10-Q 1 rpay-20220930.htm 10-Q 10-Q
http://fasb.org/us-gaap/2022#ValuationTechniqueDiscountedCashFlowMemberhttp://fasb.org/us-gaap/2022#MeasurementInputDiscountRateMemberhttp://fasb.org/us-gaap/2022#MeasurementInputDiscountRateMemberhttp://fasb.org/us-gaap/2022#MeasurementInputDiscountRateMemberhttp://fasb.org/us-gaap/2022#MeasurementInputDiscountRateMember--12-312022http://fasb.org/us-gaap/2022#ValuationTechniqueDiscountedCashFlowMemberfalsehttp://fasb.org/us-gaap/2022#ValuationTechniqueDiscountedCashFlowMember0001720592http://fasb.org/us-gaap/2022#OtherNonoperatingExpenseQ3http://fasb.org/us-gaap/2022#ValuationTechniqueDiscountedCashFlowMember0001720592rpay:VentanexMember2022-04-012022-04-300001720592us-gaap:CommonClassAMember2021-01-012021-09-300001720592rpay:TaxReceivableAgreementMember2021-01-012021-12-3100017205922021-07-012021-09-300001720592us-gaap:SalesChannelDirectlyToConsumerMember2022-01-012022-09-300001720592us-gaap:AdditionalPaidInCapitalMember2021-06-300001720592rpay:RegionsBankMemberus-gaap:InterestRateSwapMember2019-10-310001720592rpay:TwoThousandTwentyOneEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2021-08-180001720592us-gaap:TradeNamesMemberrpay:BillingTreeMember2021-06-150001720592us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2021-12-310001720592us-gaap:PerformanceSharesMemberus-gaap:CommonClassAMember2021-12-310001720592us-gaap:SalesChannelThroughIntermediaryMember2021-01-012021-09-300001720592us-gaap:LeaseholdImprovementsMember2022-09-300001720592us-gaap:InterestExpenseMember2021-01-012021-12-3100017205922021-06-300001720592us-gaap:RevolvingCreditFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-300001720592us-gaap:RevolvingCreditFacilityMember2022-09-300001720592us-gaap:RetainedEarningsMember2022-07-012022-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMemberus-gaap:CommonClassAMember2022-07-012022-09-300001720592rpay:NetOfTaxesMemberrpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2021-01-012021-12-310001720592rpay:TaxReceivableAgreementMember2022-09-300001720592rpay:NewCreditAgreementMember2021-07-012021-09-300001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2020-12-310001720592us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001720592rpay:ContingentConsiderationMember2022-01-012022-09-300001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2021-09-300001720592us-gaap:RetainedEarningsMember2022-01-012022-09-300001720592us-gaap:SalesChannelDirectlyToConsumerMember2022-07-012022-09-300001720592us-gaap:RetainedEarningsMember2020-12-310001720592us-gaap:NoncompeteAgreementsMember2021-01-012021-12-310001720592rpay:TaxReceivableAgreementMember2021-01-012021-09-300001720592us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2022-01-012022-09-300001720592rpay:ClassVCommonStockMember2021-12-310001720592rpay:NewCreditAgreementMember2022-09-300001720592us-gaap:LondonInterbankOfferedRateLIBORMemberrpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2020-09-300001720592us-gaap:ComputerEquipmentMember2022-09-300001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2021-12-310001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2022-09-300001720592us-gaap:AdditionalPaidInCapitalMember2022-06-300001720592us-gaap:InterestExpenseMember2022-01-012022-09-300001720592us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001720592rpay:VentanexMember2021-12-310001720592rpay:ClassVCommonStockMember2022-11-040001720592us-gaap:NoncontrollingInterestMember2022-09-300001720592us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-06-300001720592us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2022-06-300001720592rpay:MerchantRelationshipsMemberrpay:PayixMember2021-12-290001720592us-gaap:CommonClassAMember2021-12-310001720592us-gaap:CommonClassAMember2021-07-012021-09-300001720592us-gaap:CarryingReportedAmountFairValueDisclosureMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2021-12-310001720592us-gaap:PerformanceSharesMember2021-12-310001720592us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001720592us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001720592rpay:SuccessorCreditAgreementMember2020-02-100001720592rpay:VentanexMember2021-01-012021-09-300001720592us-gaap:RevolvingCreditFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001720592us-gaap:TradeNamesMemberrpay:PayixMember2022-01-012022-09-300001720592us-gaap:RevolvingCreditFacilityMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001720592rpay:ChannelRelationshipsMember2022-09-300001720592us-gaap:CommonClassAMember2022-11-040001720592us-gaap:LeaseholdImprovementsMember2021-12-310001720592rpay:TaxReceivableAgreementMember2021-12-310001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-01-012021-09-300001720592rpay:ClientRelationshipsMember2022-01-012022-09-300001720592us-gaap:PrivatePlacementMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2021-01-192021-01-190001720592us-gaap:CommonClassAMember2022-01-012022-09-300001720592us-gaap:SalesChannelThroughIntermediaryMember2021-07-012021-09-300001720592rpay:ChannelRelationshipsMember2021-01-012021-12-310001720592rpay:BillingTreeMember2021-06-132021-06-1500017205922020-02-210001720592rpay:ClientRelationshipsMember2022-09-300001720592rpay:KontrolMembersrt:MaximumMember2021-06-220001720592us-gaap:AdditionalPaidInCapitalMember2020-12-310001720592rpay:FurnitureFixturesAndOfficeEquipmentMember2021-12-310001720592us-gaap:CommonClassAMemberrpay:BillingTreeMember2021-06-132021-06-1500017205922021-09-300001720592us-gaap:TreasuryStockMember2022-06-300001720592rpay:KontrolMemberus-gaap:TradeNamesMember2022-01-012022-09-300001720592rpay:TwoThousandNineteenEquityIncentivePlanMemberus-gaap:CommonClassAMember2022-09-300001720592us-gaap:AdditionalPaidInCapitalMember2021-12-310001720592rpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2021-12-310001720592us-gaap:ComputerSoftwareIntangibleAssetMember2021-12-310001720592us-gaap:TradeNamesMemberrpay:PayixMember2021-12-290001720592us-gaap:CommonClassAMemberus-gaap:RestrictedStockMember2021-07-012021-09-300001720592us-gaap:RetainedEarningsMember2021-01-012021-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMember2022-01-012022-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMemberus-gaap:CommonClassAMember2021-07-012021-09-300001720592us-gaap:PerformanceSharesMember2022-01-012022-09-300001720592rpay:KontrolMember2022-01-012022-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMember2022-07-012022-09-300001720592rpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2022-09-300001720592us-gaap:PrivatePlacementMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2021-01-190001720592rpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2020-09-300001720592rpay:PayixMemberus-gaap:DevelopedTechnologyRightsMember2021-12-290001720592us-gaap:NoncontrollingInterestMember2021-12-310001720592us-gaap:RevolvingCreditFacilityMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001720592us-gaap:PerformanceSharesMemberus-gaap:CommonClassAMember2022-01-012022-09-300001720592rpay:SeniorSecuredRevolvingCreditFacilityMemberrpay:NewCreditAgreementMember2021-12-290001720592rpay:OtherPayablesToRelatedPartiesMember2021-12-310001720592rpay:SuccessorCreditAgreementMember2020-02-090001720592us-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001720592rpay:PayixMemberus-gaap:DevelopedTechnologyRightsMember2021-12-292021-12-290001720592us-gaap:RestrictedStockUnitsRSUMember2021-12-310001720592rpay:CPSPaymentServicesLimitedLiabilityCompanyMember2021-01-012021-09-300001720592srt:WeightedAverageMember2022-09-3000017205922020-12-310001720592rpay:CPayPlusLLCMember2021-01-012021-09-300001720592rpay:CPSKontrolAndPayixMember2021-12-310001720592rpay:CPSPaymentServicesLimitedLiabilityCompanyMember2021-12-310001720592rpay:OtherPayablesToRelatedPartiesMember2022-09-300001720592us-gaap:RetainedEarningsMember2021-12-310001720592rpay:ContingentConsiderationMember2021-01-012021-09-300001720592us-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001720592us-gaap:RestrictedStockMember2022-01-012022-09-300001720592us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2022-09-300001720592srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2021-01-012021-09-300001720592us-gaap:CommonClassAMemberrpay:PostMergerRepayUnitsExchangeableMember2021-01-012021-09-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001720592us-gaap:LondonInterbankOfferedRateLIBORMemberrpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2020-02-210001720592rpay:MerchantRelationshipsMemberrpay:KontrolMember2021-06-222021-06-2200017205922021-06-150001720592us-gaap:PrivatePlacementMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMemberus-gaap:CommonClassAMember2021-01-192021-01-190001720592us-gaap:CommonClassAMemberrpay:TwoThousandNineteenEquityIncentiveAmendmentPlanMember2022-09-300001720592us