta, GA

30305

(Address of principal executive offices)

(Zip Code)

3 West Paces Ferry Road,

 

Suite 200

 

Atlanta, GA

30305

(Former address of principal executive offices)

(Former Zip Code)

Registrant’s telephone number, including area code: (404) 504-7472

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

 

RPAY

 

The NASDAQ Stock Market LLC

 

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. Yes No

 

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). Yes No

 

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:

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

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 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 No

As of November 6, 2024, there are 91,904,449 shares of the registrant’s Class A Common Stock, par value $0.0001 per share, outstanding (which number includes 4,143,452 shares of unvested restricted stock that have voting rights) and 100 shares of the registrant’s Class V Common Stock, par value of $0.0001 per share, outstanding. As of November 6, 2024, the holders of such outstanding shares of Class V common stock also hold 5,728,480 units in a subsidiary of the registrant and such units are exchangeable into shares of the registrant’s Class A common stock on a one-for-one basis.

 

 


 

 

REPAY HOLDINGS CORPORATION

Quarterly Report on Form 10‑Q

For the quarter ended September 30, 2024

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements

1

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

 

 

 

Item 4.

Controls and Procedures

38

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

39

 

 

 

Item 1A.

Risk Factors

39

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

 

 

 

Item 3.

Defaults Upon Senior Securities

41

 

 

 

Item 4.

Mine Safety Disclosures

41

 

 

 

Item 5.

Other Information

41

 

 

 

Item 6.

Exhibits

43

 

 

 

 

Signatures

44

 

 

 


 

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 our recent acquisitions, expected demand on our product offerings, 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, including bank failures or other adverse events affecting financial institutions, inflationary pressures, general economic slowdown or recession; 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 clients; the ability to retain, develop and hire key personnel; 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, 2023. 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. Condensed Consolidated Financial Statements

 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Balance Sheets

 

($ in thousands)

September 30, 2024 (Unaudited)

 

 

December 31, 2023

 

Assets

 

 

 

 

 

Cash and cash equivalents

$

168,715

 

 

$

118,096

 

Accounts receivable

 

41,124

 

 

 

36,017

 

Prepaid expenses and other

 

14,930

 

 

 

15,209

 

Total current assets

 

224,769

 

 

 

169,322

 

 

 

 

 

 

 

Property, plant and equipment, net

 

2,713

 

 

 

3,133

 

Restricted cash

 

46,540

 

 

 

26,049

 

Intangible assets, net

 

402,292

 

 

 

447,141

 

Goodwill

 

716,793

 

 

 

716,793

 

Operating lease right-of-use assets, net

 

11,564

 

 

 

8,023

 

Deferred tax assets

 

157,097

 

 

 

146,872

 

Other assets

 

2,500

 

 

 

2,500

 

Total noncurrent assets

 

1,339,499

 

 

 

1,350,511

 

Total assets

$

1,564,268

 

 

$

1,519,833

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accounts payable

$

28,792

 

 

$

22,030

 

Accrued expenses

 

52,246

 

 

 

32,906

 

Current operating lease liabilities

 

1,199

 

 

 

1,629

 

Current tax receivable agreement

 

 

 

 

580

 

Other current liabilities

 

1,026

 

 

 

318

 

Total current liabilities

 

83,263

 

 

 

57,463

 

 

 

 

 

 

 

Long-term debt

 

496,214

 

 

 

434,166

 

Noncurrent operating lease liabilities

 

10,958

 

 

 

7,247

 

Tax receivable agreement, net of current portion

 

201,273

 

 

 

188,331

 

Other liabilities

 

2,861

 

 

 

1,838

 

Total noncurrent liabilities

 

711,306

 

 

 

631,582

 

Total liabilities

$

794,569

 

 

$

689,045

 

 

 

 

 

 

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized; 93,213,403 issued and 87,720,670 outstanding as of September 30, 2024; 92,220,494 issued and 90,803,984 outstanding as of December 31, 2023

