false Yes Q2 0001720592 --12-31 Yes Accelerated Filer us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:MeasurementInputDiscountRateMember us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:MeasurementInputDiscountRateMember P5Y P5Y P10Y P5Y P3Y P10Y P9Y10D P9Y10D P1Y11M19D P1Y10M2D P7Y4M9D P9Y5M23D P9Y6M10D P2Y6M14D P2Y3M10D P7Y10M24D 0001720592 2020-01-01 2020-06-30 xbrli:shares 0001720592 us-gaap:CommonClassAMember 2020-08-06 0001720592 rpay:ClassVCommonStockMember 2020-08-06 iso4217:USD 0001720592 2020-06-30 0001720592 2019-12-31 0001720592 us-gaap:CommonClassAMember 2020-06-30 0001720592 us-gaap:CommonClassAMember 2019-12-31 iso4217:USD xbrli:shares 0001720592 rpay:ClassVCommonStockMember 2020-06-30 0001720592 2020-04-01 2020-06-30 0001720592 2019-04-01 2019-06-30 0001720592 2019-01-01 2019-06-30 0001720592 2018-12-31 0001720592 2019-01-01 2019-03-31 0001720592 2019-03-31 0001720592 2019-06-30 0001720592 rpay:ClassVCommonStockMember 2019-12-31 0001720592 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001720592 us-gaap:RetainedEarningsMember 2019-12-31 0001720592 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001720592 us-gaap:NoncontrollingInterestMember 2019-12-31 0001720592 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001720592 2020-01-01 2020-03-31 0001720592 us-gaap:CommonClassAMember 2020-01-01 2020-03-31 0001720592 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001720592 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0001720592 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001720592 us-gaap:CommonClassAMember 2020-03-31 0001720592 rpay:ClassVCommonStockMember 2020-03-31 0001720592 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001720592 us-gaap:RetainedEarningsMember 2020-03-31 0001720592 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001720592 2020-03-31 0001720592 us-gaap:NoncontrollingInterestMember 2020-03-31 0001720592 us-gaap:CommonClassAMember 2020-04-01 2020-06-30 0001720592 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001720592 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001720592 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001720592 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001720592 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001720592 us-gaap:RetainedEarningsMember 2020-06-30 0001720592 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001720592 us-gaap:NoncontrollingInterestMember 2020-06-30 0001720592 rpay:VentanexMember 2020-01-01 2020-06-30 0001720592 rpay:APSPaymentsMember 2020-01-01 2020-06-30 0001720592 us-gaap:CommonClassAMember 2020-01-01 2020-06-30 0001720592 rpay:ContingentConsiderationMember 2020-01-01 2020-06-30 0001720592 rpay:TaxReceivableAgreementMember 2020-01-01 2020-06-30 0001720592 us-gaap:CommonClassAMember rpay:FollowOnOfferingMember 2020-06-02 2020-06-02 0001720592 us-gaap:CommonClassAMember 2020-06-02 2020-06-02 0001720592 us-gaap:CommonClassAMember rpay:FollowOnOfferingMember 2020-06-02 0001720592 us-gaap:CommonClassAMember rpay:UnderwritingDiscountsAndCommissionsMember 2020-06-02 0001720592 rpay:UnitPurchaseAgreementMember rpay:CCPaymentHoldingsLimitedLiabilityCorporationMember 2020-05-28 2020-05-28 0001720592 rpay:UnitPurchaseAgreementMember rpay:CCPaymentHoldingsLimitedLiabilityCorporationMember 2020-05-28 0001720592 