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001720592rpay:PayixMember2022-07-012022-09-300001720592us-gaap:TreasuryStockMember2022-07-012022-09-300001720592rpay:ChannelRelationshipsMember2022-01-012022-09-300001720592rpay:ChannelRelationshipsMember2021-12-310001720592rpay:PayixMember2022-01-012022-09-300001720592rpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001720592us-gaap:TradeNamesMember2021-12-310001720592us-gaap:PerformanceSharesMember2022-09-300001720592us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001720592us-gaap:NoncompeteAgreementsMemberrpay:BillingTreeMember2021-06-132021-06-150001720592us-gaap:CustomerRelationshipsMember2021-12-310001720592rpay:SeniorSecuredRevolvingCreditFacilityMemberrpay:SuccessorCreditAgreementMember2021-02-020001720592us-gaap:AdditionalPaidInCapitalMember2021-09-300001720592us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2022-01-012022-09-300001720592us-gaap:AdditionalPaidInCapitalMember2022-09-300001720592rpay:PayixHoldingsIncorporatedMember2021-12-310001720592us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-07-012021-09-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-09-300001720592rpay:ContingentConsiderationMember2020-12-310001720592us-gaap:TreasuryStockMember2022-01-012022-09-300001720592rpay:KontrolMember2022-07-012022-09-300001720592us-gaap:RevolvingCreditFacilityMember2022-01-012022-09-300001720592rpay:SuccessorCreditAgreementMemberrpay:RevolvingCreditAndTermLoanMember2022-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMemberus-gaap:CommonClassAMember2022-01-012022-09-300001720592us-gaap:ComputerSoftwareIntangibleAssetMember2021-01-012021-12-310001720592rpay:ContingentConsiderationMember2021-09-300001720592us-gaap:NoncompeteAgreementsMember2021-12-310001720592srt:MinimumMember2022-09-300001720592rpay:ContingentConsiderationMember2021-12-310001720592us-gaap:PrivatePlacementMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMemberus-gaap:CommonClassAMember2021-01-190001720592rpay:ClassVCommonStockMember2022-09-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-07-012022-09-300001720592us-gaap:TradeNamesMember2022-09-300001720592rpay:SeniorSecuredRevolvingCreditFacilityMemberrpay:NewCreditAgreementMemberrpay:TruistBankMember2021-02-030001720592us-gaap:CommonStockMemberrpay:ClassVCommonStockMember2021-06-300001720592rpay:KontrolMember2021-12-310001720592us-gaap:FairValueInputsLevel3Member2022-09-300001720592rpay:RegionsBankMemberus-gaap:InterestRateSwapMember2019-10-012019-10-310001720592us-gaap:NoncompeteAgreementsMember2022-01-012022-09-300001720592us-gaap:FairValueInputsLevel3Member2021-12-310001720592us-gaap:FairValueInputsLevel2Member2021-12-310001720592us-gaap:NoncontrollingInterestMember2021-06-3000017205922021-01-012021-09-300001720592rpay:KontrolMember2021-06-222021-06-2200017205922019-07-112019-07-110001720592us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001720592us-gaap:InterestExpenseMember2022-07-012022-09-300001720592us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-09-300001720592us-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-300001720592rpay:ContingentConsiderationMember2022-09-300001720592rpay:MerchantRelationshipsMemberrpay:BillingTreeMember2021-06-150001720592rpay:CPSPaymentServicesLLCAndMediaPaymentsLLCMember2021-01-012021-09-300001720592rpay:TaxReceivableAgreementMember2022-01-012022-09-300001720592us-gaap:ComputerSoftwareIntangibleAssetMember2022-01-012022-09-300001720592rpay:MerchantRelationshipsMemberrpay:PayixMember2021-12-292021-12-290001720592rpay:TaxReceivableAgreementMember2021-09-300001720592rpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001720592us-gaap:RetainedEarningsMember2022-06-300001720592rpay:TaxReceivableAgreementMember2020-12-310001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2020-12-310001720592rpay:KontrolMember2021-06-220001720592rpay:MerchantRelationshipsMemberrpay:KontrolMember2021-06-220001720592us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001720592us-gaap:CommonClassAMemberus-gaap:RestrictedStockMember2021-01-012021-09-300001720592us-gaap:RetainedEarningsMember2022-09-300001720592us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2022-09-300001720592rpay:PayixMember2021-12-292021-12-290001720592us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2021-12-310001720592rpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2020-02-210001720592us-gaap:RetainedEarningsMember2021-07-012021-09-300001720592us-gaap:SalesChannelDirectlyToConsumerMember2021-07-012021-09-300001720592us-gaap:NoncontrollingInterestMember2022-06-300001720592rpay:TaxReceivableAgreementMember2021-12-310001720592us-gaap:CarryingReportedAmountFairValueDisclosureMemberrpay:ConvertibleSeniorNotesDueTwoThousandAndTwentySixMember2022-09-300001720592us-gaap:FairValueInputsLevel2Member2022-09-3000017205922021-01-012021-12-310001720592rpay:CPSPaymentServicesLimitedLiabilityCompanyMember2022-09-300001720592us-gaap:RestrictedStockMember2021-12-310001720592us-gaap:DevelopedTechnologyRightsMemberrpay:BillingTreeMember2021-06-1500017205922022-07-012022-09-300001720592us-gaap:TreasuryStockMember2022-09-3000017205922022-06-300001720592us-gaap:DevelopedTechnologyRightsMemberrpay:BillingTreeMember2021-06-132021-06-150001720592rpay:PayixMember2021-12-290001720592rpay:BillingTreeMember2022-01-012022-09-300001720592rpay:NewCreditAgreementMember2022-01-012022-09-300001720592rpay:CPSKontrolAndPayixMember2022-09-300001720592us-gaap:CommonClassAMemberrpay:BillingTreeMember2021-01-012021-09-300001720592us-gaap:CommonClassAMember2022-07-012022-09-300001720592us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001720592srt:MaximumMember2022-09-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-06-300001720592us-gaap:CommonClassAMemberrpay:PostMergerRepayUnitsExchangeableMember2021-07-012021-09-300001720592us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMemberus-gaap:CommonClassAMember2021-01-012021-09-300001720592us-gaap:ComputerEquipmentMember2021-12-310001720592rpay:TwoThousandAndTwentySixConvertibleNotesMemberus-gaap:CommonClassAMember2021-07-012021-09-300001720592rpay:MerchantRelationshipsMemberrpay:BillingTreeMember2021-06-132021-06-150001720592rpay:SeniorSecuredRevolvingCreditFacilityMemberrpay:NewCreditAgreementMember2021-12-280001720592us-gaap:TradeNamesMemberrpay:BillingTreeMember2022-01-012022-09-300001720592us-gaap:NoncontrollingInterestMember2021-09-300001720592rpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2021-01-012021-12-310001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMember2021-07-012021-09-300001720592rpay:KontrolMemberus-gaap:TradeNamesMember2021-06-220001720592rpay:FurnitureFixturesAndOfficeEquipmentMember2022-09-3000017205922022-09-300001720592rpay:KontrolMember2021-01-012021-09-300001720592us-gaap:RetainedEarningsMember2021-09-300001720592us-gaap:NoncompeteAgreementsMember2022-09-3000017205922022-01-012022-09-300001720592rpay:TaxReceivableAgreementMember2022-09-300001720592rpay:NewCreditAgreementMember2021-01-012021-09-300001720592us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-09-300001720592us-gaap:RestrictedStockMember2022-09-300001720592rpay:NewCreditAgreementMember2022-07-012022-09-300001720592rpay:BillingTreeMember2021-06-150001720592rpay:CPayPlusLLCMember2021-07-012021-09-300001720592us-gaap:RevolvingCreditFacilityMember2021-12-310001720592us-gaap:NoncompeteAgreementsMemberrpay:BillingTreeMember2021-06-150001720592rpay:InterestRateSwapTwoMemberrpay:RegionsBankMember2020-02-212020-02-210001720592us-gaap:RevolvingCreditFacilityMember2021-01-012021-12-310001720592us-gaap:NoncontrollingInterestMember2020-12-310001720592rpay:VentanexMember2021-07-012021-09-300001720592us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001720592us-gaap:SalesChannelDirectlyToConsumerMember2021-01-012021-09-300001720592us-gaap:RestrictedStockUnitsRSUMember2022-09-300001720592rpay:CPSPaymentServicesLLCAndMediaPaymentsLLCMember2021-07-012021-09-300001720592us-gaap:CommonClassAMember2022-09-300001720592rpay:TwoThousandAndTwentySixConvertibleNotesMemberus-gaap:CommonClassAMember2021-01-012021-09-300001720592us-gaap:NoncontrollingInterestMember2021-01-012021-09-300001720592us-gaap:PerformanceSharesMemberus-gaap:CommonClassAMember2022-09-300001720592rpay:InterestRateSwapTwoMember2020-09-300001720592srt:MaximumMemberrpay:PayixMember2021-12-290001720592us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001720592us-gaap:RetainedEarningsMember2021-06-3000017205922021-12-310001720592us-gaap:NoncontrollingInterestMember2022-01-012022-09-300001720592rpay:BillingTreeMember2021-01-012021-09-300001720592us-gaap:NoncontrollingInterestMember2021-07-012021-09-300001720592rpay:BillingTreeKontrolAndPayixAcquisitionsMember2021-01-012021-09-30xbrli:purerpay:Segmentiso4217:USDxbrli:sharesxbrli:sharesrpay:TradeNamerpay:Unitiso4217:USD