 

9

 

 

 

9

 

Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of September 30, 2024 and December 31, 2023

 

 

 

 

 

Treasury stock, 5,492,733 and 1,416,510 shares as of September, 2024 and December 31, 2023, respectively

 

(53,782

)

 

 

(12,528

)

Additional paid-in capital

 

1,138,160

 

 

 

1,151,324

 

Accumulated deficit

 

(329,710

)

 

 

(323,670

)

Total Repay stockholders' equity

$

754,677

 

 

$

815,135

 

Non-controlling interests

 

15,022

 

 

 

15,653

 

Total equity

$

769,699

 

 

$

830,788

 

Total liabilities and equity

$

1,564,268

 

 

$

1,519,833

 

 

See accompanying notes to condensed consolidated financial statements.

1


 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

($ in thousands, except per share data)

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

$

79,145

 

 

$

74,320

 

 

$

234,771

 

 

$

220,640

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Costs of services (exclusive of depreciation and amortization shown separately below)

 

17,584

 

 

 

17,637

 

 

 

53,080

 

 

 

52,442

 

Selling, general and administrative

 

36,707

 

 

 

35,279

 

 

 

108,963

 

 

 

111,974

 

Depreciation and amortization

 

25,529

 

 

 

26,523

 

 

 

79,328

 

 

 

79,146

 

Loss on business disposition

 

 

 

 

 

 

 

 

 

 

10,027

 

Total operating expenses

 

79,820

 

 

 

79,439

 

 

 

241,371

 

 

 

253,589

 

Loss from operations

 

(675

)

 

 

(5,119

)

 

 

(6,600

)

 

 

(32,949

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest (expense) income, net

 

(1,310

)

 

 

(103

)

 

 

(376

)

 

 

(1,413

)

Gain on extinguishment of debt

 

13,136

 

 

 

 

 

 

13,136

 

 

 

 

Change in fair value of tax receivable liability

 

(6,479

)

 

 

(3,234

)

 

 

(12,758

)

 

 

(3,716

)

Other income (loss), net

 

67

 

 

 

(26

)

 

 

62

 

 

 

(360

)

Total other income (expense)

 

5,414

 

 

 

(3,363

)

 

 

64

 

 

 

(5,489

)

Income (loss) before income tax (expense) benefit

 

4,739

 

 

 

(8,482

)

 

 

(6,536

)

 

 

(38,438

)

Income tax benefit (expense)

 

(1,524

)

 

 

1,998

 

 

 

149

 

 

 

(1,308

)

Net income (loss)

$

3,215

 

 

$

(6,484

)

 

$

(6,387

)

 

$

(39,746

)

Less: Net loss attributable to non-controlling interests

 

(28

)

 

 

(316

)

 

 

(347

)

 

 

(2,543

)

Net income (loss) attributable to the Company

$

3,243

 

 

$

(6,168

)

 

$

(6,040

)

 

$

(37,203

)

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per Class A share attributable to the Company:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.04

 

 

$

(0.07

)

 

$

(0.07

)

 

$

(0.41

)

Diluted

$

0.03

 

 

$

(0.07

)

 

$

(0.07

)

 

$

(0.41

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

88,263,285

 

 

 

91,160,415

 

 

 

90,426,364

 

 

 

89,658,318

 

Diluted

 

103,129,907

 

 

 

91,160,415

 

 

 

90,426,364

 

 

 

89,658,318

 

 

See accompanying notes to condensed consolidated financial statements.

