Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-36788 | |
Entity Registrant Name | Exela Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1347291 | |
Entity Address, Address Line One | 2701 E. Grauwyler Rd. | |
Entity Address, City or Town | Irving | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75061 | |
City Area Code | 844 | |
Local Phone Number | 935-2832 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 484,557,092 | |
Entity Central Index Key | 0001620179 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, Par Value $0.0001 per share | |
Trading Symbol | XELA | |
Security Exchange Name | NASDAQ | |
6.00% Series B Cumulative Convertible Perpetual Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.00% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.0001 per share | |
Trading Symbol | XELAP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 38,263 | $ 20,775 |
Restricted cash | 43,712 | 27,285 |
Accounts receivable, net of allowance for doubtful accounts of $6,065 and $6,049, respectively | 189,585 | 184,102 |
Related party receivables and prepaid expenses | 719 | 715 |
Inventories, net | 16,011 | 15,215 |
Prepaid expenses and other current assets | 34,253 | 31,799 |
Total current assets | 322,543 | 279,891 |
Property, plant and equipment, net of accumulated depreciation of $200,680 and $196,683, respectively | 74,726 | 73,449 |
Operating lease right-of-use assets, net | 51,326 | 53,937 |
Goodwill | 358,211 | 358,323 |
Intangible assets, net | 233,695 | 244,539 |
Deferred income tax assets | 1,986 | 2,109 |
Other noncurrent assets | 28,916 | 24,775 |
Total assets | 1,071,403 | 1,037,023 |
Current liabilities | ||
Accounts payable | 63,953 | 61,744 |
Related party payables | 1,475 | 1,484 |
Income tax payable | 4,447 | 3,551 |
Accrued liabilities | 95,106 | 113,519 |
Accrued compensation and benefits | 57,164 | 60,860 |
Accrued interest | 34,793 | 10,075 |
Customer deposits | 16,780 | 17,707 |
Deferred revenue | 18,192 | 16,617 |
Obligation for claim payment | 62,886 | 46,902 |
Current portion of finance lease liabilities | 6,148 | 6,683 |
Current portion of operating lease liabilities | 15,352 | 15,923 |
Current portion of long-term debts | 138,664 | 144,828 |
Total current liabilities | 514,960 | 499,893 |
Long-term debt, net of current maturities | 1,068,873 | 1,104,399 |
Finance lease liabilities, net of current portion | 8,161 | 9,156 |
Pension liabilities, net | 27,128 | 28,383 |
Deferred income tax liabilities | 12,238 | 11,594 |
Long-term income tax liabilities | 3,189 | 3,201 |
Operating lease liabilities, net of current portion | 38,779 | 41,170 |
Other long-term liabilities | 5,373 | 5,999 |
Total liabilities | 1,678,701 | 1,703,795 |
Commitments and Contingencies (Note 8) | ||
Stockholders' equity (deficit) | ||
Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 487,008,798 shares issued and 484,557,092 shares outstanding at March 31, 2022 and 267,646,667 shares issued and 265,194,961 shares outstanding at December 31, 2021 | 59 | 37 |
Additional paid in capital | 953,364 | 838,853 |
Less: Common Stock held in treasury, at cost; 2,451,706 shares at March 31, 2022 and December 31, 2021 | (10,949) | (10,949) |
Equity-based compensation | 56,235 | 56,123 |
Accumulated deficit | (1,589,384) | (1,532,428) |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustment | (5,986) | (7,463) |
Unrealized pension actuarial losses, net of tax | (10,638) | (10,946) |
Total accumulated other comprehensive loss | (16,624) | (18,409) |
Total stockholders' deficit | (607,298) | (666,772) |
Total liabilities and stockholders' deficit | 1,071,403 | 1,037,023 |
Series A Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock | 1 | 1 |
Series B Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for doubtful accounts | $ 6,065 | $ 6,049 |
Accumulated depreciation | $ 200,680 | $ 196,683 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 487,008,798 | 267,646,667 |
Common stock, shares outstanding | 484,557,092 | 265,194,961 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock held in treasury at cost (in shares) | 2,451,706 | 2,451,706 |
Series A Preferred Stock | ||
Preferred stock, shares issued | 2,778,111 | 2,778,111 |
Preferred stock, shares outstanding | 2,778,111 | 2,778,111 |
Series B Preferred Stock | ||
Preferred stock, shares issued | 900,328 | 0 |
Preferred stock, shares outstanding | 900,328 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | $ 279,398 | $ 300,056 |
Cost of revenue (exclusive of depreciation and amortization) | 223,504 | 232,587 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 43,040 | 41,885 |
Depreciation and amortization | 18,212 | 19,599 |
Related party expense | 1,987 | 1,707 |
Operating profit (loss) | (7,345) | 4,278 |
Other expense (income), net: | ||
Interest expense, net | 39,760 | 43,131 |
Debt modification and extinguishment costs (gain), net | 884 | |
Sundry expense, net | 307 | 213 |
Other expense, net | 6,159 | 152 |
Net loss before income taxes | (54,455) | (39,218) |
Income tax benefit (expense) | (2,501) | 18 |
Net loss | (56,956) | (39,200) |
Net loss attributable to common stockholders | $ (57,895) | $ (38,304) |
Basic (in dollars per share) | $ (0.17) | $ (0.76) |
Diluted (in dollars per share) | $ (0.17) | $ (0.76) |
Series A Preferred Stock | ||
Other expense (income), net: | ||
Cumulative dividends for Series A Preferred Stock | $ (864) | $ 896 |
Series B Preferred Stock | ||
Other expense (income), net: | ||
Cumulative dividends for Series A Preferred Stock | $ (75) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Condensed Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (56,956) | $ (39,200) |
Other comprehensive income (loss), net of tax | ||
Foreign currency translation adjustments | 1,477 | 100 |
Unrealized pension actuarial gains (losses), net of tax | 308 | (157) |
Total other comprehensive loss, net of tax | $ (55,171) | $ (39,257) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Common Stock | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Treasury Stock | Additional Paid in Capital | Equity-Based Compensation | Foreign Currency Translation Adjustment | Unrealized Pension Actuarial Losses, net of tax | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2020 | $ 15 | $ 1 | $ (10,949) | $ 446,739 | $ 52,183 | $ (7,419) | $ (17,064) | $ (1,390,038) | $ (926,532) | |
Beginning balance (in shares) at Dec. 31, 2020 | 49,242,225 | 3,290,050 | 2,451,706 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (39,200) | (39,200) | ||||||||
Equity-based compensation | 387 | 387 | ||||||||
Foreign currency translation adjustment | 100 | 100 | ||||||||
Net realized pension actuarial gains, net of tax | (157) | (157) | ||||||||
Preferred shares converted to Common Stock (in shares) | 223,413 | (510,681) | ||||||||