us-gaap:SalesChannelDirectlyToConsumerMember 2020-04-01 2020-06-30 0001720592 us-gaap:SalesChannelDirectlyToConsumerMember 2020-01-01 2020-06-30 0001720592 us-gaap:SalesChannelDirectlyToConsumerMember 2019-04-01 2019-06-30 0001720592 us-gaap:SalesChannelDirectlyToConsumerMember 2019-01-01 2019-06-30 0001720592 us-gaap:SalesChannelThroughIntermediaryMember 2020-04-01 2020-06-30 0001720592 us-gaap:SalesChannelThroughIntermediaryMember 2020-01-01 2020-06-30 0001720592 us-gaap:SalesChannelThroughIntermediaryMember 2019-04-01 2019-06-30 0001720592 us-gaap:SalesChannelThroughIntermediaryMember 2019-01-01 2019-06-30 0001720592 us-gaap:CommonClassAMember rpay:PostMergerRepayUnitsExchangeableMember 2020-04-01 2020-06-30 0001720592 us-gaap:CommonClassAMember rpay:PostMergerRepayUnitsExchangeableMember 2020-01-01 2020-06-30 0001720592 us-gaap:CommonClassAMember us-gaap:WarrantMember 2020-04-01 2020-06-30 0001720592 us-gaap:CommonClassAMember us-gaap:WarrantMember 2020-01-01 2020-06-30 0001720592 us-gaap:CommonClassAMember us-gaap:RestrictedStockMember 2020-04-01 2020-06-30 0001720592 us-gaap:CommonClassAMember us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001720592 rpay:APSPaymentsMember 2019-10-14 2019-10-14 rpay:EarnoutPayment 0001720592 srt:MaximumMember rpay:APSPaymentsMember 2019-10-14 0001720592 rpay:APSPaymentsMember 2020-04-06 2020-04-06 0001720592 rpay:APSPaymentsMember 2020-04-01 2020-06-30 0001720592 rpay:APSPaymentsMember 2019-10-14 0001720592 us-gaap:NoncompeteAgreementsMember rpay:APSPaymentsMember 2019-10-14 0001720592 us-gaap:TradeNamesMember rpay:APSPaymentsMember 2019-10-14 0001720592 rpay:MerchantRelationshipsMember rpay:APSPaymentsMember 2019-10-14 0001720592 us-gaap:NoncompeteAgreementsMember rpay:APSPaymentsMember 2019-10-14 2019-10-14 0001720592 us-gaap:TradeNamesMember rpay:APSPaymentsMember 2020-01-01 2020-06-30 0001720592 rpay:MerchantRelationshipsMember rpay:APSPaymentsMember 2019-10-14 2019-10-14 0001720592 rpay:VentanexMember 2020-02-08 2020-02-10 0001720592 srt:MaximumMember rpay:VentanexMember 2020-02-10 0001720592 rpay:VentanexMember 2020-02-10 0001720592 us-gaap:NoncompeteAgreementsMember rpay:VentanexMember 2020-02-10 0001720592 us-gaap:TradeNamesMember rpay:VentanexMember 2020-02-10 0001720592 us-gaap:DevelopedTechnologyRightsMember rpay:VentanexMember 2020-02-10 0001720592 rpay:MerchantRelationshipsMember rpay:VentanexMember 2020-02-10 0001720592 us-gaap:NoncompeteAgreementsMember rpay:VentanexMember 2020-02-08 2020-02-10 0001720592 us-gaap:TradeNamesMember rpay:VentanexMember 2020-01-01 2020-06-30 0001720592 us-gaap:DevelopedTechnologyRightsMember rpay:VentanexMember 2020-02-08 2020-02-10 0001720592 rpay:MerchantRelationshipsMember rpay:VentanexMember 2020-02-08 2020-02-10 0001720592 rpay:VentanexMember 2020-04-01 2020-06-30 0001720592 rpay:VentanexMember 2020-02-11 2020-06-30 0001720592 rpay:VentanexMember 2019-04-01 2019-06-30 0001720592 rpay:VentanexMember 2019-01-01 2019-06-30 0001720592 us-gaap:FairValueInputsLevel1Member 2020-06-30 0001720592 us-gaap:FairValueInputsLevel3Member 2020-06-30 0001720592 us-gaap:FairValueInputsLevel2Member 2020-06-30 0001720592 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001720592 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001720592 us-gaap:FairValueInputsLevel3Member 2019-12-31 