 

2


 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

 

 

 

Repay Stockholders

 

 

 

 

 

 

 

 

 

Class A Common
Stock

 

 

Class V Common
Stock

 

 

Additional
Paid-In

 

 

Treasury

 

 

Accumulated

 

 

Non-controlling

 

 

Total

 

($ in thousands)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

Interests

 

 

Equity

 

Balance at June 30, 2023

 

 

90,294,728

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,132,717

 

 

$

(10,000

)

 

$

(244,215

)

 

$

25,105

 

 

$

903,616

 

Exchange of Post-Merger Repay Units

 

 

597,882

 

 

 

-

 

 

 

 

 

 

-

 

 

 

2,322

 

 

 

-

 

 

 

-

 

 

 

(2,322

)

 

 

-

 

Release of share awards vested under Incentive Plan

 

 

61,489

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Tax withholding related to shares vesting under Incentive Plan

 

 

(17,592

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(138

)

 

 

-

 

 

 

-

 

 

 

4

 

 

 

(134

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

5,684

 

 

 

-

 

 

 

-

 

 

 

2

 

 

 

5,686

 

Tax distribution from Hawk Parent

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(338

)

 

 

(338

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,168

)

 

 

(316

)

 

 

(6,484

)

Balance at September 30, 2023

 

 

90,936,507

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,140,585

 

 

$

(10,000

)

 

$

(250,383

)

 

$

22,135

 

 

$

902,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2024

 

 

91,571,033

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,160,879

 

 

$

(12,528

)

 

$

(332,953

)

 

$

15,318

 

 

$

830,725

 

Exchange of Post-Merger Repay Units

 

 

115,615

 

 

 

-

 

 

 

 

 

 

-

 

 

 

304

 

 

 

-

 

 

 

-

 

 

 

(304

)

 

 

-

 

Release of share awards vested under Incentive Plan

 

 

72,570

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Tax withholding related to shares vesting under Incentive Plan

 

 

(21,217

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(231

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(231

)

Treasury shares repurchased

 

 

(4,076,223

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(360

)

 

 

(41,254

)

 

 

-

 

 

 

37

 

 

 

(41,577

)

Stock options exercised

 

 

58,892

 

 

 

-

 

 

 

 

 

 

-

 

 

 

396

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

395

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

6,467

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,467

 

Purchase of capped calls related to issuance of the 2029 Notes

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

(29,295

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(29,295

)

Net income (loss)

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,243

 

 

 

(28

)

 

 

3,215

 

Balance at September 30, 2024

 

 

87,720,670

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,138,160

 

 

$

(53,782

)

 

$

(329,710

)

 

$

15,022

 

 

$

769,699

 

 

See accompanying notes to condensed consolidated financial statements.

3


 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited) (Continued)

 

 

 

Repay Stockholders

 

 

 

 

 

 

 

 

 

Class A Common
Stock

 

 

Class V Common
Stock

 

 

Additional
Paid-In

 

 

Treasury

 

 

Accumulated

 

 

Non-controlling

 

 

Total

 

($ in thousands)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

Interests

 

 

Equity

 

Balance at December 31, 2022

 

 

88,276,613

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,117,733

 

 

$

(10,000

)

 

$

(213,180

)

 

$

33,731

 

 

$

928,293

 

Exchange of Post-Merger Repay Units

 

 

2,014,460

 

 

 

-

 

 

 

 

 

 

-

 

 

 

8,038

 

 

 

-

 

 

 

-

 

 

 

(8,038

)

 

 

-

 

Release of share awards vested under Incentive Plan and ESPP

 

 

839,699

 

 

 

-

 

 

 

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

-

 

 

 

(2

)

 

 

-

 

Tax withholding related to shares vesting under Incentive Plan and ESPP

 

 

(194,265

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(1,522

)

 

 

-

 

 

 

-

 

 

 

12

 

 

 

(1,510

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

16,334

 

 

 

-

 

 

 

-

 

 

 

(78

)

 

 

16,256

 

Tax distribution from Hawk Parent

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(947

)

 

 

(947

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37,203

)

 

 

(2,543

)

 

 

(39,746

)

Balance at September 30, 2023

 

 

90,936,507

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,140,585

 

 

$

(10,000

)

 