 

 

 

 

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, 2022

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

 

 

img46557467_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.)

3 West Paces Ferry Road,

Suite 200

Atlanta, GA

30305

(Address of principal executive offices)

(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 4, 2022, there are 90,689,075 shares of the registrant’s Class A Common Stock, par value $0.0001 per share, outstanding (which number includes 2,186,597 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 4, 2022, the holders of such outstanding shares of Class V common stock also hold 7,875,731 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, 2022

 

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

25

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

 

 

 

Item 4.

Controls and Procedures

40

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

41

 

 

 

Item 1A.

Risk Factors

41

 

 

 

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

42

 

 

 

Item 6.

Exhibits

42

 

 

 

 

Signatures

43

 

 

 

 


 

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 inflationary pressures, general economic slowdown or recession; the impacts of the ongoing COVID-19 pandemic, including the continued emergence of new variants, and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of our 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 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, 2021. 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

 

 

September 30, 2022 (Unaudited)

 

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

$

63,547,390

 

 

 

$

50,048,657

 

Accounts receivable

 

34,485,005

 

 

 

 

33,235,745

 

Prepaid expenses and other

 

15,482,738

 

 

 

 

12,427,032

 

Total current assets

 

113,515,133

 

 

 

 

95,711,434

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

4,702,988

 

 

 

 

3,801,199

 

Restricted cash

 

23,178,232

 

 

 

 

26,291,269

 

Intangible assets, net

 

523,148,000

 

 

 

 

577,693,902

 

Goodwill

 

827,802,003

 

 

 

 

824,081,632

 

Operating lease right-of-use assets, net

 

10,774,839

 

 

 

 

10,499,751

 

Deferred tax assets

 

134,275,387

 

 

 

 

145,259,883

 

Other assets

 

2,499,996

 

 

 

 

2,499,996

 

Total noncurrent assets

 