xbrli:pure 0001720592 srt:MinimumMember 2020-06-30 0001720592 srt:MaximumMember 2020-06-30 0001720592 srt:WeightedAverageMember 2020-06-30 0001720592 rpay:ContingentConsiderationMember 2019-12-31 0001720592 rpay:ContingentConsiderationMember 2018-12-31 0001720592 rpay:ContingentConsiderationMember 2019-01-01 2019-06-30 0001720592 rpay:ContingentConsiderationMember 2020-06-30 0001720592 rpay:TaxReceivableAgreementMember 2020-06-30 0001720592 rpay:TaxReceivableAgreementMember 2019-12-31 0001720592 rpay:TaxReceivableAgreementMember 2020-06-30 0001720592 us-gaap:InterestRateSwapMember 2019-10-31 0001720592 us-gaap:InterestRateSwapMember 2020-02-29 0001720592 us-gaap:InterestRateSwapMember 2019-10-01 2019-10-31 0001720592 us-gaap:InterestRateSwapMember 2020-02-01 2020-02-29 0001720592 us-gaap:InterestRateSwapMember 2020-06-30 0001720592 rpay:FurnitureFixturesAndOfficeEquipmentMember 2020-06-30 0001720592 rpay:FurnitureFixturesAndOfficeEquipmentMember 2019-12-31 0001720592 us-gaap:ComputerEquipmentMember 2020-06-30 0001720592 us-gaap:ComputerEquipmentMember 2019-12-31 0001720592 us-gaap:LeaseholdImprovementsMember 2020-06-30 0001720592 us-gaap:LeaseholdImprovementsMember 2019-12-31 rpay:TradeName 0001720592 2019-07-10 2020-06-30 0001720592 us-gaap:CustomerRelationshipsMember 2020-06-30 0001720592 rpay:ChannelRelationshipsMember 2020-06-30 0001720592 us-gaap:ComputerSoftwareIntangibleAssetMember 2020-06-30 0001720592 us-gaap:NoncompeteAgreementsMember 2020-06-30 0001720592 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-06-30 0001720592 rpay:ChannelRelationshipsMember 2020-01-01 2020-06-30 0001720592 us-gaap:ComputerSoftwareIntangibleAssetMember 2020-01-01 2020-06-30 0001720592 us-gaap:NoncompeteAgreementsMember 2020-01-01 2020-06-30 0001720592 us-gaap:CustomerRelationshipsMember 2019-12-31 0001720592 rpay:ChannelRelationshipsMember 2019-12-31 0001720592 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-12-31 0001720592 us-gaap:NoncompeteAgreementsMember 2019-12-31 0001720592 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-12-31 0001720592 rpay:ChannelRelationshipsMember 2019-01-01 2019-12-31 0001720592 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-01-01 2019-12-31 0001720592 us-gaap:NoncompeteAgreementsMember 2019-01-01 2019-12-31 0001720592 2019-01-01 2019-12-31 rpay:Segment rpay:Unit 0001720592 us-gaap:RevolvingCreditFacilityMember rpay:PriorCreditAgreementMember 2019-07-11 0001720592 us-gaap:RevolvingCreditFacilityMember rpay:PriorCreditAgreementMember 2019-04-01 2019-06-30 0001720592 us-gaap:RevolvingCreditFacilityMember rpay:PriorCreditAgreementMember 2019-01-01 2019-06-30 0001720592 rpay:NewCreditAgreementMember rpay:RevolvingCreditAndTermLoanMember 2020-01-01 2020-06-30 0001720592 rpay:NewCreditAgreementMember rpay:RevolvingCreditAndTermLoanMember 2020-06-30 0001720592 rpay:NewCreditAgreementMember 2020-02-09 0001720592 rpay:NewCreditAgreementMember 2020-02-10 0001720592 rpay:NewCreditAgreementMember 2020-01-01 2020-06-30 0001720592 rpay:TermLoanMember rpay:NewCreditAgreementMember 2020-02-10 0001720592 rpay:DelayedDrawTermLoanMember rpay:NewCreditAgreementMember 2020-02-10 0001720592 rpay:NewCreditAgreementMember us-gaap:RevolvingCreditFacilityMember 2020-02-10 0001720592 rpay:DelayedDrawTermLoanMember rpay:NewCreditAgreementMember 2020-06-30 