$

(250,383

)

 

$

22,135

 

 

$

902,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023

 

 

90,803,984

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,151,324

 

 

$

(12,528

)

 

$

(323,670

)

 

$

15,653

 

 

$

830,788

 

Exchange of Post-Merger Repay Units

 

 

115,615

 

 

 

-

 

 

 

 

 

 

-

 

 

 

304

 

 

 

-

 

 

 

-

 

 

 

(304

)

 

 

-

 

Release of share awards vested under Incentive Plan and ESPP

 

 

1,098,165

 

 

 

-

 

 

 

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

Tax withholding related to shares vesting under Incentive Plan and ESPP

 

 

(279,763

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(2,726

)

 

 

-

 

 

 

-

 

 

 

6

 

 

 

(2,720

)

Treasury shares repurchased

 

 

(4,076,223

)

 

 

-

 

 

 

 

 

 

-

 

 

 

(360

)

 

 

(41,254

)

 

 

-

 

 

 

37

 

 

 

(41,577

)

Stock options exercised

 

 

58,892

 

 

 

-

 

 

 

 

 

 

-

 

 

 

396

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

395

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

18,516

 

 

 

-

 

 

 

-

 

 

 

(21

)

 

 

18,495

 

Purchase of capped calls related to issuance of the 2029 Notes

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

(29,295

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(29,295

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,040

)

 

 

(347

)

 

 

(6,387

)

Balance at September 30, 2024

 

 

87,720,670

 

 

$

9

 

 

 

100

 

 

$

-

 

 

$

1,138,160

 

 

$

(53,782

)

 

$

(329,710

)

 

$

15,022

 

 

$

769,699

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

($ in thousands)

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(6,387

)

 

$

(39,746

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

79,328

 

 

 

79,146

 

Stock based compensation

 

 

18,495

 

 

 

16,256

 

Amortization of debt issuance costs

 

 

2,185

 

 

 

2,136

 

Loss on business disposition

 

 

 

 

 

10,027

 

Gain on extinguishment of debt

 

 

(13,136

)

 

 

 

Other loss

 

 

 

 

 

273

 

Fair value change in tax receivable agreement liability

 

 

12,758

 

 

 

3,716

 

Deferred tax expense

 

 

(149

)

 

 

1,308

 

Change in accounts receivable

 

 

(5,107

)

 

 

(4,857

)

Change in prepaid expenses and other

 

 

279

 

 

 

4,161

 

Change in operating lease ROU assets

 

 

(3,541

)

 

 

389

 

Change in accounts payable

 

 

6,762

 

 

 

(1,948

)

Change in accrued expenses and other

 

 

19,339

 

 

 

(1,544

)

Change in operating lease liabilities

 

 

3,281

 

 

 

(424

)

Change in other liabilities

 

 

1,731

 

 

 

(142

)

Net cash provided by operating activities

 

 

115,838

 

 

 

68,751

 

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(782

)

 

 

(1,062

)

Capitalized software development costs

 

 

(33,278

)

 

 

(36,678

)

Proceeds from sale of business, net of cash retained

 

 

 

 

 

40,273

 

Net cash (used in) provided by investing activities

 

 

(34,060

)

 

 

2,533

 

Cash flows from financing activities

 

 

 

 

 

 

Issuance of long-term debt

 

 

287,500

 

 

 

 

Payments on long-term debt

 

 

(205,150

)

 

 

(20,000

)

Payments of debt issuance costs

 

 

(9,350

)

 

 

 

Payments for tax withholding related to shares vesting under Incentive Plan and ESPP

 

 

(2,720

)

 

 

(1,510

)

Treasury shares repurchased

 

 

(41,577

)

 

 

 

Stock options exercised

 

 

395

 

 

 

 

Distributions to Members

 

 

 

 

 

(947

)

Purchase of capped calls related to issuance of the 2029 Notes

 

 

(39,186

)

 

