WASHINGTON, DC
FORM
(Mark One)
| ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021
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For the transition period from __________________ to ___________
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TPG PACE HOLDINGS CORP.
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Burr Ridge, Illinois 60527 | ||||||||||
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| Class A-1 Common Stock, par value $.0001 per share | ACEL | The New York Stock Exchange | ||||||
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Emerging growth company | ☒ | |||||||||||||||
At November 1, 2017,
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| and Comprehensive Income (Loss) (Unaudited) for the three and six months ended June 30, 2021 and 2020 |
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| Condensed Consolidated Balance Sheets at June 30, 2021 (Unaudited) and December 31, 2020 |
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Notes to the Condensed Consolidated Financial Statements |
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September 30, 2017 Assets Current assets: Cash $ 1,636,543 Prepaid expenses 165,429 Total current assets 1,801,972 Cash held in Trust Account 450,000,000 Total assets $ 451,801,972 Liabilities and Shareholders' Equity Current liabilities: Accrued offering costs, formation costs and other expenses $ 1,295,110 Total current liabilities 1,295,110 Deferred underwriting compensation 15,750,000 Total liabilities 17,045,110 Commitments and contingencies Class A ordinary shares subject to possible redemption; 42,975,686 shares at September 30, 2017, at a redemption value of $10.00 per share 429,756,860 Shareholders' equity: Preferred shares, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding — Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 2,024,314 shares issued and outstanding (excluding 42,975,686 shares subject to possible redemption) at September 30, 2017 202 Class F ordinary shares, $0.0001 par value; 20,000,000 shares authorized, 11,250,000 shares issued and outstanding 1,125 Additional paid-in capital 5,217,590 Accumulated deficit (218,915 ) Total shareholders' equity 5,000,002 Total liabilities and shareholders' equity $ 451,801,972 For the Period For the Three from February 14, 2017 Months Ended (inception) to September 30, 2017 September 30, 2017 Revenue $ — $ — Formation costs and other expenses 94,400 218,938 Loss from operations (94,400 ) (218,938 ) Interest income — 23 Net loss attributable to ordinary shares $ (94,400 ) $ (218,915 ) Net loss per ordinary share: Basic and diluted $ — $ (0.01 ) Weighted average ordinary shares outstanding: Basic and diluted 56,369,565 29,320,961 Preferred Shares Class A Ordinary Shares Class F Ordinary Shares Additional Accumulated Shareholder's Shares Amount Shares Amount Shares Amount Paid-In Capital Deficit Equity Balance at February 14, 2017 (inception) — $ — — $ — — $ — $ — $ — $ — Sale of Class F ordinary shares to Sponsor on February 22, 2017 at $0.002 per share — — — — 11,500,000 1,150 23,850 — 25,000 Proceeds from initial public offering of Units on June 30, 2017 at $10.00 per Unit — — 45,000,000 4,500 — — 449,995,500 — 450,000,000 Sale of 7,333,333 Private Placement Warrants to Sponsor on June 30, 2017 at $1.50 per Private Placement Warrant — — — — — — 11,000,000 — 11,000,000 Underwriters discount — — — — — — (9,000,000 ) — (9,000,000 ) Deferred offering costs charged to additional paid-in capital — — — — — — (1,299,223 ) — (1,299,223 ) Deferred underwriting compensation — — — — — — (15,750,000 ) — (15,750,000 ) Class F common stock forfeited by Sponsor on August 14, 2017 — — — — (250,000 ) (25 ) 25 — — Class A ordinary shares subject to possible redemption; 42,975,686 shares at a redemption value of $10.00 per share — — (42,975,686 ) (4,298 ) — — (429,752,562 ) — (429,756,860 ) Net loss attributable to ordinary shares — — — — — — — (218,915 ) (218,915 ) Balance at September 30, 2017 — $ — 2,024,314 $ 202 11,250,000 $ 1,125 $ 5,217,590 $ (218,915 ) $ 5,000,002 For the Period from February 14, 2017 (inception) to September 30, 2017 Cash flows from operating activities: Net loss attributable to ordinary shares $ (218,915 ) Changes in operating assets and liabilities: Prepaid expenses (165,429 ) Accrued offering costs, formation costs and other expenses 323,987 Net cash used in operating activities (60,357 ) Cash flows from investing activities: Proceeds deposited into Trust Account (450,000,000 ) Net cash used in investing activities (450,000,000 ) Cash flows from financing activities: Proceeds from sale of Class F ordinary shares to Sponsor 25,000 Proceeds from sale of Units in initial public offering 450,000,000 Proceeds from sale of Private Placement Warrants to Sponsor 11,000,000 Proceeds of notes payable from Sponsor 300,000 Payment of underwriters discounts (9,000,000 ) Payment of accrued offering costs (328,100 ) Repayment of notes payable from Sponsor (300,000 ) Net cash provided by financing activities 451,696,900 Net change in cash 1,636,543 Cash at beginning of period — Cash at end of period $ 1,636,543 Supplemental disclosure of non-cash financing activities: Accrued offering costs $ 971,123 all regions effective January 23, 2021, it is possible that it or the State of Illinois may order a shutdown by region (currently 11 regions), or a complete suspension of video gaming in the state, or institute stay-at-home, closure or other similar orders or measures in the future in response to a resurgence of COVID-19, particularly in light of variant strains of the virus, or other events. If this were to occur, the Company could recognize impairment losses which could be material. presentation and preparation Company's condensed consolidated financial statements. estimates Estimates used by the Company include, among other things, the useful lives for depreciable and amortizable assets, income tax provisions, the evaluation of the future realization of deferred tax assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with business acquisitions, the selection of useful lives for depreciable and amortizable assets in conjunction with business acquisitions, the valuation of level 3 investments, the valuation of contingent earnout shares and warrants, contingencies, and the expected term of share-based compensation awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. On the Credit Agreement. engaging in discovery. The Company is the IGB’s Adopted Rules for Video Gaming. The disciplinary complaint seeks to fine the Company in the amount of $5 million. The Company wrongdoing. The Company has not For the three months ended Factors DEFAULTS UPON SENIOR SECURITIES MINE SAFETY DISCLOSURES Exhibit XBRL Instance Document Brian CarrollItemFinancial StatementsTPG Pace Holdings Corp.(unaudited)(In thousands, except per share amounts) Three Months Ended
June 30,Six Months Ended
June 30,2021 2020 2021 2020 Revenues: (As Restated) (As Restated) Net gaming $ 194,434 $ 0 $ 334,898 $ 101,575 Amusement 4,279 260 8,328 3,091 ATM fees and other revenue 3,261 119 5,817 2,177 Total net revenues 201,974 379 349,043 106,843 Operating expenses: Cost of revenue (exclusive of depreciation and amortization expense shown below) 135,772 530 234,663 71,239 General and administrative 26,113 9,921 50,588 31,896 Depreciation and amortization of property and equipment 6,313 5,071 12,302 9,938 Amortization of route and customer acquisition costs and location contracts acquired 6,162 5,565 12,268 11,130 Other expenses, net 2,687 3,132 4,740 4,336 Total operating expenses 177,047 24,219 314,561 128,539 Operating income (loss) 24,927 (23,840) 34,482 (21,696) Interest expense, net 3,376 2,489 6,720 6,738 Loss (gain) on change in fair value of contingent earnout shares 3,182 7,174 5,979 (10,232) Loss (gain) on change in fair value of warrants 0 18,320 0 (14,283) Income (loss) before income tax expense (benefit) 18,369 (51,823) 21,783 (3,919) Income tax expense (benefit) 5,924 (5,055) 7,837 (5,194) Net income (loss) $ 12,445 $ (46,768) $ 13,946 $ 1,275 Net income (loss) per common share: Basic $ 0.13 $ (0.60) $ 0.15 $ 0.02 Diluted 0.13 (0.60) 0.15 0.01 Weighted average number of shares outstanding: Basic 93,617 78,317 93,452 78,161 Diluted 94,668 78,317 94,382 79,079 Comprehensive income (loss) Net income (loss) 12,445 (46,768) 13,946 1,275 Unrealized gain on investment in convertible notes (net of income taxes of $2,073 and $2,260, respectively) 5,204 0 5,673 0 Comprehensive income (loss) $ 17,649 $ (46,768) $ 19,619 $ 1,275 statements.statements(In thousands, except par value and share amounts) June 30, December 31, 2021 2020 Assets (Unaudited) (As Restated) Current assets: Cash and cash equivalents $ 178,508 $ 134,451 Prepaid expenses 6,087 5,549 Income taxes receivable 0 3,341 Other current assets 11,216 8,643 Total current assets 195,811 151,984 Property and equipment, net 144,688 143,565 Other noncurrent assets: Route and customer acquisition costs, net 15,555 15,251 Location contracts acquired, net 158,051 167,734 Goodwill 45,754 45,754 Investment in convertible notes 38,063 30,129 Deferred income tax asset 0 3,824 Other assets 2,926 2,000 Total other noncurrent assets 260,349 264,692 Total assets $ 600,848 $ 560,241 Liabilities and Stockholders’ Equity Current liabilities: Current maturities of debt $ 18,250 $ 18,250 Current portion of route and customer acquisition costs payable 2,030 1,608 Accrued location gaming expense 2,375 0 Accrued state gaming expense 10,677 0 Accounts payable and other accrued expenses 10,702 23,666 Accrued compensation and related expenses 7,328 5,853 Current portion of consideration payable 6,646 3,013 Total current liabilities 58,008 52,390 Long-term liabilities: Debt, net of current maturities 326,775 321,891 Route and customer acquisition costs payable, less current portion 3,618 4,064 Consideration payable, less current portion 19,102 20,943 Contingent earnout share liability 39,049 33,069 Warrant liability 13 13 Deferred income tax liability 2,367 0 Total long-term liabilities 390,924 379,980 Stockholders’ equity : Preferred Stock, par value of $0.0001; 1,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020 0 0 Class A-1 Common Stock, par value $0.0001; 250,000,000 shares authorized; 93,660,753 shares issued and outstanding at June 30, 2021; 93,379,508 shares issued and outstanding at December 31, 2020 9 9 Additional paid-in capital 183,975 179,549 Accumulated other comprehensive income 5,766 93 Accumulated deficit (37,834) (51,780) Total stockholders' equity 151,916 127,871 Total liabilities and stockholders' equity $ 600,848 $ 560,241 statements.statements(In thousands, except shares) Accumulated Class A-1 Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Income Deficit Equity Balance, January 1, 2021 [as restated] 93,379,508 $ 9 $ 179,549 $ 93 $ (51,780) $ 127,871 Stock-based compensation — — 1,593 — — 1,593 Unrealized gain on investment in convertible notes — — — 469 — 469 Net income — — — — 1,501 1,501 Balance, March 31, 2021 93,379,508 9 181,142 562 (50,279) 131,434 Exercise of common stock options 281,245 — 685 — — 685 Stock-based compensation — — 2,148 — — 2,148 Unrealized gain on investment in convertible notes — — — 5,204 — 5,204 Net income — — — — 12,445 12,445 Balance, June 30, 2021 93,660,753 $ 9 $ 183,975 $ 5,766 $ (37,834) $ 151,916 (In thousands, except shares) Class A-1 Additional Total Common Stock Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Equity (Deficit) Balance, January 1, 2020 [as restated] 76,637,470 $ 8 $ 8,352 $ (51,370) $ (43,010) Conversion of Class A-2 Common Stock to Class A-1 Common Stock 1,596,636 — 19,160 — 19,160 Stock-based compensation — — 1,060 — 1,060 Net income [as restated] — — — 48,043 48,043 Balance, March 31, 2020 [as restated] 78,234,106 8 28,572 (3,327) 25,253 Exercise of common stock options 148,299 — 359 — 359 Stock-based compensation — — 1,327 — 1,327 Net loss [as restated] — — — (46,768) (46,768) Balance, June 30, 2020 [as restated] 78,382,405 $ 8 $ 30,258 $ (50,095) $ (19,829) statements.statementsACCEL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands) Six Months Ended