Payment for fractional shares on Reverse Stock Split | (14) | (14) | ||||||||
Payment for fractional shares on Reverse Stock Split (in shares) | (5,445) | |||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 1 | 25,079 | 25,080 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 9,731,819 | |||||||||
Ending balance at Mar. 31, 2021 | $ 16 | $ 1 | $ (10,949) | 471,804 | 52,570 | (7,319) | (17,221) | (1,429,238) | (940,336) | |
Ending balance (in shares) at Mar. 31, 2021 | 59,192,012 | 2,779,369 | 2,451,706 | |||||||
Beginning balance at Dec. 31, 2020 | $ 15 | $ 1 | $ (10,949) | 446,739 | 52,183 | (7,419) | (17,064) | (1,390,038) | (926,532) | |
Beginning balance (in shares) at Dec. 31, 2020 | 49,242,225 | 3,290,050 | 2,451,706 | |||||||
Ending balance at Dec. 31, 2021 | $ 37 | $ 1 | $ (10,949) | 838,853 | 56,123 | (7,463) | (10,946) | (1,532,428) | (666,772) | |
Ending balance (in shares) at Dec. 31, 2021 | 265,194,961 | 2,778,111 | 2,451,706 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (56,956) | (56,956) | ||||||||
Equity-based compensation | 302 | 302 | ||||||||
Foreign currency translation adjustment | 1,477 | 1,477 | ||||||||
Net realized pension actuarial gains, net of tax | 308 | 308 | ||||||||
Common Stock exchanged for Series B Preferred Stock | $ (2) | 2 | ||||||||
Common Stock exchanged for Series B Preferred Stock (in shares) | (18,006,560) | 900,328 | ||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 24 | 114,509 | 114,533 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 236,281,501 | |||||||||
Withholding of employee taxes on vested RSUs | (190) | (190) | ||||||||
Common Stock issued for vested RSUs (in shares) | 1,087,190 | |||||||||
Ending balance at Mar. 31, 2022 | $ 59 | $ 1 | $ (10,949) | $ 953,364 | $ 56,235 | $ (5,986) | $ (10,638) | $ (1,589,384) | $ (607,298) | |
Ending balance (in shares) at Mar. 31, 2022 | 484,557,092 | 2,778,111 | 900,328 | 2,451,706 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net loss | $ (56,956) | $ (39,200) | |
Adjustments to reconcile net loss | |||
Depreciation and amortization | 18,212 | 19,599 | |
Original issue discount and debt issuance cost amortization | 3,531 | 3,840 | |
Debt modification and extinguishment costs (gain), net | 196 | ||
Provision for doubtful accounts | 61 | 50 | |
Deferred income tax provision | 635 | (297) | |
Share-based compensation expense | 308 | 387 | |
Unrealized foreign currency losses | (180) | (159) | |
Loss (Gain) on sale of assets | (41) | 29 | |
Fair value adjustment for interest rate swap | (125) | ||
Change in operating assets and liabilities, net of effect from acquisitions | |||
Accounts receivable | (6,146) | (11,248) | |
Prepaid expenses and other assets | (8,858) | (5,895) | |
Accounts payable and accrued liabilities | 5,345 | (30,787) | |
Related party payables | (12) | 37 | |
Additions to outsource contract costs | (140) | (156) | |
Net cash used in operating activities | (44,045) | (63,925) | |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (7,728) | (1,609) | |
Additions to patents | (25) | ||
Additions to internally developed software | (829) | (672) | |
Proceeds from sale of assets | 175 | ||
Net cash used in investing activities | (8,407) | (2,281) | |
Cash flows from financing activities | |||
Cash paid for equity issuance costs from at the market offerings | (4,664) | ||
Borrowings under factoring arrangement and Securitization Facility | 35,837 | 32,432 | |
Principal repayment on borrowings under factoring arrangement and Securitization Facility | (34,144) | (31,533) | |
Cash paid for withholding taxes on vested RSUs | (195) | ||
Lease terminations | (15) | (16) | |
Cash paid for debt issuance costs | (5,615) | ||
Principal payments on finance lease obligations | (1,516) | (3,029) | |
Borrowings from senior secured revolving facility | 3,000 | ||
Repayments on senior secured revolving facility | (49,477) | ||
Proceeds from issuance of 2026 Notes | 55,364 | ||
Borrowings from other loans | 1,865 | 1,959 | |
Repayment of BRCC term loan | (22,675) | ||
Principal repayments on senior secured term loans and other loans | (7,544) | (8,142) | |
Net cash provided by financing activities | 86,417 | 19,736 | |
Effect of exchange rates on cash | (50) | (101) | |
Net increase (decrease) in cash and cash equivalents | 33,915 | (46,571) | |
Cash, restricted cash, and cash equivalents | |||
Beginning of period | 48,060 | 70,309 | $ 70,309 |
End of period | 81,975 | 23,738 | $ 48,060 |
Supplemental cash flow data: | |||
Income tax payments, net of refunds received | 1,486 | 1,510 | |
Interest paid | 9,941 | 62,510 | |
Noncash investing and financing activities: | |||
Assets acquired through right-of-use arrangements | 50 | 220 | |
Accrued capital expenditures | 1,483 | 1,617 | |
Private Placement | |||
Cash flows from financing activities | |||
Proceeds from issuance of stock | $ 25,065 | ||
At the Market Offering | |||
Cash flows from financing activities | |||
Proceeds from issuance of stock | $ 119,196 |
General
General | 3 Months Ended |
Mar. 31, 2022 | |
General | |
General | 1. General These condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements as of and for the year ended December 31, 2021 included in the Exela Technologies, Inc. (the "Company," "Exela," "we," "our" or "us") annual report on Form 10-K for such period (the “2021 Form 10-K”). The accompanying condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These accounting principles require us to use estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from our estimates. The condensed consolidated financial statements are unaudited, but in our opinion include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year. Going Concern Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern In performing this evaluation, we concluded that under the standards of ASC 205-40 the following conditions raised substantial doubt about our ability to continue as a going concern: a history of net losses, net operating cash outflows, working capital deficits and significant cash payments for interest on our long-term debt. The Company also has cash obligations related to the remaining payments for the Appraisal Action (described in Note 8) and the guarantee in the form of a true-up mechanism related to the Exchange Notes issued in connection with the Revolver Exchange (described in Note 5). Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s obligations due before May 10, 2023. As required under ASC 205-40, management’s evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company, such as access to equity financing (despite the Company’s track record in raising nearly $500.0 million of such funds). The Company has undertaken and completed the following plans and actions to improve our available cash balances, liquidity or cash generated from operations, over the twelve month period from the date these financial statements are issued: ● completed the Revolver Exchange (see Note 5); ● amended the BRCC Facility to extend the maturity date to June 10, 2023 and to provide up to $51.0 million of additional liquidity through a revolving credit facility which becomes available as the Company pays down the term portion of the facility (which the Company expects to do over the next twelve months); ● executed a $150.0 million financing commitment from PNC Bank to replace the existing securitization facility that will generate annual interest rate savings of approximately $6.0 million when executed; and ● raised proceeds of $174.6 million from the sale of equity and debt during the three months ended March 31, 2022. Despite these actions, the Company will need to take further action to raise additional funds in the capital markets. In order to access the capital markets, the Company has filed shelf-registration statements on Form S-3 allowing the Company to raise an additional $1 billion: a $500.0 million universal shelf registration statement filed in March 2022 providing for the sale of common stock, preferred stock, warrants, debt securities and/or units and a $500.0 million shelf registration statement filed in October 2021 providing for the sale of preferred stock and debt securities. Based on our experience with the at-the-market programs and our knowledge of the Company and the financial market, we believe that we will be able to raise additional funds from the sale of equity and debt in the future. However, the Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry and considering these factors are outside of the Company’s control, substantial doubt about the Company’s ability to continue as a going concern exists under the standards of ASC 205-40. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. Net Loss per Share Earnings per share (“EPS”) is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock, par value $0.0001 per share (“Common Stock”) outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method and the if-converted method in periods of earnings. The two class method is an earnings allocation method that determines earnings per share (when there are earnings) for Common Stock and participating securities. The if-converted method assumes all convertible securities are converted into Common Stock. Diluted EPS excludes all dilutive potential shares of Common Stock if their effect is anti-dilutive. As the Company experienced net losses for the periods presented, the impact of the Company’s Series A Perpetual Convertible Preferred Stock (“Series A Preferred Stock”) and Series B Cumulative Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”), was calculated using the if-converted method. As of March 31, 2022, the outstanding shares of the Company’s Series A Preferred Stock and Series B Preferred Stock, if converted would have resulted in an additional 1,341,917 shares and 18,066,582 shares of Common Stock outstanding, respectively, however, they were not included in the computation of diluted loss per share as their effects were anti-dilutive (i.e., reduces the net loss per share). Similarly, the Company also did not include the effect of 35,000,000 warrants sold in the Company’s Initial Public Offering (“IPO”), the effect of 9,731,819 warrants sold in a private placement of securities on March 18, 2021 or the effect of the aggregate number of shares issuable pursuant to outstanding restricted stock units, performance units and options of 10,005,866 and 2,278,365 as of March 31, 2022 and 2021, respectively, in the calculation of diluted loss per share for the three months ended March 31, 2022 and 2021, because their effects were anti-dilutive. Three Months Ended March 31, 2022 2021 Net loss attributable to common stockholders (A) $ (57,895) $ (38,304) Weighted average common shares outstanding - basic and diluted (B) 343,732,970 50,646,482 Loss Per Share: Basic and diluted (A/B) $ (0.17) $ (0.76) Impact of COVID-19 The Covid-19 pandemic continues to persist throughout the world including the U.S., India, Canada, Europe and other locations where we operate. To date, the Covid-19 pandemic has negatively impacted the global economy, created significant financial market volatility, disrupted global supply chains, and resulted in a significant number of deaths and infections worldwide. The safety and well-being of our associates employees and our ability to fulfill our client service commitments are our highest priorities. After addressing the initial surge of the Covid-19 pandemic, we are now focused on running our business effectively in the new work from home paradigm while preparing for a more flexible workplace model in the future. Accordingly, the Company has taken several measures and expects to take further actions designed to protect the health of our employees and to minimize our operational disruption and resulting provision of services to our clients from the Covid-19 pandemic, including adopting masking, social distancing and cleaning measures in our production facilities. We are compliant with applicable federal, state and local Covid-19 rules, restrictions, orders and guidance, and are promoting vaccination among our associates. In fiscal year 2022 to date, we continue to see impacts of global supply chain challenges, availability of staff at some of our key operating centers and pending customers’ decision to resume work from office. However, all of our production-related facilities remain operational and are continuing to provide ongoing services to our clients. We continue to engage with our clients to assist with their service demands, including our clients’ needs for any supplemental operational services and/or changes to existing service requirements in response to the Covid-19 pandemic. Notwithstanding the foregoing, we are unable to precisely predict the impact that Covid-19 will have in the future due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities, the impact to the business of our clients, and other factors identified in Part I, Item 1A. “Risk Factors” in our 2021 Annual Report. Given these uncertainties, the global pandemic could disrupt the business of certain of our clients, decrease our clients’ demand for our services, impact our business operations and our ability to execute on our associated business strategies and initiatives, and adversely impact our consolidated results of operations and/or our financial condition in the future. We will continue to closely monitor and evaluate the nature and extent of the impact of the global pandemic to our business, consolidated results of operations, and financial condition. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | 2. New Accounting Pronouncements Recently Adopted Accounting Pronouncements Effective January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) no. 2021-05, Leases (Topic 842): Lessors — Certain Leases with Variable Lease Payments Effective January 1, 2022, the Company adopted ASU no. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force) Effective January 1, 2022, the Company adopted ASU no. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU no. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued ASU no. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Financial Instruments—Credit Losses (Topic 326) Codification Improvements to Topic 326, Financial Instruments—Credit Losses |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Significant Accounting Policies | |