0001720592 rpay:NewCreditAgreementMember us-gaap:RevolvingCreditFacilityMember 2020-06-30 0001720592 rpay:NewCreditAgreementMember 2020-04-01 2020-06-30 0001720592 rpay:TermLoanMember 2020-06-30 0001720592 rpay:TermLoanMember 2019-12-31 0001720592 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001720592 rpay:TermLoanMember 2020-01-01 2020-06-30 0001720592 rpay:TermLoanMember 2019-01-01 2019-12-31 0001720592 rpay:DelayedDrawTermLoanMember 2020-01-01 2020-06-30 0001720592 rpay:DelayedDrawTermLoanMember 2019-01-01 2019-12-31 0001720592 us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-06-30 0001720592 us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-12-31 0001720592 us-gaap:InterestExpenseMember 2020-04-01 2020-06-30 0001720592 us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001720592 us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0001720592 us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0001720592 rpay:TermLoanMember 2020-04-01 2020-06-30 0001720592 rpay:TermLoanMember 2019-04-01 2019-06-30 0001720592 rpay:TermLoanMember 2019-01-01 2019-06-30 0001720592 us-gaap:InterestRateSwapMember rpay:RegionsBankMember 2019-10-31 0001720592 us-gaap:InterestRateSwapMember rpay:RegionsBankMember 2019-10-01 2019-10-31 0001720592 rpay:RegionsBankMember rpay:InterestRateSwapTwoMember 2020-02-21 0001720592 us-gaap:LondonInterbankOfferedRateLIBORMember rpay:RegionsBankMember rpay:InterestRateSwapTwoMember 2020-02-21 0001720592 rpay:RegionsBankMember rpay:InterestRateSwapTwoMember 2020-02-21 2020-02-21 0001720592 rpay:InterestRateSwapOneMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember 2020-06-30 0001720592 rpay:InterestRateSwapTwoMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember 2020-06-30 0001720592 rpay:InterestRateSwapOneMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember 2020-01-01 2020-06-30 0001720592 rpay:InterestRateSwapTwoMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember 2020-01-01 2020-06-30 0001720592 rpay:TriSourceMember 2020-06-30 0001720592 rpay:TriSourceMember 2019-12-31 0001720592 rpay:APSPaymentsMember 2020-06-30 0001720592 rpay:APSPaymentsMember 2019-12-31 0001720592 rpay:VentanexMember 2020-06-30 0001720592 rpay:OtherPayablesToRelatedPartiesMember 2020-06-30 0001720592 rpay:OtherPayablesToRelatedPartiesMember 2019-12-31 0001720592 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-04-01 2019-06-30 0001720592 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-06-30 0001720592 rpay:TwoThousandNineteenEquityIncentivePlanMember 2020-06-30 0001720592 us-gaap:CommonClassAMember rpay:RestrictedStockAwardAndRestrictedStockUnitsRSUMember 2019-12-31 0001720592 us-gaap:CommonClassAMember rpay:RestrictedStockAwardAndRestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 0001720592 us-gaap:CommonClassAMember rpay:RestrictedStockAwardAndRestrictedStockUnitsRSUMember 2020-06-30 0001720592 2019-07-11 2019-07-11 0001720592 rpay:CorsairCapitalLimitedLiabilityCompanyMember 2020-06-30 0001720592 rpay:CPayPlusLLCMember us-gaap:SubsequentEventMember 2020-07-23 2020-07-23 0001720592 rpay:CPayPlusLLCMember us-gaap:SubsequentEventMember srt:MaximumMember 2020-07-23 2020-07-23 0001720592 us-gaap:SubsequentEventMember 2020-07-26 0001720592 us-gaap:SubsequentEventMember us-gaap:CommonClassAMember 2020-07-27 2020-07-27