June 30,2021 2020 Cash flows from operating activities: (As Restated) Net income $ 13,946 $ 1,275 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization of property and equipment 12,302 9,938 Amortization of route and customer acquisition costs and location contracts acquired 12,268 11,130 Amortization of debt issuance costs 1,009 936 Loss (gain) on change in fair value of contingent earnout shares 5,979 (10,232) Gain on change in fair value of warrants 0 (14,283) Stock-based compensation 3,741 2,387 Loss on disposal of property and equipment 372 93 Net loss on write-off of route and customer acquisition costs and route and customer acquisition costs payable 162 611 Remeasurement of contingent consideration 1,766 (2,432) Payments on consideration payable (293) (1,548) Accretion of interest on route and customer acquisition costs payable, contingent consideration, and contingent stock consideration 1,252 1,078 Deferred income taxes 3,930 (5,195) Changes in operating assets and liabilities: Prepaid expenses and other current assets (3,111) 1,105 Income taxes receivable 3,341 0 Route and customer acquisition costs (1,393) (585) Route and customer acquisition costs payable (154) (69) Accounts payable and accrued expenses (2,509) (10,927) Accrued compensation and related expenses 1,475 (392) Other assets 75 (174) Net cash provided by (used in) operating activities 54,158 (17,284) Cash flows from investing activities: Purchases of property and equipment (10,938) (4,123) Proceeds from the sale of property and equipment 414 121 Business and asset acquisitions, net of cash acquired (3,234) 0 Net cash used in investing activities (13,758) (4,002) Cash flows from financing activities: Payments on term loan (6,000) (6,000) Proceeds from delayed draw term loans 0 65,000 Payments on delayed draw term loans (3,125) (2,313) Proceeds from line of credit 42,000 49,000 Payments on line of credit (29,000) (57,000) Payments for debt issuance costs 0 (325) Proceeds from exercise of stock options and warrants 685 359 Payments on consideration payable (903) (4,004) Net cash provided by financing activities 3,657 44,717 Net increase in cash and cash equivalents 44,057 23,431 Cash and cash equivalents: Beginning of period 134,451 125,403 End of period $ 178,508 $ 148,834 ACCEL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(Unaudited)Supplemental disclosures of cash flow information: Cash payments for: Interest, net of amount of capitalized $ 6,049 $ 6,678 Income taxes $ 651 $ 0 Supplemental schedules of noncash investing and financing activities: Purchases of property and equipment in accounts payable and accrued liabilities $ 2,608 $ 10,586 Conversion of contingent earnout shares $ 0 $ 19,160 Acquisition of businesses and assets: Total identifiable net assets acquired $ 3,334 $ 0 Less consideration payable (100) 0 Cash purchase price $ 3,234 $ 0 statements.statementsTPG Pace Holdings Corp.Condensed Financial Statements(unaudited)1. Organizationinstall and Business OperationsOrganizationoperate video gaming terminals GeneralTPG Pace Holdings Corp. (the “Company”) was incorporatedamusement equipment at certain locations. The Illinois terminal operator license, which is not transferable or assignable, requires compliance with applicable regulations and the license is renewable annually unless sooner cancelled or terminated. Cayman Islands exempted company on February 14, 2017 (“Inception”)licensed operator, or Master Licensee, which allows the Company to install and operate coin operated amusement machines for commercial use by the public for play throughout the State of Georgia. The Company was formed foralso holds a license from the purposePennsylvania Gaming Control Board. The Company is subject to various federal, state and local laws and regulations in addition to gaming regulations.effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Illinois as of June 30, 2021 and 2020, respectively.“emergingemerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by(“EGC”) under the Jumpstart Our Business Startups Act of 2012 (the “JOBS(“JOBS Act”). The Company’s sponsor is TPG Pace II Sponsor, LLC, following the consummation of a Cayman Islands limited liability company (the “Sponsor”), which is an affiliate of TPG Global, LLC.All activity for the period from Inception to September 30, 2017 relates to the Company’s formation and the initial public offering of units, each consisting of one of the Company’s Class A ordinary shares and one-third of one warrant to purchase one Class A ordinary share (the “Public Offering”), and the identification and evaluation of prospective acquisition targets for a Business Combination. The Company will not generate operating revenues prior to the completion of the Business Combination and will generate non-operating income in the form of interest incomereverse recapitalization that occurred on Permitted Investments (as defined below) from the proceeds derived from the Public Offering.November 20, 2019. The Company has selectedelected to use this extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company expects to remain an EGC until December 31st as its fiscal year end.FinancingThe registration statement for31, 2022.Company’s Public Offering was declared effective byCondensed Consolidated Financial StatementsUnited States SecuritiesCOVID-19 outbreak, the IGB made the decision to shut down all VGTs across the State of Illinois starting at 9:00 p.m. on March 16, 2020 and Exchange Commission (the “SEC”) on June 27, 2017. The Public Offering closed onultimately extended the shutdown through June 30, 2017 (the “Close Date”). The Sponsor purchased an aggregate2020. This temporary shutdown of 7,333,333 warrants at a purchase price of $1.50 per warrant, or $11,000,000 in the aggregate, in a private placement on the Close Date (the “Private Placement”). The warrants are included in additional paid-in capital at the balance sheet.The Company intends to finance a Business Combination with proceeds from its $450,000,000 Public Offering (see Note 3) and $11,000,000 Private Placement (see Note 4). At the Close Date, proceeds of $450,000,000, net of underwriting discounts of $9,000,000 and funds designated for operational use of $2,000,000, were deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as described below.The Trust AccountPrior to January 2018, funds held in the Trust Account will not be invested and will be held in a non-interest bearing account. Beginning January 2018, funds held in the Trust Account will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations (collectively, “Permitted Investments”).Funds will remain in the Trust Account except for the withdrawal of interest earned on the funds that may be released to the Company to fund working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes. The proceeds from the Public Offering will not be released from the Trust Account until the earliest of (i) the completion of the Business Combination, (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the amended and restated memorandum and articles of association to modify the substance and timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the Business Combination within 24 months from the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date and (iii) the redemption ofIllinois video gaming impacted all of the Company’s public shares if it is unable to completegaming days during the Business Combination within 24three months from the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 monthsended June 30, 2020, and 106 of the Close Date, subject to applicable law.Of182 gaming days (or 58% of gaming days) during the remaining proceedssix months ended June 30, 2020. As a resurgence of $2,000,000 held outsideCOVID-19 occurred in the Trust Account, $300,000 was used to repayfall of 2020, the loan fromvirus spread exponentially in every geographical region (currently 11 regions) in the Sponsor, withState of Illinois. In response, the remainder available to pay offering costs, business, legal and accounting due diligenceIGB suspended all video gaming operations across the entire state of Illinois starting at 11:01 PM on prospective acquisitions, listing fees and continuing general and administrative expenses.The Company’s management has broad discretion with respect to the specific applicationThursday November 19, 2020. Video gaming operations resumed in certain regions of the net proceedsstate beginning on January 16, 2021, and fully resumed in all regions on January 23, 2021. Even though video gaming operations resumed across all regions, certain regions still had government-imposed restrictions that, among other things, limited hours of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein, the target business must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissionsoperation and taxes payable on interest earned on the Trust Account) at the time of the Company signing a definitive agreement.After signing a definitive agreement for a Business Combination, the Company will provide the public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares either (i) in connection with a shareholder meeting to approve the Business Combination or (ii) by means of a tender offer. Each public shareholder may elect to redeem their shares irrespective of whether they vote for or against the Business Combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, divided byrestricted the number of then outstanding public shares, subject topatrons allowed within the limitations described herein. The amountlicensed establishments. Given the staggered reopening by region in January of 2021, the Trust Account is initially anticipated to be approximately $10.00 per public share. The per-share amounttemporary shutdown impacted, on average, 18 of the 181 gaming days (or 10% of gaming days) during the six months ended June 30, 2021. In light of these events and their effect on the Company’s employees and licensed establishment partners, the Company will distributetook action to investors who properly redeem their shares will not be reducedhelp mitigate the potential effects caused by any deferred underwriting commissions payable to underwriters. The decision as to whetherthe temporary cessation of operations. During the initial shutdown in 2020, the Company will seek shareholder approvalfurloughed a significant portion of its employees and deferred certain