Significant Accounting Policies | 3. Significant Accounting Policies The information presented below supplements the Significant Accounting Policies information presented in our 2021 Form 10-K. Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers Nature of Services Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services, but that are substantially the same, and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract. Disaggregation of Revenues The Company is organized into three segments: Information & Transaction Processing Solutions (“ITPS”), Healthcare Solutions (“HS”), and Legal & Loss Prevention Services (“LLPS”) (See Note 13). The following tables disaggregate revenue from contracts by segment and by geographic region for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 148,344 $ 56,596 $ 17,795 $ 222,735 $ 172,924 $ 51,093 $ 17,088 $ 241,105 EMEA 51,978 — — 51,978 54,209 — — 54,209 Other 4,685 — — 4,685 4,742 — — 4,742 Total $ 205,007 $ 56,596 $ 17,795 $ 279,398 $ 231,875 $ 51,093 $ 17,088 $ 300,056 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Accounts receivable, net $ 189,585 $ 184,102 Deferred revenues 19,150 17,518 Customer deposits 16,780 17,707 Costs to obtain and fulfill a contract 2,175 2,328 Accounts receivable, net includes $28.5 million and $22.6 million as of March 31, 2022 and December 31, 2021, respectively, representing amounts not yet billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers. Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $8.9 million during the three months ended March 31, 2022 that had been deferred as of December 31, 2021. Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. We recognized $0.3 million of amortization for these costs for the three months ended March 31, 2022 within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material. Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed. Performance Obligations At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes. A certain number of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. A certain number of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained. When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts give rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration. We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue. Transaction Price Allocated to the Remaining Performance Obligations In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of March 31, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 35,014 2023 35,725 2024 31,152 2025 28,316 2026 570 2027 and thereafter — Total $ 130,777 |
Intangibles Assets and Goodwill
Intangibles Assets and Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Intangibles Assets and Goodwill | |
Intangibles Assets and Goodwill | 4. Intangible Assets and Goodwill Intangible Assets Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consists of the following: March 31, 2022 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 508,258 $ (324,944) $ 183,314 Developed technology 88,553 (87,737) 816 Trade names (b) 8,425 (3,100) 5,325 Outsource contract costs 16,941 (14,765) 2,176 Internally developed software 49,859 (29,587) 20,272 Assembled workforce 4,473 (3,634) 839 Purchased software 26,749 (5,796) 20,953 Intangibles, net $ 703,258 $ (469,563) $ 233,695 December 31, 2021 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 508,241 $ (316,084) $ 192,157 Developed technology 88,553 (87,612) 941 Trade names (b) 8,400 (3,100) 5,300 Outsource contract costs 16,814 (14,486) 2,328 Internally developed software 49,108 (27,812) 21,296 Assembled workforce 4,473 (3,355) 1,118 Purchased software 26,749 (5,350) 21,399 Intangibles, net $ 702,338 $ (457,799) $ 244,539 (a) Amounts include intangible assets acquired in business combinations and asset acquisitions. (b) The carrying amount of trade names for 2022 and 2021 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at March 31, 2022 represents indefinite-lived intangible asset. Goodwill The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS (See Note 13). Goodwill by reporting segment consists of the following: Balances as at January 1, 2021 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2021 (a) ITPS $ 254,130 $ — $ (825) $ — $ (633) $ 252,672 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 359,781 $ — $ (825) $ — $ (633) $ 358,323 Balances as at January 1, 2022 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at March 31, 2022 (a) ITPS $ 252,672 $ — $ — $ — $ (112) $ 252,560 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ — $ (112) $ 358,211 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $316.5 million as at March 31, 2022 and December 31, 2021; and $317.5 million as at December 31, 2020. Accumulated impairment relating to LLPS is $243.4 million as at March 31, 2022, December 31, 2021 and December 31, 2020. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 3 Months Ended |
Mar. 31, 2022 | |
Long-Term Debt and Credit Facilities | |
Long-Term Debt and Credit Facilities | 5. Long-Term Debt and Credit Facilities Senior Credit Facilities On July 12, 2017, subsidiaries of the Company entered into a First Lien Credit Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch and KKR Corporate Lending LLC (the “Credit Agreement”) providing Exela Intermediate LLC, a wholly owned subsidiary of the Company, upon the terms and subject to the conditions set forth in the Credit Agreement, (i) a $350.0 million senior secured term loan maturing July 12, 2023 with an original issue discount of $7.0 million, and (ii) a $100.0 million senior secured revolving facility maturing July 12, 2022 (the “Revolving Credit Facility”). The Credit Agreement provided for the following interest rates for borrowings under the senior secured term facility and the Revolving Credit Facility: at the borrower’s option, either (1) an adjusted LIBOR, subject to a 1.0% floor in the case of term loans, or (2) a base rate, in each case plus an applicable margin. The initial applicable margin for the senior secured term facility was 7.5% with respect to LIBOR borrowings and 6.5% with respect to base rate borrowings. The initial applicable margin for the Revolving