1,526,381,445

 

 

 

 

1,590,127,632

 

Total assets

$

1,639,896,578

 

 

 

$

1,685,839,066

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable

$

23,250,867

 

 

 

$

20,082,651

 

Related party payable

 

100,175

 

 

 

 

17,394,125

 

Accrued expenses

 

24,714,521

 

 

 

 

26,819,083

 

Current operating lease liabilities

 

2,306,672

 

 

 

 

1,990,416

 

Current tax receivable agreement

 

24,454,088

 

 

 

 

24,495,556

 

Other current liabilities

 

4,244

 

 

 

 

1,565,931

 

Total current liabilities

 

74,830,567

 

 

 

 

92,347,762

 

 

 

 

 

 

 

 

Long-term debt

 

450,607,659

 

 

 

 

448,484,696

 

Noncurrent operating lease liabilities

 

9,168,904

 

 

 

 

9,090,867

 

Tax receivable agreement, net of current portion

 

166,046,812

 

 

 

 

221,332,863

 

Other liabilities

 

4,335,932

 

 

 

 

1,547,087

 

Total noncurrent liabilities

 

630,159,307

 

 

 

 

680,455,513

 

Total liabilities

$

704,989,874

 

 

 

$

772,803,275

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized, 89,078,338 issued and 88,397,790 outstanding as of September 30, 2022; 2,000,000,000 shares authorized, and 88,502,621 issued and outstanding as of December 31, 2021

 

8,840

 

 

 

 

8,850

 

Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Additional paid-in capital

 

1,112,545,652

 

 

 

 

1,100,012,082

 

Treasury stock, 680,548 and 0 shares as of September 30, 2022 and December 31, 2021, respectively

 

(6,824,038

)

 

 

 

 

Accumulated other comprehensive loss

 

(2,205

)

 

 

 

(2,205

)

Accumulated deficit

 

(206,507,727

)

 

 

 

(226,015,886

)

Total Repay stockholders' equity

$

899,220,522

 

 

 

$

874,002,841

 

Non-controlling interests

 

35,686,182

 

 

 

 

39,032,950

 

Total equity

$

934,906,704

 

 

 

$

913,035,791

 

Total liabilities and equity

$

1,639,896,578

 

 

 

$

1,685,839,066

 

 

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,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

$

71,555,099

 

 

$

61,125,384

 

 

$

206,553,935

 

 

$

157,057,751

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

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

 

16,633,889

 

 

 

15,287,720

 

 

 

49,930,273

 

 

 

40,483,326

 

Selling, general and administrative

 

36,031,642

 

 

 

33,696,220

 

 

 

107,379,447

 

 

 

86,631,634

 

Depreciation and amortization

 

24,661,807

 

 

 

25,907,374

 

 

 

82,441,725

 

 

 

63,379,348

 

Change in fair value of contingent consideration

 

(340,000

)

 

 

(1,550,000

)

 

 

(4,290,000

)

 

 

(101,214

)

Total operating expenses

 

76,987,338

 

 

 

73,341,314

 

 

 

235,461,445

 

 

 

190,393,094

 

Loss from operations

 

(5,432,239

)

 

 

(12,215,930

)

 

 

(28,907,510

)

 

 

(33,335,343

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,130,372

)

 

 

(763,614

)

 

 

(3,170,158

)

 

 

(2,763,592

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

(5,940,600

)

Change in fair value of tax receivable liability

 

11,410,730

 

 

 

3,410,955

 

 

 

55,480,765

 

 

 

98,505

 

Other income

 

53,616

 

 

 

18,816

 

 

 

70,440

 

 

 

81,352

 

Other loss

 

(3,601

)

 

 

(19,041

)

 

 

(153,835

)

 

 

(9,099,451

)

Total other income (expense)

 

10,330,373

 

 

 

2,647,116

 

 

 

52,227,212

 

 

 

(17,623,786

)

Income (loss) before income tax (expense) benefit

 

4,898,134

 

 

 

(9,568,814

)

 

 

23,319,702

 

 

 

(50,959,129

)

Income tax (expense) benefit

 

473,909

 

 

 

2,260,704

 