payments to major vendors. Additionally, members of the Business Combination or will allow shareholdersCompany's senior management decided to sellvoluntarily forgo their sharesbase salaries until the resumption of video gaming operations. Beginning in a tender offer will be made byearly June 2020, the Company solelystarted reinstating employees from furlough in its discretion, and will be basedanticipation of resuming operations on a variety of factors such asJuly 1, 2020. During the timing of the transaction and whether the terms of the transaction would otherwise requiresecond shutdown starting in November 2020, the Company furloughed idle staff as appropriate and deferred certain payments to seek shareholder approval under the law or stock exchange listing requirements. If the Company seeks shareholder approval, it will complete its Business Combination only if a majoritymajor vendors.be less than $5,000,001, after payment of the deferred underwriting commission. In such an instance, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.The Company has 24 months from the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date, to complete its Business Combination. If the Company does not complete a Business Combination within this period, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay its taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The Company’s Sponsor and four independent directors (collectively, “Initial Shareholders”) and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares (as defined in Note 4) if the Company fails to complete the Business Combination within 24 months from the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date. However, if the initial shareholders acquire public shares after the Close Date, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete the Business Combination within the allotted 24-month time period, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date.The underwriters have agreed to waive their rights to any deferred underwriting commission held in the Trust Account in the event the Company does not complete the Business Combination and those amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s public shares.If the Company fails to complete the Business Combination, the redemption of the Company’s public shares will reduce the book value of the shares held by the Initial Shareholders, who will be the only remaining shareholders after such redemptions.If the Company holds a shareholder vote or there is a tender offer for shares in connection with a Business Combination, a public shareholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, includinginterest earned on the funds held in the Trust Account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes. such ordinary shares are recorded at their redemption amountof these developments, the Company's revenues, results of operations and classified as temporary equitycash flows have been materially affected. The situation is changing and additional impacts from COVID-19 and its variant strains on the balance sheet,business and financial results may arise that the Company is not aware of currently and cannot reasonably anticipate.accordance with ASC 480, “Distinguishing Liabilities from Equity.”Presentationaccompanying unaudited interim condensed consolidated financial statements have beenand accompanying notes were prepared in accordanceconformity with U.S. generally accepted accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC,Securities and reflect all adjustments, consisting onlyExchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of normal recurring adjustments, which are,the Company and of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, at September 30, 2017 and the results of operations and cash flows for the dates and periods presented. Certain informationThese condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and disclosures normallythe related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as amended (the “Form 10-K”). In preparing our condensed consolidated financial statements, preparedwe applied the same significant accounting policies as described in accordance with U.S. GAAP have been omitted pursuantNote 3 to such rules and regulations.the consolidated financial statements in the Form 10-K. Any significant changes to those accounting policies are discussed below. Interim results are not necessarily indicative of results for a full year.full year or any future periods. The accompanying unaudited interim condensed consolidated financial statements should be readfor the periods ended June 30, 2020 and for the year ended December 31, 2020 in conjunction withits previously filed Form 10-K. Please see Note 2 to the auditedconsolidated financial statements and notes thereto included in the final Prospectus dated June 27, 2017 filedForm 10-K for the facts and circumstance on the restatements.withearly adopted the SEC and the audited balance sheet and notes thereto includednew standard in the Current Reportsecond quarter of 2020 (effective January 1, 2020) on Form 8-K dated June 30, 2017 filed by the Company with the SEC.Emerging Growth CompanySection 102(b)(1)a prospective basis. The adoption of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or dostandard did not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.CashCash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents at September 30, 2017.Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.Financial InstrumentsThe fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet due to their short-term nature.Fair Value MeasurementASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.The three levels of the fair value hierarchy under ASC 820 are as follows:Level I—Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.Level II—Pricing inputs are other than quoted prices included within Level I that are observable for the investment, either directly or indirectly. Level II pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.Level III—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation.In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined basedmaterial impact on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.Redeemable Ordinary SharesAll 45,000,000 Class A ordinary shares sold as part of the Units in the Public Offering contain a redemption feature as discussed above. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Class A ordinary shares in an amount that would cause its net tangible assets, or total shareholders’ equity, to fall below $5,000,001. Accordingly, at September 30, 2017, 42,975,686 of the Company’s 45,000,000 Class A ordinary shares were classified outside of permanent equity at their redemption value.Estimatesin conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, and(ii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Offering Costscomplies withoperates as a single operating segment. The Company’s chief operating decision maker (“CODM”) is the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A “Expenses of Offering”. The Company incurred offering costs of $1,299,223 in connection withchief executive officer, who has ultimate responsibility for the Public Offering. These costs, together with the underwriter discount and Deferred Discount, totaling $24,750,000, were charged to additional paid-in capital upon completion of the Public Offering.Net Loss per Ordinary ShareThe Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period as calculated using the treasury stock method. At September 30, 2017, the Company had outstanding warrants to purchase up to 22,333,333 Class A ordinary shares. The weighted average of these shares was excluded from the calculation of diluted net loss per ordinary share since the exercise of the warrants is contingent upon the occurrence of future events. At September 30, 2017, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earningsoperating performance of the Company underand the treasury stock method. As a result, diluted net loss per ordinary shareallocation of resources. The CODM assesses the Company’s performance and allocates resources based on consolidated results, and this is the sameonly discrete financial information that is regularly reviewed by the CODM.basic net loss per ordinary shareeither finance or operating, with classification affecting the pattern of expense recognition in the income statement. Based on its EGC status, the Company expects the new standard will be effective for the period.Income TaxesUnder ASC 740, “Income Taxes,” deferred tax assetsCompany's fiscal year beginning after December 15, 2021liabilities are recognized foroperating leases existing at, or entered into after, the future tax consequences attributable to temporary differences betweenbeginning of the earliest comparative period presented in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized.ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2017.statements, with certain practical expedients available. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.There is currently no taxation imposed on income by the Governmentassessing impact of the Cayman Islands. In accordance with federal income tax regulations, income taxesstandard on its condensed consolidated financial statements.levied on the Company, but rather on the individual owners.Recent Accounting PronouncementsManagement doesexpected to have, or did not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have, a material effect on the Company’sits condensed consolidated financial statements.Public OfferingIn its Public Offering, the Company sold 45,000,000 units at a price of $10.00 per unit. Each unit consists of one Class A ordinary share of the Company at $0.0001 par value and one-third of one warrant (a “Unit”). Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share (a “Warrant”). Only whole Warrants may be exercised and no fractional Warrants will be issued upon separation of the Units and only whole Warrants may be traded. The Warrants will become exercisable on the later of 30 days after the completion of the Business Combination or 12 months from the Close Date, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Alternatively, if the Company does not complete a Business Combination within 24 months after the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreementInvestment in principle or definitive agreement for an initial business combination within 24 months of the Close Date, the Warrants will expire at the end of such period. If the Company is unable to deliver registered Class A ordinary shares to the holder upon exercise of Warrants issued in connection with the 45,000,000 Units during the exercise period, the Warrants will expire worthless, except to the extent that they may be exercised on a cashless basis in the circumstances described in the agreement governing the Warrants.Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole, but not in part, at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, and only in the event that the last sale price of the Company’s public shares equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders. Additionally, 90 days after the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole, but not in part, for Class A ordinary shares at a price based on the redemption date and “fair market value” of the Company’s Class A ordinary shares upon a minimum of 30 days’ prior written notice of redemption, and only in the event that the last sale price of the Company’s Class A ordinary shares equals or exceeds $10.00 per share on the trade date prior to the date on which the Company sends the notice of redemption to the Warrant holders. The “fair market value” of the Company’s Class A ordinary shares shall mean the average reported last sale price of the Company’s Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the Warrant holders. The Company has agreed to use its best efforts to file a registration statement for the Class A ordinary shares issuable upon exercise of the Warrants under the Securities Act as soon as practicable, but in no event later than 15 business days following the completion of a Business Combination.The Company paid an underwriting discount of 2.00% of the gross proceeds of the Public Offering, or $9,000,000, to the underwriters at the Close Date, with an additional fee (the “Deferred Discount”) of 3.50% of the gross proceeds of the Public Offering, or $15,750,000, payable upon the Company’s completion of a Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes a Business Combination. The underwriters are not entitled to receive any of the interest earned on Trust Account funds that would be used to pay the Deferred Discount. The Deferred Discount has been recorded as a deferred liability on the balance sheet at September 30, 2017 as management has deemed the consummation of a Business Combination to be probable.Founder SharesFebruary 22, 2017, the Sponsor purchased an aggregate of 11,500,000 Company’s Class F ordinary shares (the “Founder Shares”) for an aggregate purchase price of $25,000, or approximately $0.002 per share. Prior to the Sponsor’s initial investment in the Company of $25,000, the Company had no assets. The purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the number of Founder Shares issued by the Company.On JuneJuly 19, 2017, the Sponsor transferred 40,000 Founder Shares to each of the Company’s five independent directors at their original purchase price. On August 14, 2017, the Sponsor forfeited 250,000 Founder Shares on the expiration of the underwriters’ over-allotment option. At September 30, 2017, the Sponsor and the Company’s five independent directors (the “Initial Shareholders”) held, collectively, 11,250,000 Founder Shares.The Founder Shares are identical to the Class A ordinary shares included in the Units sold in the Public Offering except that:only holders of the Founder Shares have the right to vote on the election of directors prior to the Business Combinationthe Founder Shares are subject to certain transfer restrictions, as described in more detail below;the Initial Shareholders and the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the Business Combination within 24 months from the Close Date. If the Company submits the Business Combination to the public shareholders for a vote, the Initial Shareholders have agreed, pursuant to such letter agreement, to vote their Founder Shares and any public shares purchased during or after the Public Offering in favor of the Business Combination; andthe Founder Shares are automatically convertible into Class A ordinary shares at the time of the Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights.Additionally, the Initial Shareholders agree not to transfer, assign or sell any of their respective Founder Shares until the earlier of (i) one year after the completion of the Business Combination or (ii) subsequent to the Business Combination, if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination and (iii) the date following the completion of the Business Combination on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property (the “Lock Up Period”).Private Placement WarrantsOn the Close Date, the Sponsor purchased from the Company an aggregate of 7,333,333 private placement warrants at a price of $1.50 per warrant, or approximately $11,000,000, in a private placement that occurred in conjunction with the completion of the Public Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. A portion of the purchase price of the Private Placement Warrants was placed in the Trust Account. The Private Placement Warrants will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Warrants. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. The Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination.If the Company does not complete the Business Combination within 24 months from the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.Holders of the Founder Shares and Private Placement Warrants are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Public Offering. The holders of these securities are entitled to make up to three demands that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to other registration statements filed by the Company subsequent to its completion of the Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that that Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock Up Period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.IndemnityThe Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to fund the Company’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such eventuality as the Company believes the likelihood of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.Related Party Note PayableBetween Inception and the Close Date, the Company’s Sponsor loaned the Company $300,000 in unsecured promissory notes. The funds were used to pay up front expenses associated with the Public Offering. These notes were non-interest bearing and were repaid in full to the Sponsor at the Close Date.Administrative Services AgreementOn June 30, 2017,2019, the Company entered into an agreement to pay $20,000 a month for office space, administrative and support servicespurchase up to an affiliate$30.0 million in convertible promissory notes from another terminal operator that bear interest at 3% per annum. The Company has the option of converting the notes to common stock of the Sponsor,terminal operator prior to the maturity date. At closing, the Company purchased a $5.0 million convertible promissory note which is subordinated to the terminal operator’s credit facility and will terminatematures six months following the satisfaction of administrative conditions.uponto purchase the earlier of a Business Combination orconvertible promissory notes. The Second Amendment, among other things, extends the liquidationDecember 31, 2020 maturity and conversion feature of the Company. For both$5.0 million convertible promissory note to December 31, 2021, the maturity and conversion feature of the $25.0 million convertible promissory note to June 1, 2024 and the beginning of the payback period for the $25.0 million convertible promissory note from December 31, 2020 to January 1, 2022.SeptemberJune 30, 20172021, respectively. For more information on how the Company determined the fair value of the convertible promissory notes, see Note 12.June 30,
2021December 31,
2020Gaming terminals and equipment $ 207,162 $ 197,533 Amusement and other equipment 23,858 23,049 Office equipment and furniture 1,610 1,526 Computer equipment and software 13,202 12,793 Leasehold improvements 2,970 1,707 Vehicles 10,811 9,430 Buildings and improvements 10,948 10,845 Land 911 911 Construction in progress 1,514 1,886 Total property and equipment 272,986 259,680 Less accumulated depreciation and amortization (128,298) (116,115) Property and equipment, net $ 144,688 $ 143,565 June 30,
2021December 31,
2020Cost $ 28,223 $ 27,364 Accumulated amortization (12,668) (12,113) Route and customer acquisition costs, net $ 15,555 $ 15,251 June 30,
2021December 31,
2020Cost $ 227,670 $ 226,012 Accumulated amortization (69,619) (58,278) Location contracts acquired, net $ 158,051 $ 167,734 June 30,
2021December 31,
20202019 Senior Secured Credit Facility: Revolving credit facility $ 13,000 $ 0 Term Loan 222,000 228,000 Delayed Draw Term Loan (DDTL) 116,437 119,562 Total debt 351,437 347,562 Less: Debt issuance costs (6,412) (7,421) Total debt, net of debt issuance costs 345,025 340,141 Less: Current maturities (18,250) (18,250) Total debt, net of current maturities $ 326,775 $ 321,891 period from Inception to September 30, 2017,temporary shutdown of its operations by the IGB, the Company incurred expensesborrowed $65 million on its delayed draw term loan in March 2020 to increase its cash position and help preserve its financial flexibility.$60,000June 30, 2021, there remained approximately $87.0 million of availability under this agreement.Private Aircraft Travelreimburses affiliates for reasonable travel related expenses incurred while conducting business on behalfand its wholly-owned domestic subsidiaries (collectively, the “Guarantors”), subject to certain exceptions. The obligations under the Credit Agreement are secured by substantially all of assets of the Guarantors, subject to certain exceptions. Certain future-formed or acquired wholly-owned domestic subsidiaries of the Company includingwill also be required to guarantee the useCredit Agreement and grant a security interest in substantially all of private aircraft.their assets, subject to certain exceptions, to secure the obligations under the Credit Agreement.did not incur any private aircraft expenses foris required to pay a commitment fee quarterly in arrears in respect of unused commitments under the three months ended September 30, 2017. Duringrevolving credit facility and the period from Inception to September 30, 2017, travel related reimbursements for private aircraft use were $49,285. Private aircraft servicesadditional term loan facility.provided by independent third parties, coordinated by an affiliatecalculated based upon the first lien net leverage ratio of the Company and billed toits restricted subsidiaries on a consolidated basis, as defined in the CompanyCredit Agreement. The revolving loans and term loans bear interest at cost.5. Cash Held in Trust AccountGross proceedseither (a) ABR (150 bps floor) plus a margin of $450,000,000 and $11,000,000 from1.75% or (b) LIBOR (50 bps floor) plus a margin of 2.75% , at the Public Offeringoption of the Company.saleterm loans mature on November 13, 2024.the Private Placement Warrants, respectively, less underwriting discounts of $9,000,000; and funds of $2,000,000 designated to pay the Company’s accrued formation and offering costs, ongoing administrative and acquisition search costs, plus repay notes payable of $300,000 to the Sponsor at the Close Date were placed in the Trust Account at the Close Date. At September 30, 2017, the balance of funds held in the Trust Account was $450,000,000.6. Deferred Underwriting CompensationThe Company is committed to pay the Deferred Discount of 3.50% of the gross proceeds of the Public Offering, or $15,750,000, to the underwriters upon the Company’s completion of a Business Combination. The underwriters are not entitled to receive any of the interest earned on Trust Account funds that would be used to pay the Deferred Discount, and no Deferred Discount is payable to the underwriters if a Business Combination is not completed within 