Credit Facility was 7.0% with respect to LIBOR borrowings and 6.0% with respect to base rate borrowings. The applicable margin for borrowings under the Revolving Credit Facility is subject to step-downs based on leverage ratios. The senior secured term loan is subject to amortization payments, commencing on the last day of the first full fiscal quarter of the Company following the closing date, of 0.6% of the aggregate principal amount for each of the first eight payments and 1.3 % of the aggregate original principal amount for payments thereafter, with any balance due at maturity. Term Loan Repricing On July 13, 2018, Exela executed a transaction to reprice the $343.4 million of term loans outstanding under its senior secured credit facilities (the “Repricing”). The Repricing was accomplished pursuant to a First Amendment to the First Lien Credit Agreement (the “First Amendment”), dated as of July 13, 2018, by and among the Company’s subsidiaries Exela Intermediate Holdings LLC, Exela Intermediate, LLC, each “Subsidiary Loan Party” listed on the signature pages thereto, Royal Bank of Canada, as administrative agent, and each of the lenders party thereto, whereby such subsidiaries borrowed $343.4 million of refinancing term loans (the “Repricing Term Loans”) to refinance their existing senior secured term loans. In accordance with ASC 470 – Debt – Modifications and Extinguishments, The Repricing Term Loans will bear interest at a rate per annum of, at the borrower’s option, either (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.0% floor, or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.5%, (ii) the prime rate and (iii) the one-month adjusted LIBOR plus 1.0%, in each case plus an applicable margin of 6.5% for LIBOR loans and 5.5% for base rate loans. The interest rates applicable to the Repricing Term Loans are 100 basis points lower than the interest rates applicable to the existing senior secured term loans that were incurred on July 12, 2017 pursuant to the Credit Agreement. The Repricing Term Loans will mature on July 12, 2023, the same maturity date as the prior senior secured term loans. 2018 Incremental Term Loans On July 13, 2018, the Company’s subsidiaries borrowed an additional $30.0 million pursuant to incremental term loans (the “Incremental Term Loans”) under the First Amendment. The proceeds of the Incremental Term Loans may be used by the Company for general corporate purposes and to pay fees and expenses in connection with the First Amendment. The interest rates applicable to the Incremental Term Loans are the same as those for the Repricing Term Loans. The borrower may voluntarily repay the Repricing Term Loans and the Incremental Term Loans (collectively, the “Term Loans”) at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans. The Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Repricing Term Loans and prior senior secured term loans. Other than as described above, the terms, conditions and covenants applicable to the Repricing Term Loans and the Incremental Term Loans are consistent with the terms, conditions and covenants that were applicable to the existing senior secured loans under the Credit Agreement. 2019 Incremental Term Loan On April 16, 2019, the Company’s subsidiaries borrowed an additional $30.0 million pursuant to incremental term loans (the “2019 Incremental Term Loans”) under the Second Amendment to First Lien Credit Agreement (the “Second Amendment”). The proceeds of the 2019 Incremental Term Loans were used to replace the cash spent for acquisitions, pay related fees, expenses and related borrowings and for general corporate purposes. The 2019 Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Incremental Term Loans, Repricing Term Loans and prior senior secured term loans under the Credit Agreement. The 2019 Incremental Term Loans will bear interest at a rate per annum that is the same as the Repricing Term Loans under the senior credit facility. The 2019 Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Term Loans. The borrower may voluntarily repay the 2019 Incremental Term Loans at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans. Other than as described above, the terms, conditions and covenants applicable to the 2019 Incremental Term Loans are consistent with the terms, conditions and covenants that are applicable to the Repricing Term Loans and 2018 Incremental Term Loans under the Credit Agreement. The Repricing and issuance of the 2018 and 2019 Incremental Term Loans resulted in a partial debt extinguishment, for which Exela recognized $1.4 million in debt extinguishment costs during the year ended December 31, 2019, reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations. Third Amendment On May 18, 2020, subsidiaries of the Company amended the Credit Agreement (the Third Amendment to First Lien Credit Agreement (the “Third Amendment”) to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Upon the Company’s delivery of the annual and quarterly financial statements within the time frames stated therein (which the Company satisfied during the month of June 2020), the borrower became in compliance with respect to the financial statement delivery requirements set forth in the Credit Agreement. Pursuant to the Third Amendment, the borrowers also amended the Credit Agreement to, among other things: restrict the borrower and its subsidiaries’ ability to designate or invest in unrestricted subsidiaries; incur certain debt; create certain liens; make certain investments; pay certain dividends or other distributions on account of its equity interests; make certain asset sales or other dispositions (or utilize the proceeds of certain asset sales to reinvest in the business); or enter into certain affiliate transactions pursuant to the negative covenants under the Credit Agreement. Further, pursuant to the amendment, the borrower under the Credit Agreement was also required to maintain a minimum Liquidity (as defined in the amendment) of $35.0 million. In connection with this amendment, the borrower paid a forbearance fee of $5 million to the consenting lenders. The Company concluded that the amendment represents modification of debt under ASC 470-50. Accordingly, the forbearance fee paid was added to unamortized debt issuance cost which shall be amortized using updated effective interest rate based on modified cash flows. Private Exchange On December 9, 2021, in a separate transaction referred to as “Private Exchange” (outside of the Public Exchange as discussed below), subsidiaries of the Company agreed with three (3) of their Term Loan lenders to exchange $212.1 million of Term Loans under the Credit Agreement for $84.3 million in cash and in $127.8 million principal amount of new 11.500% First-Priority Senior Secured Notes due 2026 (the “2026 Notes”). In connection with