 

 

(6,414,025

)

 

 

12,319,951

 

Net income (loss)

$

5,372,043

 

 

$

(7,308,110

)

 

$

16,905,677

 

 

$

(38,639,178

)

Less: Net loss attributable to
   non-controlling interests

 

(473,160

)

 

 

(1,042,074

)

 

 

(2,602,482

)

 

 

(4,310,144

)

Net income (loss) attributable to the Company

$

5,845,203

 

 

$

(6,266,036

)

 

$

19,508,159

 

 

$

(34,329,034

)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.07

 

 

$

(0.07

)

 

$

0.22

 

 

$

(0.42

)

Diluted

$

0.05

 

 

$

(0.07

)

 

$

0.18

 

 

$

(0.42

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

88,735,518

 

 

 

88,273,194

 

 

 

88,749,417

 

 

 

81,595,128

 

Diluted

 

110,114,054

 

 

 

88,273,194

 

 

 

110,789,646

 

 

 

81,595,128

 

 

See accompanying notes to condensed consolidated financial statements.

 

2


 

REPAY HOLDINGS CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

5,372,043

 

 

$

(7,308,110

)

 

$

16,905,677

 

 

$

(38,639,178

)

Other comprehensive income, before tax

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of net unrealized loss on cash flow hedges to other loss

 

 

 

 

 

 

 

 

 

 

 

9,317,244

 

Total other comprehensive income, before tax

 

 

 

 

 

 

 

 

 

 

 

9,317,244

 

Income tax related to items of other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense on reclassification of net unrealized loss on cash flow hedges to other loss

 

 

 

 

 

 

 

 

 

 

 

(1,672,743

)

Total income tax expense on related to items of other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

(1,672,743

)

Total other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

7,644,501

 

Total comprehensive income (loss)

 

$

5,372,043

 

 

$

(7,308,110

)

 

$

16,905,677

 

 

$

(30,994,677

)

Less: Comprehensive loss attributable to non-controlling interests

 

 

(473,160

)

 

 

(1,042,074

)

 

 

(2,602,482

)

 

 

(3,102,406

)

Comprehensive income (loss) attributable to the Company

 

$

5,845,203

 

 

$

(6,266,036

)

 

$

19,508,159

 

 

$

(27,892,271

)

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

3


 

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

 

 

Accumulated Other Comprehensive

 

 

Non-controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

(Loss) Income

 

 

Interests

 

 

Equity

 

Balance at June 30, 2021

 

 

88,222,430

 

 

$

8,822

 

 

 

100

 

 

$

-

 

 

$

1,073,163,704

 

 

$

-

 

 

$

(203,994,711

)

 

$

-

 

 

$

41,796,633

 

 

$

910,974,448

 

Exchange of Post-Merger Repay Units

 

 

7,317

 

 

 

1

 

 

 

 

 

 

-

 

 

 

37,943

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(37,944

)

 

 

-

 

Release of share awards vested under Incentive Plan

 

 

112,416

 

 

 

11

 

 

 

 

 

 

-

 

 

 

(11

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Shares repurchased under Incentive Plan

 

 

(19,095

)

 

 

(2

)

 

 

 

 

 

-

 

 

 

(458,150

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,482

 

 

 

(455,670

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

5,577,930

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,633

)

 

 

5,573,297

 

Tax distribution from Hawk Parent

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

(62,327

)

 

 

(62,327

)

Valuation allowance on Ceiling Rule DTA

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

14,125,404

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,125,404

 

Net loss

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,266,036

)

 

 

-

 

 

 

(1,042,074

)

 

 

(7,308,110

)

Balance at September 30, 2021

 

 

88,323,068

 

 

$

8,832

 

 

 

100

 

 

$

-

 

 

$

1,092,446,820

 

 

$

-

 

 

$

(210,260,747

)

 

$

-

 

 

$

40,652,137

 

 

$

922,847,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2022

 

 

88,892,919

 

 

$

8,889

 

 

 

100

 

 

$

-

 

 

$

1,107,431,623

 

 

$

(1,151,532

)

 

$

(212,352,930

)

 

$

(2,205

)