24 months after the Close Date, or 27 months from the Close Date if the Company has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date.7. Shareholders’ EquityClass A Ordinary SharesThe Company is currently authorized to issue 200,000,000 Class A ordinary shares. Depending on the terms of a potential Business Combination,certain non-ordinary course asset sales, the Company may be required to increaseapply the numbernet cash proceeds thereof to prepay outstanding term loans and additional term loans. The loans under the Credit Agreement may be prepaid without premium or penalty, subject to customary LIBOR “breakage” costs.authorized Class A ordinary shares at the same time as its shareholders vote on the Business Combination to the extentdefault, and requires the Company seeks shareholder approvaland certain of its affiliates obligated under the Credit Agreement to make customary representations and warranties in connection with credit extensions thereunder.Combination. Holdersand Asset AcquisitionsThree months ended Six months ended June 30, 2020 June 30, 2020 Revenues $ 691 $ 111,301 Net (loss) income (47,207) 1,886 June 30, 2021 December 31, 2020 Current Long-Term Current Long-Term TAV $ 490 $ 2,992 $ 490 $ 3,206 Fair Share Gaming 1,408 809 1,096 523 Family Amusement 198 2,564 391 2,609 Skyhigh 711 5,881 601 5,789 G3 469 23 355 100 Grand River 0 6,101 0 5,755 IGS 80 0 80 0 Island 100 0 0 0 Tom's Amusements 741 732 0 1,455 AVG 2,449 0 0 1,506 Total $ 6,646 $ 19,102 $ 3,013 $ 20,943 A ordinaryA-2 Common Stock. The holders of the Class A-2 Common Stock do not have voting rights and are not entitled to receive or participate in any dividends or distributions when and if declared from time to time. The Company concluded that the Class A-2 Common Stock should be reflected as a contingent earnout share liability due to the fact that such shares are not entitled to dividends, voting rights, or a stake in the Company in the case of liquidation.Fair Value Measurement at Reporting Date Using June 30, 2021 Quoted Prices in Active Markets for Identical Assets
(Level 1)Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Investment in convertible notes $ 38,063 $ 0 $ 0 $ 38,063 Fair Value Measurement at Reporting Date Using December 31, 2020 Quoted Prices in Active Markets for Identical Assets
(Level 1)Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Investment in convertible notes $ 30,129 $ 0 $ 0 $ 30,129 Fair Value Measurement at Reporting Date Using June 30, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 19,504 $ 0 $ 0 $ 19,504 Contingent earnout shares 39,049 0 39,049 0 Warrants 13 0 13 0 Total $ 58,566 $ 0 $ 39,062 $ 19,504 Fair Value Measurement at Reporting Date Using December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 17,260 $ 0 $ 0 $ 17,260 Contingent earnout shares 33,069 0 33,069 0 Warrants 13 0 13 0 Total $ 50,342 $ 0 $ 33,082 $ 17,260 share with the exception that onlyshare. The holders of Class FA-1 Common Stock are entitled to receive dividends or other distributions when and if declared from time to time and share equally on a per share basis in such dividends and distributions.sharescourse of business, including related to employee matters, employment of professionals and non-compete clauses and agreements. Other than settled matters explained as follows, these actions are in various stages, and no judgments or decisions have been rendered. Management, after reviewing matters with legal counsel, believes that the outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations.voteoperate VGTs in those establishments. Separately, on August 24, 2012, Action Gaming sold and assigned its rights to all its location agreements to J&J, including its exclusive rights with the Defendant Establishments (the “J&J Assigned Agreements”). At the time of the assignment of such rights to J&J, the Defendant Establishments were not yet licensed by the Illinois Gaming Board (“IGB”).electionvalidity of directors priorthe J&J Assigned Agreements.completion ofCompany obtaining new locations.Business Combination, subject to adjustment as providedlawsuit in the Circuit Court of Cook County against Jason Rowell and other parties related to Mr. Rowell’s breaches of his non-compete agreement with the Company. The Company alleged that Mr. Rowell and a competitor were working together to interfere with the Company’s amendedcustomer relationships. On November 7, 2019, Mr. Rowell filed a lawsuit in the Circuit Court of Cook County against the Company alleging that he had not received certain equity interests in the Company to which he was allegedly entitled under his agreement. The Company has answered the complaint and restated memorandumasserted a counterclaim, and articlesintends to defend itself against the allegations. Mr. Rowell's claims and the Company's claims are both being litigated in this lawsuit, while the original lawsuit remains pending against the other defendants. The Company does not have a present estimate regarding the potential damages, nor does it believe any payment of association. At September 30, 2017, there were 45,000,000 Class A ordinary shares issueddamages is probable, and, outstanding,accordingly, has established no reserves relating to these matters.which 42,975,686 shares were subject to possible redemptionthe Company violated his non-competition agreement with Illinois Gaming Investors, LLC, and together with the Company, wrongfully solicited prohibited licensed video gaming locations. The lawsuit on its face seeks damages of $10.0 million. The parties are classified outside of shareholders’ equity at the balance sheet.Class F Ordinary Sharescurrently authorizedin the process of defending this lawsuit, and has not accrued any amounts as losses related to issue 20,000,000 Class F ordinary shares. At September 30, 2017, there were 11,250,000 Class F ordinary shares (Founder Shares) issuedthis suit are not probable or reasonably estimable.outstanding.Preferred Sharesis authorized to issue 1,000,000 preferred shares. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicablefiled its initial answer to the sharesIGB’s complaint on January 11, 2021 and have begun the administrative hearing process. The Company intends to vigorously defend itself against the allegations in the complaint and denies any allegations of each series. The board of directors will be able to, without stockholder approval, issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At September 30, 2017, there were no preferred shares issued or outstanding.Dividend Policypaidaccrued any amounts related to this complaint as losses are not probable or reasonably estimable.does not intendSubsidiariespay any cash dividends on its ordinary shares priorCondensed Consolidated Financial Statements — (Continued)completionCompany's acquisition of certain assets of Fair Share Gaming, LLC (“Fair Share”), G3 Gaming, LLC (“G3”), Tom's Amusements and AVG, the sellers became employees of the Business Combination. Additionally, the Company’s board of directors does not contemplate or anticipate declaring any stock dividends in the foreseeable future.8. Subsequent EventsManagement has performed an evaluation of subsequent events through November 8, 2017, the date the unaudited interim condensed financial statements were issued, noting no subsequent events which require adjustment or disclosure.Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.ReferencesCompany. Consideration payable to the “Company,” “our,” “us” or “we” referFair Share seller was $2.2 million and $1.6 million as of June 30, 2021 and December 31, 2020, respectively. Payments to TPG Pace Holdings Corp. the Fair Share seller under the acquisition agreement were $0.3 million and $0.2 million during the six months ended June 30, 2021 and 2020, respectively. Consideration payable to the G3 sellers was $0.5 million as of both June 30, 2021 and December 31, 2020. Payments to the G3 sellers under the acquisition agreement were $2.5 million during the six months ended June 30, 2020. There were 0 payments to the G3 sellers during the six months ended June 30, 2021. Consideration payable to the Tom's Amusements seller was $1.5 million as of both June 30, 2021 and December 31, 2020. There were 0 payments to the Tom's Amusements seller during the six months ended June 30, 2021. Consideration payable to the AVG seller was $2.4 million and $1.5 million as of June 30, 2021 and December 31, 2020, respectively. There were 0 payments to the AVG seller during the six months ended June 30, 2021.Three Months Ended June 30, Six Months Ended
June 30,2021 2020 2021 2020 (As Restated) (As Restated) Net income (loss) $ 12,445 $ (46,768) $ 13,946 $ 1,275 Less: Net income applicable to contingently issuable shares 0 0 — 798 Net income (loss) on which diluted earnings (loss) per share is calculated $ 12,445 $ (46,768) $ 13,946 $ 477 Basic weighted average outstanding shares of common stock 93,617 78,317 93,452 78,161 Dilutive effect of stock-based awards for common stock 1,051 0 930 804 Dilutive effect of contingent earnout shares before conversion 0 0 0 114 Diluted weighted average outstanding shares of common stock 94,668 78,317 94,382 79,079 Earnings (loss) per share: Basic $ 0.13 $ (0.60) $ 0.15 $ 0.02 Diluted $ 0.13 $ (0.60) $ 0.15 $ 0.01 the Company’sour financial condition and results of operations should be read in conjunction with theour unaudited condensed consolidated financial statements and the related notes thereto contained elsewhereand other financial information included in this Quarterly Report on Form 10-Q. Certain information contained in theThis discussion and analysis set forth below includescontains forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsAll statements other than statements of historical fact Our actual results could differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in this Quarterlyour Annual Report on Form 10-Q including, without limitation, statements under this10-K for the year ended December 31, 2020, as amended (the “Form 10-K”). This discussion and analysis should also be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” regardingOperations”, set forth in our Form 10-K.Company’s financial position,United States on an Adjusted EBITDA basis, and a preferred partner for local business strategyowners in the Illinois market. Our business consists of the installation, maintenance and the plansoperation of video gaming terminals (“VGTs”), redemption devices that disburse winnings and objectives of management for future operations, are forward-looking statements. When usedcontain automated teller machine (“ATM”) functionality, and other amusement devices in this Quarterly Report on Form 10-Q, wordsauthorized non-casino locations such as “anticipate,restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores, which are referred to collectively as “licensed establishments.” “believe,” “estimate,” “expect,” “intend”We also operate stand-alone ATMs in gaming and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplatednon-gaming locations. Accel has been licensed by the forward-looking statementsIllinois Gaming Board (“IGB”) since 2012 and holds a license from the Pennsylvania Gaming Control Board. In July 2020, the Georgia Lottery Corporation approved one of our