the Private Exchange transaction, the exchanging lenders provided consents to amend the Credit Agreement to (i) eliminate all affirmative covenants, (ii) eliminate all negative covenants and (iii) eliminate certain events of default (other than events of default relating to payment obligations). As a result of the Private Exchange, repurchases (as discussed below) and periodic principal repayments, $88.1 million aggregate principal amount of the senior secured term loan remains outstanding as of March 31, 2022 maturing July 12, 2023. Revolving Credit Facility; Letters of Credit As of December 31, 2021, our $100 million Revolving Credit Facility was fully drawn taking into account letters of credit issued thereunder. As of December 31, 2021, there were outstanding irrevocable letters of credit totaling approximately $0.5 million under the Revolving Credit Facility. On March 7, 2022, subsidiaries of the Company entered into a Revolving Loan Exchange and Prepayment Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, KKR Corporate Lending LLC, Granite State Capital Master Fund LP, Credit Suisse Loan Funding LLC and Revolvercap Partners Fund LP exchanging $100.0 million of outstanding Revolving Credit Facility owed by Exela Intermediate LLC, upon the terms and subject to the conditions set forth in the Revolver Exchange agreement, for (i) $50.0 million in cash, and (ii) $50.0 million of 2026 Notes (such exchange, the “Revolver Exchange” and such 2026 Notes, the “Exchange Notes”). Prepayment of Revolving Credit Facility was treated as an extinguishment of debt under ASC 470-50. Accordingly, the Company wrote off the unamortized balance of $0.2 million of debt issuance costs related to Revolving Credit Facility and reported it within Debt modification and extinguishment costs (gain), net in our condensed consolidated statements of operations for the three months ended March 31, 2022. The Exchange Notes are subject to a guarantee in the form of a true-up mechanism whereby the Company is responsible to make a payment to the holders of the Exchange Notes to true-up the shortfall below certain agreed thresholds if holders of the Exchange Notes sell their notes at a price below that threshold during agreed periods in 2022. We recognized $17.4 million (the fair value of the true-up obligation as accounted for under ASC 460, Contingencies Guarantees Senior Secured 2023 Notes On July 12, 2017, subsidiaries of the Company issued $1.0 billion in aggregate principal amount of 10.0% First Priority Senior Secured Notes due 2023 (the “2023 Notes”). The 2023 Notes are guaranteed by nearly all U.S. subsidiaries of the Company. The 2023 Notes bear interest at a rate of 10.0% per year. The issuers pay interest on the 2023 Notes on January 15 and July 15 of each year, commencing on January 15, 2018. The 2023 Notes will mature on July 15, 2023. Public Exchange On October 27, 2021, the Company launched an offer to exchange (the “Public Exchange”) up to $225.0 million in cash and new 2026 Notes for the Company’s outstanding 2023 Notes. The Public Exchange was for $900 in cash per $1,000 principal amount of 2023 Notes tendered subject to proration. The maximum amount of cash to be paid was $225.0 million and the offer was not subject to any minimum participation condition. In case of oversubscription to the cash offer, tendered 2023 Notes would be accepted for cash on a pro rata basis (as a single class). The balance of any tendered 2023 Notes not accepted for cash would be exchanged into 2026 Notes on the basis of $1,000 principal amount of new 2026 Notes for each $1,000 principal amount of outstanding 2023 Notes tendered. As of the expiration time of the Public Exchange, $912,660,000 aggregate principal amount, or approximately 91.3%, of the 2023 Notes were validly tendered pursuant to the Public Exchange. On December 9, 2021, upon the settlement of the Public Exchange, $662,660,000 aggregate principal amount of the 2026 Notes were issued and an aggregate $225.0 million in cash (plus accrued but unpaid interest) was paid to participating holders in respect of the validly tendered 2023 Notes. As a result of the Public Exchange and repurchases (as discussed below), $22.8 million aggregate principal amount of the 2023 Notes remains outstanding as of March 31, 2022 maturing on July 15, 2023. Third Supplemental Indenture In conjunction with the Public Exchange, the Company also solicited consents to amend certain provisions in the indenture governing the 2023 Notes (“Notes Amendments”). On December 1, 2021, on receipt of the requisite consents to the Notes Amendments, the Company, and Wilmington Trust, National Association, as trustee (the “2023 Notes Trustee”), entered into a third supplemental indenture (the “Third Supplemental Indenture”) to the indenture, dated as of July 12, 2017 (as amended and supplemented by (i) the first supplemental indenture, dated as of July 12, 2017 and (ii) the second supplemental indenture, dated as of May 20, 2020, the “2023 Notes Indenture”) governing the outstanding 2023 Notes. The Third Supplemental Indenture amends the 2023 Notes Indenture and the 2023 Notes to eliminate substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and consolidations and modify or eliminate certain other provisions, including certain provisions relating to future guarantors and defeasance, contained in the 2023 Notes Indenture and the 2023 Notes. In addition, all of the collateral securing the 2023 Notes was released pursuant to the Third Supplemental Indenture. Senior Secured 2026 Notes As of December 31, 2021, subsidiaries of the Company had $795.0 million aggregate outstanding principal amount of the 2026 Notes including $790.5 million in aggregate principal amount issued under the Public Exchange and Private Exchange transactions described above. During the three months ended March 31, 2022, subsidiaries of the Company sold $81.5 million in aggregate of principal amount of the 2026 Notes generating net proceeds of $49.8 million. On March 18, 2022, the subsidiaries of the Company issued $50.0 million of the 2026 Notes to satisfy the exchange obligation under the Revolver Exchange. The 2026 Notes are guaranteed by nearly all U.S. subsidiaries of the Company. The 2026 Notes bear interest at a rate of 11.5% per year. The issuers shall pay interest on the 2026 Notes on January 15 and July 15 of each year, commencing on July 15, 2022. The 2026 Notes will mature on July 12, 2026. On or after December 1, 2022, the issuers may redeem the 2026 Notes in whole or in part from time to time, at a redemption price of 100%, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, prior to December 1, 2022, the issuers may redeem the 2026 Notes in whole or in part from time to time, at a redemption price equal to 100% of the principal amount of the 2026 Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. “Applicable Premium” means, with respect to any 2026 Note on any applicable redemption date, as determined by the issuers, the greater of: (1) 1% of the then outstanding principal amount of the 2026 Note; and (2) the excess of: (a) the present value at such redemption date of (i) the redemption price of the 2026 Note, at December 1, 2022 plus (ii) all required interest payments due on the 2026 Note through December 1, 2022 (excluding accrued but unpaid interest), computed using a discount rate equal to the treasury rate as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of the 2026 Note. As of March 31, 2022, subsidiaries of the Company had also issued $33.4 million and $10.0 million of principal amount of 2026 Notes as collateral for the remaining payment obligation under the Appraisal Action settlement (discussed under Note 8) and the true-up obligation under the Revolver Exchange, respectively. These collateral notes are not reflected in the condensed consolidated financial statements. Repurchases In July 2021 the Company commenced a debt buyback program to repurchase 2023 Notes and senior secured term loans under the Credit Agreement, which remains in place. During the year ended December 31, 2021, we repurchased $64.5 million of the outstanding principal amount of our 2023 Notes for a net cash consideration of $48.4 million. During the year ended December 31, 2021, we also repurchased $40.0 million of outstanding principal amount of Term Loans under the Credit Agreement for a net cash consideration of $22.8 million. These repurchases resulted in an early extinguishment of the repurchased 2023 Notes and senior secured term loans. The Company did not repurchase any senior secured term loans and 2023 Notes during the three months ended March 31, 2022. BRCC Facility On November 17, 2021, GP2 XCV, LLC, a subsidiary of the Company (“GP2 XCV"), entered into a borrowing facility with B. Riley Commercial Capital, LLC pursuant to which the Company was able to borrow an original principal amount of $75.0 million, which was later increased to $115.0 million as of December 7, 2021 (as the same may be amended from time to time, the “BRCC Term Loan”). On March 31, 2022, GP2 XCV entered into an amendment to the borrowing facility with B. Riley Commercial Capital, LLC pursuant to which the Company will be able to borrow up to $51.0 million under a separate revolving loan (the “BRCC Revolver”, collectively with BRCC Term Loan, the “BRCC Facility”). There was $10.0 million of availability under this revolving facility as of March 31, 2021. The BRCC Facility is secured by a lien on all the assets of GP2 XCV and by a pledge of the equity of GP2 XCV. GP2 XCV is a bankruptcy-remote entity and as such its assets are not available to other creditors of the Company or any of its subsidiaries other than GP2 XCV. The BRCC Facility will mature on June 10, 2023 (see Note 14). However, the BRCC Revolver is subject to certain automatic maturity extensions of six months, unless B. Riley Commercial Capital, LLC or the Company notifies the other party about its election not to extend. In such event, the outstanding principal amount of the BRCC Revolver as of the maturity shall be due and payable in 12 equal installments on the last business day of each calendar month thereafter. Interest under the BRCC Facility accrues at a rate of 11.5% per annum and is payable quarterly on the last business day of each March, June, September and December. The purpose of BRCC Term Loan was to fund certain repurchases of Term Loan under the Credit Agreement and to provide funding for the Public Exchange transaction and Private Exchange transaction described above. The purpose of BRCC Revolver is to fund general corporate purposes. During the three months ended March 31, 2022, we repaid $22.7 million of outstanding principal amount under the BRCC Term Loan along with $0.7 million of exit fee. Exit fee paid on the partial prepayment of BRCC Term Loan was treated as a debt extinguishment cost under ASC 470-50 and reported within Debt modification and extinguishment costs (gain), net in our condensed consolidated statements of operations for the three months ended March 31, 2022. As of March 31, 2022, there were borrowings of $92.3 million outstanding under the BRCC Term Loan maturing June 10, 2023. Securitization Facility On December 17, 2020, certain subsidiaries of the Company entered into a $145.0 million securitization facility with a five year term (the “Securitization Facility”). Borrowings under the Securitization Facility are subject to a borrowing base definition that consists of receivables and, subject to contribution, further supported by inventory and intellectual property, in each case, subject to certain eligibility criteria, concentration limits and reserves. The Securitization Facility provided for an initial funding of approximately $92.0 million supported by the receivables portion of the borrowing base and, subject to contribution, a further funding of approximately $53.0 million supported by inventory and intellectual property. On December 17, 2020, Exela Receivables 3, LLC (the “Securitization Borrower”) made the initial borrowing of approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to repay $83.0 million of the aggregate outstanding principal amount of loans as of December 17, 2020 under a previous $160.0 million accounts receivable securitization facility (“A/R Facility”) and used the remaining proceeds for general corporate purposes. On April 11, 2021, the Company amended the Securitization Loan Agreement and agreed to, among other things, extend the option to access further funding of approximately $53.0 million in additional borrowings from April 10, 2021 to September 30, 2021 upon the contribution of inventory and intellectual property to support the borrowing base. The initial documentation for the Securitization Facility includes (i) a Loan and Security Agreement (the “Securitization Loan Agreement”), dated as of December 10, 2020, by and among the Securitization Borrower, a wholly-owned indirect subsidiary of the Company, the lenders (each, a “Securitization Lender” and collectively the “Securitization Lenders”), Alter Domus (US), LLC, as administrative agent (the “Securitization Administrative Agent”) and the Company, as initial servicer, pursuant to which the Securitization Lenders will make loans to the Securitization Borrower to be used to purchase receivables and related assets from the Securitization Parent SPE (as defined below), (ii) a First Tier Receivables Purchase and Sale Agreement (the, dated as of December 17, 2020, by and among Exela Receivables 3 Holdco, LLC (the “Securitization Parent SPE”), a wholly-owned indirect subsidiary of the Company, and certain other indirect, wholly-owned subsidiaries of the Company