 

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 June 30, 2020

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

 

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: (404504-7472

 

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 August 6, 2020, there are 58,515,846 shares of the registrant’s Class A Common Stock, par value $0.0001 per share, outstanding (which number includes 2,271,603 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 August 6, 2020, the holders of such outstanding shares of Class V common stock also hold 23,083,755 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 June 30, 2020

 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

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

38

 

 

 

Item 4.

Controls and Procedures

39

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

40

 

 

 

Item 1A.

Risk Factors

40

 

 

 

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, the expected impact of the COVID-19 pandemic, the expected benefits of our recent acquisitions, our financial performance, 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 and consumer and commercial spending; the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread (which impacts are highly uncertain and cannot be reasonably estimated or predicted at this time); a delay or failure to integrate and realize the benefits of our recent acquisitions and any difficulties associated with operating in the markets in which we have limited experience; 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; 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 develop and maintain effective internal controls; and those risks described under Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K and Part II, Item 1A “Risk Factors" of this Form 10-Q. 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

 


 

 

 

 

 

 

 

 

 

 

 

June 30, 2020 (Unaudited)

 

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

165,914,391

 

 

 

$

24,617,996

 

Accounts receivable

 

14,231,350

 

 

 

 

14,068,477

 

Related party receivable

 

-

 

 

 

 

563,084

 

Prepaid expenses and other

 

4,635,036

 

 

 

 

4,632,965

 

Total current assets

 

184,780,777

 

 

 

 

43,882,522

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

1,788,822

 

 

 

 

1,610,652

 

Restricted cash

 

13,794,839

 

 

 

 

13,283,121

 

Customer relationships, net of amortization

 

258,135,064

 

 

 

 

247,589,240

 

Software, net of amortization

 

59,587,029

 

 

 

 

61,219,143

 

Other intangible assets, net of amortization

 

24,109,471

 

 

 

 

24,241,505

 

Goodwill

 

412,167,853

 

 

 

 

389,660,519

 

Deferred tax assets

 

25,766,581

 

 

 

 

-

 

Other assets

 

-

 

 

 

 

555,449

 

Total noncurrent assets

 

795,349,659

 

 

 

 

738,159,629

 

Total assets

$

980,130,436

 

 

 

$

782,042,151

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable

$

10,225,022

 

 

 

$

9,586,001

 

Related party payable

 

18,224,056

 

 

 

 

14,571,266

 

Accrued expenses

 

15,880,690

 

 

 

 

15,965,683

 

Current maturities of long-term debt

 

7,175,650

 

 

 

 

5,500,000

 

Current tax receivable agreement

 

7,827,480

 

 

 

 

6,336,487

 

Total current liabilities

 

59,332,898

 

 

 

 

51,959,437

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

252,529,352

 

 

 

 

197,942,705

 

Line of credit

 

-

 

 

 

 

10,000,000

 

Tax receivable agreement, net of current portion

 

99,752,153

 

 

 

 

60,839,739

 

Deferred tax liability

 

-

 

 

 

 

768,335

 

Other liabilities

 

10,878,251

 

 

 

 

16,864

 

Total noncurrent liabilities

 

363,159,756

 

 

 

 

269,567,643

 

Total liabilities

$

422,492,654

 

 

 

$

321,527,080

 

 

 

 

 

 

 

 

 

 

Commitment and contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized and 52,018,330 issued and outstanding as of June 30, 2020

 

5,202

 

 

 

 

3,753

 

Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of June 30, 2020

 

-

 

 

 

 

-

 

Additional paid-in capital

 

474,608,423

 

 

 

 

307,914,346

 

Accumulated other comprehensive (loss) income

 

(6,882,240

)

 

 

 

313,397

 

Accumulated deficit

 

(69,938,145

)

 

 

 

(53,878,460

)

Total stockholders' equity

$

397,793,240

 

 

 

$

254,353,036

 

 

 

 

 

 

 

 

 

 

Equity attributable to non-controlling interests

 

159,844,542

 

 

 

 

206,162,035

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity and members' equity

$

980,130,436

 

 

 

$

782,042,151

 

 

See accompanying notes to consolidated financial statements.

2


 

REPAY HOLDINGS CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended June 30, 2020

 

 

Six Months Ended

June 30, 2020

 

 

 

Three Months Ended June 30, 2019

 

 

Six Months Ended

June 30, 2019

 

 

(Successor)

 

 

 

(Predecessor)

 

Revenue

$

36,500,525

 

 

$

75,963,062

 

 

 

$

21,685,675

 

 

 

44,709,081

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services

 

8,726,627

 

 

 

19,497,924

 

 

 

 

4,629,021

 

 

 

9,748,206

 

Selling, general and administrative

 

19,018,212

 

 

 

37,184,403

 

 

 

 

8,455,545

 

 

 