consolidated subsidiaries as a Master Licensee, which allows us to install and operate coin operated amusement machines for commercial use by the public for play throughout the State of Georgia. We operate 13,177 video gaming terminals across 2,527 locations in the State of Illinois as of June 30, 2021.certainsupply chain and production disruptions, workforce restrictions, travel restrictions, reduced consumer spending and sentiment, amongst other factors, detailedwhich are, individually or in our filings withthe aggregate, negatively affecting the financial performance, liquidity and cash flow projections of many companies in the United States Securities and Exchange Commission (“SEC”). All subsequent written or oral forward-looking statements attributableabroad.or persons actingto help mitigate the effects of the temporary cessation of operations by, among other things, furloughing approximately 90% of our employees and deferring certain payments to major vendors. Additionally, members of our senior management decided to voluntarily forgo their base salaries until the resumption of video gaming operations. Beginning in early June, we started reinstating employees from furlough in order to properly resume operations.Company’s behalf are qualified in their entirety by this paragraph.OverviewWe are a blank check company incorporated as a Cayman Islands exempted company on February 14, 2017 (“Inception”)business and formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more target businesses (“Business Combination”). We have reviewed, and continue to review, a number of opportunities to enter into a Business Combination with an operating business, butfinancial results may arise that we are not ableaware of currently and cannot reasonably anticipate.determine at this time whether we will complete a Business Combination with anyresurgence of COVID-19, particularly in light of variant strains of the target businessesvirus, or other events. Under the guidelines provided by the Illinois Department of Health and Governor’s office, the IGB has been closely monitoring Illinois' COVID-19 related statistics including the positivity rate, hospital admissions, and hospital bed availability in each region. We will continue to monitor the situation and its potential impact on our operations.(in thousands, except %'s) Three Months Ended
June 30,Increase / (Decrease) 2021 2020 Change ($) Change (%) Revenues: (As Restated) Net gaming $ 194,434 $ — $ 194,434 N/A Amusement 4,279 260 4,019 1,545.8 % ATM fees and other revenue 3,261 119 3,142 2,640.3 % Total net revenues 201,974 379 201,595 53,191.3 % Operating expenses: Cost of revenue (exclusive of depreciation and amortization expense shown below) 135,772 530 135,242 25,517.4 % General and administrative 26,113 9,921 16,192 163.2 % Depreciation and amortization of property and equipment 6,313 5,071 1,242 24.5 % Amortization of route and customer acquisition costs and location contracts acquired 6,162 5,565 597 10.7 % Other expenses, net 2,687 3,132 (445) (14.2) % Total operating expenses 177,047 24,219 152,828 631.0 % Operating income (loss) 24,927 (23,840) 48,767 (204.6) % Interest expense, net 3,376 2,489 887 35.6 % Loss on change in fair value of contingent earnout shares 3,182 7,174 (3,992) (55.6) % Loss on change in fair value of warrants — 18,320 (18,320) (100.0) % Income (loss) before income tax expense (benefit) 18,369 (51,823) 70,192 (135.4) % Income tax expense (benefit) 5,924 (5,055) 10,979 (217.2) % Net income (loss) $ 12,445 $ (46,768) $ 59,213 (126.6) % have reviewedcontinue to grow our operations and we incurred higher stock-based compensation expenses.any other target business.We intendthe revaluation of contingent consideration liabilities due to consummate a Business Combination using cashstronger than anticipated performance from the proceedsassociated business acquisitions.2017 (the “Close Date”) and2021 was $3.4 million, an increase of $0.9 million, or 35.6%, compared to the private placement of warrantsprior-year period primarily due to purchase our Class A ordinary shares (“Private Placement Warrants”) that occurred at the Close Date, and from additional issuances of, if any, our capital stock and our debt, orhigher interest rates, partially offset by a combination of cash, stock anddecrease in average outstanding debt.At September 30, 2017, we held cash of $1,636,543, current liabilities of $1,295,110 and deferred underwriting compensation of $15,750,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Results of OperationsSeptemberJune 30, 20172021, the weighted average interest rate was approximately 3.3% compared to a rate of approximately 2.7% for the prior year period
`(in thousands, except %'s) Six Months Ended June 30, Increase / (Decrease) 2021 2020 Change ($) Change (%) Revenues: (As Restated) Net gaming $ 334,898 $ 101,575 $ 233,323 229.7 % Amusement 8,328 3,091 5,237 169.4 % ATM fees and other revenue 5,817 2,177 3,640 167.2 % Total net revenues 349,043 106,843 242,200 226.7 % Operating expenses: Cost of revenue (exclusive of depreciation and amortization expense shown below) 234,663 71,239 163,424 229.4 % General and administrative 50,588 31,896 18,692 58.6 % Depreciation and amortization of property and equipment 12,302 9,938 2,364 23.8 % Amortization of route and customer acquisition costs and location contracts acquired 12,268 11,130 1,138 10.2 % Other expenses, net 4,740 4,336 404 9.3 % Total operating expenses 314,561 128,539 186,022 144.7 % Operating income (loss) 34,482 (21,696) 56,178 (258.9) % Interest expense, net 6,720 6,738 (18) (0.3) % Loss (gain) on change in fair value of contingent earnout shares 5,979 (10,232) 16,211 (158.4) % Gain on change in fair value of warrants — (14,283) 14,283 (100.0) % Income (loss) before income tax expense (benefit) 21,783 (3,919) 25,702 (655.8) % Income tax expense (benefit) 7,837 (5,194) 13,031 (250.9) % Net income $ 13,946 $ 1,275 $ 12,671 993.8 % Inception33% to September34% on July 1, 2020.2017,2021 were $50.6 million, an increase of $18.7 million, or 58.6%, compared to the prior-year period. The increase was attributable to a reduction in our prior year monthly expenses during the previously mentioned IGB-mandated shutdown. General and administrative expenses for the six months ended June 30, 2021 also reflected higher non-variable payroll-related costs as we continued to grow our operations and we incurred higher stock-based compensation expenses.lossesfor the six months ended June 30, 2021 were $4.7 million, an increase of $94,400$0.4 million, or 9.3%, compared to the prior-year period due to larger fair value adjustments associated with the revaluation of contingent consideration liabilities due to stronger than anticipated performance from the associated business acquisitions, partially offset by lower non-recurring, one-time expenses attributable to non-capitalizable public offering costs incurred in the first quarter of 2020 and $218,915, respectively. Our business activities since our Public Offering have consisted solelycosts incurred in the second quarter of identifying2020 to provide benefits (e.g. employee portion of health insurance premiums) for furloughed employees during the IGB-mandated shutdown.evaluating prospective acquisition targets2020.Business Combination.Liquidity and Capital ResourcesOn February 22, 2017, TPG Pace II Sponsor LLC (the “Sponsor”) purchased an aggregategain of 11,500,000 Class F ordinary shares (the “Founder Shares”) for an aggregate purchase price of $25,000, or approximately $0.002 per share. On June 19, 2017, our Sponsor transferred 40,000 Class F ordinary shareseachthe change in the market value of our five independent directors at their original purchase price. On August 14, 2017, our Sponsor forfeited 250,000 Founder Shares onA-1 common stock, which was the expirationprimary input to the valuation of the underwriters’ over-allotment option. At September 30, 2017, our Sponsor and five independent directors (collectively,contingent earnout shares.“Initial Shareholders”) held, collectively, 11,250,000 Founder Shares.Onsix months ended June 30, 2017,2020 was $14.3 million. In the third quarter of 2020, we consummatedredeemed substantially all of the Public Offering of 45,000,000 Units (which included the purchase of 5,000,000 Units subjectwarrants which resulted in no change to the underwriters’ 6,000,000 Unit over-allotment option)fair value of the remaining warrants for the six months ended June 30, 2021.a pricethe end of $10.00 per Unit generating gross proceeds of $450,000,000 before underwriting discountseach gaming day and expenses. Each “Unit” consists of one Class A ordinary share and one-third of one warrant (a “Unit”). Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share (a “Warrant”). Only whole Warrantsincludes licensed establishments that may be exercisedtemporarily closed but still connected to the central system. Accel utilizes this metric to continually monitor growth from organic openings, purchased licensed establishments, and no fractional Warrants will be issued upon separationcompetitor conversions. Competitor conversions occur when a licensed establishment chooses to change terminal operators.Unitsend of each gaming day and only whole Warrantsincludes VGTs that may be traded. Priortemporarily shut off but still connected to the Close Date, we completedcentral system. Accel utilizes thisprivate saleaverage expiration date of an aggregateall outstanding contracts with Accel’s current licensed establishment partners, and then subtracting the applicable measurement date. The IGB limited the length of 7,333,000 Private Placement Warrants, each exercisablecontracts entered into after February 2, 2018 to purchase one Class A ordinary share for $11.50 per share, to our Sponsor, at a pricemaximum of $1.50 per Private Placement Warrant.We received gross proceeds fromeight years with no automatic renewals.Public Offering and the sale of the Private Placement Warrants of $450,000,000 and $11,000,000, respectively, for an aggregate of $461,000,000. $450,000,000 of the gross proceeds weredifference between cash deposited in a trust account with Continental Stock Transferall VGTs at each licensed establishment and Trust Company (the “Trust Account”). At the Close Date, the remaining $11,000,000 was held outside of the Trust Account, of which $9,000,000 was usedtickets issued to pay underwriting discounts and $300,000 was used to repay notes payable to our Sponsor, with the balance reserved to pay accrued offering and formation costs, business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. In the future, a portion of interest income on the funds held in the Trust Account may be released to us to pay tax obligations.At September 30, 2017, we had cash held outside of the Trust Account of $1,636,543, which is available to fund our working capital requirements.At September 30, 2017, we had current liabilities of $1,295,110, largely due to costs associated with our formation and Public Offering. We were able to begin identifying and evaluating potential Business Combinations following the Close Date and we therefore expect to incur additional expenses, which may be significant. We expect some portion of these expenses to be paid upon consummation of a Business