 

 

Payment of Tax Receivable Agreement (“TRA”)

 

 

(580

)

 

 

 

Payment of contingent consideration liability up to acquisition-date fair value

 

 

 

 

 

(1,000

)

Net cash used in financing activities

 

 

(10,668

)

 

 

(23,457

)

Increase in cash, cash equivalents and restricted cash

 

 

71,110

 

 

 

47,827

 

Cash, cash equivalents and restricted cash at beginning of period

 

$

144,145

 

 

$

93,563

 

Cash, cash equivalents and restricted cash at end of period

 

$

215,255

 

 

$

141,390

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

Interest

 

$

643

 

 

$

840

 

Income taxes

 

$

2,045

 

 

$

1,201

 

 

See accompanying notes to condensed consolidated financial statements.

5


REPAY HOLDINGS CORPORATION

Notes to the Unaudited Condensed Consolidated Financial Statements

 

1. Organizational Structure and Corporate Information

Repay Holdings Corporation was incorporated as a Delaware corporation on July 11, 2019 in connection with the closing of a transaction (the “Business Combination”) pursuant to which Thunder Bridge Acquisition Ltd., a special purpose acquisition company organized under the laws of the Cayman Islands (“Thunder Bridge”), (a) domesticated into a Delaware corporation and changed its name to “Repay Holdings Corporation” and (b) consummated the merger of a wholly owned subsidiary of Thunder Bridge with and into Hawk Parent Holdings, LLC, a Delaware limited liability company (“Hawk Parent”).

Throughout this section, unless otherwise noted or unless the context otherwise requires, the terms “we”, “us”, “Repay” and the “Company” and similar references refer to Repay Holdings Corporation and its consolidated subsidiaries.

The Company is headquartered in Atlanta, Georgia.

2. Basis of Presentation and Summary of Significant Accounting Policies

Unaudited Interim Condensed Consolidated Financial Statements

These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited condensed consolidated financial statements and accompanying notes, which are included in the Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with instructions to Form 10-Q and Rule 10-01 of SEC Regulation S-X as they apply to interim financial information. Accordingly, the interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, although the Company believes that the disclosures made are adequate to make the information not misleading. The Company uses the accrual basis of accounting whereby revenues are recognized when earned, usually upon the date services are rendered, and expenses are recognized at the date services are rendered or goods are received.

The interim condensed consolidated financial statements are unaudited, but in the Company’s opinion include all adjustments of a normal recurring nature or a description of the nature and amount of any adjustments other than normal recurring adjustments, operations and cash flows as of and for the periods presented. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Repay Holdings Corporation and its majority-owned subsidiary, Hawk Parent Holdings LLC, along with Hawk Parent Holdings LLC’s wholly owned subsidiaries: Hawk Intermediate Holdings, LLC, Hawk Buyer Holdings, LLC, Repay Holdings, LLC, M&A Ventures, LLC, Repay Management Holdco Inc., Repay Management Services LLC, Sigma Acquisition, LLC, Wildcat Acquisition, LLC, Marlin Acquirer, LLC, REPAY International LLC, REPAY Canada Solutions ULC, TriSource Solutions, LLC (“TriSource”), Mesa Acquirer, LLC, CDT Technologies LTD (“Ventanex”), Viking GP Holdings, LLC, cPayPlus, LLC (“cPayPlus”), CPS Payment Services, LLC, Media Payments, LLC, Custom Payment Systems, LLC, Electronic Payment Providers, LLC, Internet Payment Exchange, LLC, Stratus Payment Solutions, LLC, Clear Payment Solutions, LLC, Harbor Acquisition LLC, Payix Holdings Incorporated and Payix Incorporated. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported Condensed Consolidated Statements of Operations during the reporting period. Actual results could differ materially from those estimates.

6


REPAY HOLDINGS CORPORATION

Notes to the Unaudited Condensed Consolidated Financial Statements