17,132,179

 

Depreciation and amortization

 

14,705,598

 

 

 

28,609,982

 

 

 

 

2,975,299

 

 

 

5,889,627

 

Change in fair value of contingent consideration

 

740,000

 

 

 

740,000

 

 

 

 

-

 

 

 

-

 

Total operating expenses

 

43,190,437

 

 

 

86,032,309

 

 

 

 

16,059,865

 

 

 

32,770,012

 

(Loss) Income from operations

 

(6,689,912

)

 

 

(10,069,247

)

 

 

 

5,625,810

 

 

 

11,939,069

 

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(3,704,355

)

 

 

(7,222,140

)

 

 

 

(1,469,736

)

 

 

(2,918,628

)

Change in fair value of tax receivable liability

 

(10,038,458

)

 

 

(10,580,421

)

 

 

 

-

 

 

 

-

 

Other income

 

5,399

 

 

 

44,447

 

 

 

 

19

 

 

 

38

 

Total other (expense) income

 

(13,737,414

)

 

 

(17,758,114

)

 

 

 

(1,469,717

)

 

 

(2,918,590

)

(Loss) income before income tax expense

 

(20,427,326

)

 

 

(27,827,361

)

 

 

 

4,156,093

 

 

 

9,020,479

 

Income tax benefit

 

3,896,626

 

 

 

5,012,218

 

 

 

 

-

 

 

 

 

 

Net (loss) income

$

(16,530,700

)

 

$

(22,815,143

)

 

 

$

4,156,093

 

 

$

9,020,479

 

Less: Net (loss) income attributable to

   non-controlling interests

 

(3,903,059

)

 

 

(6,755,458

)

 

 

 

-

 

 

 

 

 

Net (loss) income attributable to the Company

$

(12,627,641

)

 

$

(16,059,685

)

 

 

$

4,156,093

 

 

$

9,020,479

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per Class A share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.30

)

 

$

(0.40

)

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

41,775,128

 

 

 

39,699,841

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 


3


 

REPAY HOLDINGS CORPORATION

Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Three Months Ended June 30, 2020

 

 

Six Months Ended

June 30, 2020

 

 

 

Three Months Ended June 30, 2019

 

 

Six Months Ended

June 30, 2019

 

 

 

(Successor)

 

 

 

(Predecessor)

 

Net (loss) income

 

$

(16,530,700

)

 

$

(22,815,143

)

 

 

$

4,156,093

 

 

$

9,020,479

 

Other comprehensive loss, before tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of designated cash flow hedges

 

 

(1,393,220

)

 

 

(11,247,984

)

 

 

 

 

 

 

 

Total other comprehensive loss, before tax

 

 

(1,393,220

)

 

 

(11,247,984

)

 

 

 

 

 

 

 

Income tax related to items of other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax benefit on change in fair value of designated cash flow hedges

 

 

236,527

 

 

 

1,551,370

 

 

 

 

 

 

 

 

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

 

 

236,527

 

 

 

1,551,370

 

 

 

 

 

 

 

 

Total other comprehensive loss, net of tax

 

 

(1,156,693

)

 

 

(9,696,614

)

 

 

 

 

 

 

 

Total comprehensive (loss) income

 

$

(17,687,393

)

 

$

(32,511,757

)

 

 

$

4,156,093

 

 

$

9,020,479

 

Less: Comprehensive loss  attributable to

   non-controlling interests

 

 

(4,281,138

)

 

 

(11,345,199

)

 

 

 

 

 

 

 

Comprehensive (loss) income attributable to the Company

 

$

(13,406,255

)

 

$

(21,166,558

)

 

 

$

4,156,093

 

 

$

9,020,479

 

 

 

 

 

 

4


 

REPAY HOLDINGS CORPORATION

Consolidated Statements of Changes in Equity

(Unaudited)

 

 

 

Total Equity

 

 

 

(Predecessor)

 

Balance at December 31, 2018

 

$

109,078,357

 

Net income

 

 

4,864,386

 

Contributions by members

 

 

-

 

Stock based compensation

 

 

127,195

 

Distribution to members

 

 

(151,764

)

Balance at March 31, 2019

 

$

113,918,174

 

Net income

 