Combination. We may, however, need to raise additional funds in order to meet the expenditures required for operating our business prior to a Business Combination. We may request loans from our Sponsor, affiliates of our Sponsor or certain of our executive officers and directors to fund our working capital requirements prior to completing a Business Combination. We may use working capital to repay such loans. Additional funds could also be raised through a private offering of debt or equity. There can be no assurance that we will be able to raise such funds.We may also need to obtain additional financing either to complete a Business Combination or because we become obligated to redeem a significant number of our Class A ordinary shares upon completion of a Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.We have 24 months from the Close Date, or 27 months from the Close Date if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date, to complete our Business Combination. If we do not complete a Business Combination within this period, we shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,players at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to us to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) dividedeach licensed establishment by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (includinglocations in operation each day during the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possibleperiod being measured. Then divide the calculated amount by the number of operating days in such period.such redemption, subject to the approval of the remaining shareholders and the board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The Initial Shareholders and our officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Accounttable sets forth information with respect to their Founder Shares if we failAccel’s licensed establishments, number of VGTs, and average remaining contract term as of June 30, respectively:As of June 30, Increase / (Decrease) 2021 2020 Change $ Change % Licensed establishments 2,527 2,335 192 8.2 % Video gaming terminals 13,177 11,108 2,069 18.6 % Average remaining contract term (years) 6.8 6.8 — — % completeAccel’s location hold-per-day for the Business Combination within 24three and six months fromended June 30, respectively:June 30, Increase / (Decrease) 2021 2020 Change $ Change % $ 855 $ — $ 855 N/A $ 824 $ 572 $ 252 44.1 % Close Date,three months ended June 30, 2020, due to the IGB mandated COVID-19 shutdown.27 months fromrepresent certain nonrecurring items that are unrelated to core performance. Management of Accel also believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate Accel’s ability to fund capital expenditures, service debt obligations and meet working capital requirements.(in thousands) Three Months Ended
June 30,Six Months Ended
June 30,2021 2020 2021 2020 (As Restated) (As Restated) Net income (loss) $ 12,445 $ (46,768) $ 13,946 $ 1,275 Adjustments: 6,162 5,565 12,268 11,130 2,148 1,327 3,741 2,387 3,182 7,174 5,979 (10,232) — 18,320 — (14,283) 2,687 3,132 4,740 4,336 (892) (2,343) (3,885) (2,015) Adjusted net income (loss) 25,732 (13,593) 36,789 (7,402) Depreciation and amortization of property and equipment 6,313 5,071 12,302 9,938 Interest expense, net 3,376 2,489 6,720 6,738 746 — 1,263 — Income tax expense (benefit) 6,816 (2,712) 11,722 (3,179) Adjusted EBITDA $ 42,983 $ (8,745) $ 68,796 $ 6,095 Close Date if we have executedlicensed video gaming establishments that are not connected with a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 monthscombination. Accel amortizes the upfront cash payment over the life of the Close Date. However, ifcontract, including expected renewals, beginning on the Initial Shareholders acquire public shares afterdate the Close Date, they will be entitled to liquidating distributions from the Trust Accountlocation goes live, and recognizes non-cash amortization charges with respect to such public shares if we failitems. Future or deferred cash payments, which may occur based on terms of the underlying contract, are generally lower in the aggregate as compared to completeestablished practice of providing higher upfront payments, and are also capitalized and amortized over the Business Combination withinremaining life of the allotted 24-month time period,contract. Future cash payments do not include cash costs associated with renewing customer contracts as Accel does not generally incur significant costs as a result of extension or 27 months from the Close Date if we have executedrenewal of an existing contract. Location contracts acquired in a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date.We intend to use substantially all of the funds held in the Trust Account, including earned interest (which interest shall be net of taxes payable) to consummate a Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to consummate a Business Combination, the remaining proceeds held in the Trust Account after completion of the Business Combination and redemptions of Class A ordinary shares, if any, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategy.Off-Balance Sheet Financing ArrangementsWe have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.Contractual ObligationsWe do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an administrative agreement to pay monthly recurring expenses of $20,000 for office space, administrative and support services to an affiliate of our Sponsor. The agreement terminates upon the earlier of the completion of a Business Combination or the liquidation of the Company.Critical Accounting PoliciesThe preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilitiesare recorded at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:Offering CostsWe comply with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” We incurred offering costs in connection with our Public Offering of $1,299,223, primarily consisting of accounting and legal services, securities registration expenses and exchange listing fees. These costs, along with paid and deferred underwriter discounts totaling $24,750,000, were charged to additional paid-in capital at the Close Date.Redeemable Ordinary SharesThe 45,000,000 Class A ordinary shares soldfair value as part of the Unitsbusiness combination accounting and then amortized as an intangible asset on a straight-line basis over the expected useful life of the contract of 10 years. “Amortization of route and customer acquisition costs and location contracts acquired” aggregates the non-cash amortization charges relating to upfront route and customer acquisition cost payments and location contracts acquired.Public Offering contain a redemption feature under which holdersjurisdiction, or when 24 months have elapsed from the date Accel first installs or acquires gaming terminals in the jurisdiction, whichever occurs first.Class A ordinary shares may redeempreviously mentioned IGB-mandated shutdown of Illinois video gaming due to the COVID-19 outbreak that had a significant impact on our performance in the prior-year periods.or a portionVGTs across the State of their public shares upon completionIllinois due to the COVID-19 outbreak, we took action in the first quarter of 2020 to reduce our projected monthly cash expenses down to $2-$3 million during the shutdown to position us to help mitigate the effects of the temporary cessation of operations. The actions taken include furloughing approximately 90% our employees and deferring certain payments to major vendors. Additionally, members of our Business Combinationmanagement team decided to voluntarily forgo their salaries until the resumption of video gaming operations. We also borrowed $65 million on our delayed draw term loan in March 2020 to increase our cash position and help preserve our financial flexibility.an amounta:cashsubstantially all of our assets (subject to certain exceptions) to secure the obligations under the Credit Agreement.their pro rata shareeither (a) the adjusted LIBOR rate (“LIBOR”) (which cannot be less than 0.5%) for interest periods of 1, 2, 3 or 6 months (or if consented to by (i) each applicable Lender, 12 months or any period shorter than 1 month or (ii) the Agent, a shorter period necessary to ensure that the end of the aggregate amount thenrelevant interest period would coincide with any required amortization payment ) plus the applicable LIBOR margin or (b) the alternative base rate (“ABR”) plus the applicable ABR margin. ABR is a fluctuating rate per annum equal to the highest of (i) the Federal Funds Effective Rate plus 1/2 of 1.0%, (ii) the prime rate announced from time to time by Capital One, National Association and (iii) LIBOR for a 1-month Interest Period on depositsuch day plus 1.0%. The Credit Agreement also includes provisions for determining a replacement rate when LIBOR is no longer available. As of June 30, 2021, the weighted-average interest rate was approximately 3.3%.Trust Account asCredit Agreement. The revolving loans and term loans bear interest at either (a) ABR (150 bps floor) plus a margin of two business days prior1.75% or (b) LIBOR (50bps floor) plus a margin of 2.75%, at our option.Business Combination (including interest, net cash proceedsaccordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), redemption provisions not solely within our control requireaddition, the securityCredit Agreement requires Accel to maintain (a) a ratio of consolidated first lien net debt to consolidated EBITDA no greater than 4.50 to 1.00 and (b) a ratio of consolidated EBITDA to consolidated fixed charges no less than 1.20 to 1.00, in each case, tested as of the last day of each full fiscal quarter ending after the Closing Date and determined on the basis of the four most recently ended fiscal quarters of Accel for which financial statements have been delivered pursuant to the Credit Agreement, subject to customary “equity cure” rights.classified outsideentitled to take various actions, including the acceleration of permanent equity. Ordinary liquidation events, which involveamounts due under the redemptionCredit Agreement, termination of the lenders’ commitments thereunder, foreclosure on collateral, and liquidation of all of an entity’s equity instruments, are excluded fromother remedial actions available to a secured creditor. The failure to pay certain amounts owing under the provisions of ASC 480. Although we did not specify a maximum redemption threshold, our amended and restated memorandum and articles of association provide that in no event will we redeem our Class A ordinary sharesCredit Agreement may result in an amount that would cause our net tangible assets, or total shareholders’ equity,increase in the interest rate applicable thereto.fall below $5,000,001. Accordingly, atthe gaming industry, as well as to provide additional financial flexibility, we and the other parties thereto amended the Credit Agreement on August 4, 2020 to provide a waiver of financial covenant breach for the periods ended September 30, 2017, 42,975,6862020 through March 31, 2021 of the First Lien Net Leverage Ratio and Fixed Charge Coverage Ratio (each as defined under the Credit Agreement). The amendment also raised the floor for the adjusted LIBOR rate to 0.5% and the floor for the Base Rate to 1.50%. We were in compliance with all debt covenants as of June 30, 2021. Given our 45,000,000 Class A ordinaryassumptions about the future impact of COVID-19 and its variant strains on the gaming industry, which could be materially different due to the inherent uncertainties of future restrictions on the industry, we expect to meet our cash obligations as well as remain in compliance with the debt covenants in our credit facility for the next 12 months.(in thousands) Six Months Ended
June 30,2021 2020 (As Restated) Net cash provided by (used in) operating activities $ 54,158 $ (17,284) Net cash used in investing activities (13,758) (4,002) Net cash provided by financing activities 3,657 44,717 classified outside of permanent equity.Net Loss per Ordinary ShareWe comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per ordinary share is computed by dividing net lossimpacted by the weighted average numberthe previously mentioned IGB-mandated shutdown of ordinary shares outstanding duringIllinois video gaming due to the periodCOVID-19 outbreak. The six months ended June 30, 2021 was also impacted by cash payments of $3.2 million for acquisitions.calculated using the treasury stock method. At September 30, 2017, we had outstanding warrants to purchase up to 22,333,333 Class A ordinary shares. The weighted average of these shares was excluded from the calculation of diluted net loss per ordinary share since the exercise of the warrants is contingent upon the occurrence of future events. At September 30, 2017, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then sharedescribed in our earnings underForm 10-K that affect judgments and estimates of amounts recorded for certain assets, liabilities, revenues, and expenses.treasury stock method. As a result, diluted net lossgross revenue per ordinary sharemachine per day is typically lower in the same as basic net loss per ordinary share for the period.Recent Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the our financial statements.QuantitativeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKQualitative Disclosures Aboutrates. Market Risk.To date, our efforts have been limitedrisk exposure is primarily the result of fluctuations in interest rates.organizational activities and activities relating to the Public Offering and the identification and evaluation of prospective acquisition targets for a Business Combination. We have neither engaged in any operations nor generated any revenues. As the net proceeds from our Public Offering and the sale of the Private Placement Warrants heldinterest rate risk in the Trust Accountordinary course of its business. Accel’s borrowings under its senior secured credit facility were $351.4 million as of June 30, 2021. If the underlying interest rates were to increase by 1.0%, or 100 basis points, the increase in interest expense on Accel’s floating rate debt would negatively impact Accel’s future earnings and cash flows by approximately $3.5 million annually, assuming the balance outstanding under Accel’s credit facility remained at $351.4 million. Cash and cash equivalents are currently held in cash we dovaults, highly liquid, checking and money market accounts, VGTs, redemption terminals, ATMs, and amusement equipment. As a result, these amounts are not believe there will be any material exposure tomaterially affected by changes in interest rate risk.At September 30, 2017, $450,000,000 was held in the Trust Account for the purposes of consummating a Business Combination. If we complete a Business Combination within 24 months after the Close Date, or 27 months from the Close Date if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months of the Close Date, funds in the Trust Account will be used to pay for the Business Combination, redemptions of Class A ordinary shares, if any, the deferred underwriting compensation of $15,750,000 and accrued expenses related to the Business Combination. Any funds remaining will be made available to us to provide working capital to finance our operations.We have not engaged in any hedging activities since our Inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.Procedures.Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted underProceduresSecurities Exchange Actfiling of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported withinthis Form 10-Q for the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, includingquarter ended June 30, 2021, our Chief Executive Officer (“CEO”, serving as our Principal Executive Officer) and our Chief Financial Officer to allow timely decisions regarding required disclosure.As required by Rules 13a-15 and 15d-15 under the Exchange Act,(“CFO”, serving as our Chief Executive Officer and ChiefPrincipal Financial Officer carried outOfficer) conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act)Act of 1934, as amended (“Exchange Act”)). As a result of this evaluation, our CEO and CFO concluded that those material weaknesses previously identified in Item 9A. “Controls and Procedures” of our Form 10-K were effective.Duringstill present as of June 30, 2021 (the “Evaluation Date”). Based on those material weaknesses, and the most recently completed fiscalevaluation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.there has been no changeended June 30, 2021 in our internal control over financial reporting that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.reporting other than the material weaknesses previously identified and disclosed in our Form 10-K.OTHEROTHER INFORMATIONLegal Proceedings.None.Factors.thatin our Form 10-K and our condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q in analyzing an investment in our common stock. If any such risks occur, our business, financial condition, and results of operations would likely suffer, the trading price of our common stock would decline, and you could lose all or part of your investment. In addition, the risk factors and uncertainties could cause our actual results to differ materially from those projected in our forward-looking statements, whether made in this report are any of the risks disclosed in our final Prospectus, dated June 27, 2017, which was filedor other documents we file with the SEC, on June 28, 2017. Any of these factors could resultor our annual report to stockholders, future press releases, or orally, whether in a significantpresentations, responses to questions, or material adverse effect on our results of operations or financial condition.otherwise. Additional risk factorsrisks and uncertainties not presentlycurrently known to us or thatthose we currently deemview to be immaterial may also impairmaterially adversely affect our business, financial condition, or results of operations.As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our final Prospectus, dated June 27, 2017, which was filed with the SEC on June 28, 2017. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.Unregistered Sales of Equity Securities and Use of Proceeds.Unregistered SalesOn February 22, 2017, our Sponsor purchased an aggregate of 11,500,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. On June 19, 2017, our Sponsor transferred 40,000 Founder to each of our five independent directors at their original purchase price. On August 14, 2017, our Sponsor forfeited 250,000 Founder Shares on the expiration of the underwriters’ over-allotment option. At September 30, 2017, our Sponsor and our five independent directors held, collectively, 11,250,000 Founder Shares.On the Close Date, we completed the private sale of an aggregate of 7,333,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share for $11.50 per share, to our Sponsor, at a price of $1.50 per Private Placement Warrant, generating proceeds, before expenses, of $11,000,000. The Private Placement Warrants are substantially similar to the Warrants underlying the Units issued in the Public Offering, except that if held by our Sponsor or its permitted transferees, they (i) may be exercised for cash or on a cashless basis and (ii) are not subject to being called for redemption. If the Private Placement Warrants are held by holders other than our Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by us and exercisable by the holders on the same basis as the Warrants.The sales of the above securities by the Company were deemed to be exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.Use of ProceedsOn June 27, 2017, our registration statement on Form S-1 (File No. 333-218575) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 45,000,000 Units at an offering price to the public of $10.00 per Unit for an aggregate offering price of $450,000,000, with each Unit consisting of one Class A ordinary share and one-third of one Warrant. Each whole Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. Only whole Warrants may be exercised and no fractional Warrants will be issued upon separation of the Units and only whole Warrants may be traded. Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as underwriters. Our Public Offering did not terminate before all of the securities registered in our registration statement were sold. The Public Offering was consummated on June 30, 2017.Net proceeds of $450,000,000 from the Public Offering and the sale of the Private Placement Warrants, including deferred underwriting discounts of $15,750,000, are held in the Trust Account at September 30, 2017. We paid $9,000,000 in underwriting discounts and incurred offering costs of $1,299,223 related to the Public Offering. In addition, the underwriters agreed to defer $15,750,000 in underwriting discounts, which amount will be payable when and if a Business Combination is consummated. We also repaid $300,000 in non-interest bearing loans made to us by our Sponsor to cover expenses related to the Public Offering. No payments were made by us to directors, officers or persons owning ten percent or more of our ordinary shares or to their associates, or to our affiliates. There has been no material change in the planned use of proceeds from the Public Offering as described in our final Prospectus, dated June 27, 2017, which was filed with the SEC on June 28, 2017.
None.Defaults Upon Senior Securities.Mine Safety Disclosures.Item 5. Other Information.None.ItemExhibits.The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.ExhibitNumberDescription 3.1* 4.1* 4.2* 4.3* 4.4* 10.1* 10.2* 10.3* 10.4* 10.5* 10.6* 10.7* 10.8* 10.9* 10.10* 10.11* 10.12* 10.13* 10.14*
EXHIBITSExhibitNumberDescriptionExhibit
No.31.1 31.2**31.2 32.1**32.1 32.2 32.2**101.INS**101.SCH**101.SCH XBRL Taxonomy Extension Schema Document 101.CAL**101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF**101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB**101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE**101.PRE XBRL Taxonomy Extension Presentation Linkbase Document *Incorporated herein by reference as indicated.104 Cover Page Inline XBRL File (included in Exhibit 101) **Filed herewith.SIGNATURESTPG PACE HOLDINGS CORP.ACCEL ENTERTAINMENT, INC. Date: November 8, 2017By:/s/ Karl PetersonDate: August 4, 2021 By: Karl PetersonChief Executive Officer (Principal Executive Officer)Date: November 8, 2017By:/s/ Martin DavidsonMartin Davidson
Chief Financial Officer (Principal Financial and Accounting Officer)21