 

4,156,093

 

Contributions by members

 

 

-

 

Stock based compensation

 

 

123,588

 

Distribution to members

 

 

(6,753,227

)

Balance at June 30, 2019

 

$

111,444,628

 

 

 

 

 

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, 2019 (Successor)

 

 

37,530,568

 

 

$

3,753

 

 

 

100

 

 

$

-

 

 

$

307,914,346

 

 

$

(53,878,460

)

 

$

313,397

 

 

$

254,353,036

 

 

$

206,162,035

 

Stock-based compensation

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

3,522,731

 

 

 

-

 

 

 

-

 

 

 

3,522,731

 

 

 

-

 

Warrant exercise

 

 

308,051

 

 

 

31

 

 

 

 

 

 

 

-

 

 

 

3,534,157

 

 

 

-

 

 

 

-

 

 

 

3,534,188

 

 

 

-

 

Net loss

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(3,432,044

)

 

 

-

 

 

 

(3,432,044

)

 

 

(2,852,399

)

Accumulated other comprehensive (loss) income

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,643,102

)

 

 

(5,643,102

)

 

 

(4,211,662

)

Balance at March 31, 2020 (Successor)

 

 

37,838,619

 

 

$

3,784

 

 

 

100

 

 

$

-

 

 

$

314,971,234

 

 

$

(57,310,504

)

 

$

(5,329,705

)

 

$

252,334,809

 

 

$

199,097,974

 

Issuance of new shares

 

 

9,200,000

 

 

 

920

 

 

 

 

 

 

 

 

 

 

 

173,991,388

 

 

 

 

 

 

 

 

 

 

 

173,992,308

 

 

 

-

 

Redemption of Post-Merger Repay Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(63,321,690

)

 

 

 

 

 

 

(700,895

)

 

 

(64,022,585

)

 

 

(34,777,415

)

Stock-based compensation

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

5,475,449

 

 

 

-

 

 

 

-

 

 

 

5,475,449

 

 

 

-

 

Warrant exercise

 

 

4,979,711

 

 

 

498

 

 

 

 

 

 

 

-

 

 

 

51,792,829

 

 

 

-

 

 

 

-

 

 

 

51,793,327

 

 

 

-

 

Valuation allowance on Ceiling Rule DTA

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

(8,300,787

)

 

 

-

 

 

 

-

 

 

 

(8,300,787

)

 

 

-

 

Net loss

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(12,627,641

)

 

 

-

 

 

 

(12,627,641

)

 

 

(3,903,059

)

Accumulated other comprehensive (loss) income

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(851,640

)

 

 

(851,640

)

 

 

(572,958

)

Balance at June 30, 2020 (Successor)

 

 

52,018,330

 

 

$

5,202

 

 

 

100

 

 

$

-

 

 

$

474,608,423

 

 

$

(69,938,145

)

 

$

(6,882,240

)

 

$

397,793,240

 

 

$

159,844,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to consolidated financial statements.

 


5


 

REPAY HOLDINGS CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

 

Six Months Ended

June 30, 2020

 

 

 

Six Months Ended

June 30, 2019

 

 

 

(Successor)

 

 

 

(Predecessor)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(22,815,143

)

 

 

$

9,020,479

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income (loss) to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

28,609,982

 

 

 

 

5,889,627

 

Stock based compensation

 

 

8,998,180

 

 

 

 

250,783

 

Amortization of debt issuance costs

 

 

663,294

 

 

 

 

203,702

 

Fair value change in tax receivable agreement liability

 

 

10,580,421

 

 

 

 

-

 

Fair value change in other assets and liabilities

 

 

708,622

 

 

 

 

-

 

Deferred tax expense

 

 

(5,012,717

)

 

 

 

-

 

Change in accounts receivable

 

 

1,213,666

 

 

 

 

(1,040,466

)

Change in related party receivable

 

 

563,084

 

 

 

 

-

 

Change in prepaid expenses and other

 

 

178,443

 

 

 

 

(48,015

)

Change in accounts payable

 

 

486,986

 

 

 

 

(1,207,963

)

Change in related party payable

 

 

(14,467,759

)

 

 

 

-

 

Change in accrued expenses and other