listed therein (collectively, the “Securitization Originators”), and the Company, as initial servicer, pursuant to which each Securitization Originator has sold or contributed and will sell or contribute to the Securitization Parent SPE certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Parent SPE, (iii) a Second Tier Receivables Purchase and Sale Agreement, dated as of December 17, 2020, by and among, the Securitization Borrower, the Securitization Parent SPE and the Company, as initial servicer, pursuant to which Securitization Parent SPE has sold or contributed and will sell or contribute to the Securitization Borrower certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Borrower, (iv) the Sub-Servicing Agreement, dated as of December 17, 2020, by and among the Company and each Securitization Originator, (v) the Pledge and Guaranty, dated as of the December 10, 2020, between the Securitization Parent SPE and the Administrative Agent, and (vi) the Performance Guaranty, dated as of December 17, 2020, between the Company, as performance guarantor, and the Securitization Administrative Agent (and together with all other certificates, instruments, UCC financing statements, reports, notices, agreements and documents executed or delivered in connection with the Securitization Loan Agreement, the “Securitization Agreements”). The Securitization Borrower, the Company, the Securitization Parent SPE and the Securitization Originators provide customary representations and covenants under the Securitization Agreements. The Securitization Loan Agreement provides for certain events of default upon the occurrence of which the Securitization Administrative Agent may declare the facility’s termination date to have occurred and declare the outstanding Securitization Loan and all other obligations of the Securitization Borrower to be immediately due and payable, however the Securitization Facility does not include an ongoing liquidity covenant like the A/R Facility and aligns reporting obligations with the Company’s other material indebtedness agreements. The Securitization Borrower and Securitization Parent SPE were formed in December 2020, and are identified as VIEs and consolidated into the Company’s financial statements following VIE consolidation model under ASC 810. The Securitization Borrower and Securitization Parent SPE are bankruptcy remote entities and as such their assets are not available to creditors of the Company or any of its subsidiaries. Each loan under the Securitization Facility bears interest on the unpaid principal amount as follows: (i) if a Base Rate Loan, at a rate per annum equal to (x) the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus Long-Term Debt Outstanding As of March 31, 2022 and December 31, 2021, the following long-term debt instruments were outstanding: March 31, December 31, 2022 2021 Other (a) $ 29,804 29,296 Term loan under first lien credit agreement (b) 85,085 89,585 Senior secured 2023 notes (c) 22,651 22,616 Senior secured 2026 notes (d) 885,725 801,306 Secured borrowings under BRCC Facility 92,325 115,000 Secured borrowings under Securitization Facility 91,947 91,947 Revolver — 99,477 Total debt 1,207,537 1,249,227 Less: Current portion of long-term debt (138,664) (144,828) Long-term debt, net of current maturities $ 1,068,873 $ 1,104,399 (a) Other debt represents outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company. (b) Net of unamortized original issue discount and debt issuance costs of $0.6 million and $2.3 million as of March 31, 2022 and $0.8 million and $2.8 million as of December 31, 2021. (c) Net of unamortized original issue discount and debt issuance costs of $0.1 million and less than $0.1 million as of March 31, 2022 and $0.2 million and $0.1 million as of December 31, 2021. (d) Net of unamortized net original issue discount and debt issuance costs of $26.7 million and $14.0 million as of March 31, 2022; and unamortized net debt exchange premium and carried forward debt issuance costs of $15.4 million and $9.0 million as of December 31, 2021 . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes | |
Income Taxes | 6. Income Taxes The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods, as required under GAAP. The Company recorded an income tax expense of $2.5 million and income tax benefit of less than $0.1 million for the three months ended March 31, 2022 and 2021, respectively. The Company's ETR of (4.6)% for the three months ended March 31, 2022 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s deferred tax assets on U.S. disallowed interest expense carryforwards created by the provisions of The Tax Cuts and Jobs Act (“TCJA”). For the three months ended March 31, 2021, the Company’s ETR of 0.05% differed from the expected U.S. statutory tax rate of 21.0% , and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s U.S. disallowed interest expense carryforwards created by the provisions of the TCJA. As of March 31, 2022, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2021. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2022 | |
Employee Benefit Plans | |
Employee Benefit Plans | 7. Employee Benefit Plans German Pension Plan The Company’s subsidiary in Germany provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company. U.K. Pension Plan The Company’s subsidiary in the United Kingdom provides pension benefits to certain retirees and eligible dependents. Employees eligible for participation include all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or December 31, 2015. Norway Pension Plan The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the later of two dates, the participants leaving the Company or April 30, 2018. Asterion Pension Plan In April 2018 through its acquisition of Asterion International Group the Company became obligated to provide pension benefits to eligible retirees and eligible dependents of Asterion. Employees eligible for participation include all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or April 10, 2018. Tax Effect on Accumulated Other Comprehensive Loss As of March 31, 2022 and December 31, 2021 the Company recorded actuarial losses of $10.6 million and $10.9 million in accumulated other comprehensive loss on the condensed consolidated balance sheets, respectively, which is net of a deferred tax benefit of $2.0 million for each period. Pension Expense The components of the net periodic benefit cost are as follows: Three Months Ended March 31, 2022 2021 Service cost $ 16 $ 19 Interest cost 517 424 Expected return on plan assets (772) (605) Amortization: Amortization of prior service cost 56 45 Amortization of net loss 688 838 Net periodic benefit cost $ 505 $ 721 The Company records pension interest cost within Interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within Other income, net. Service cost is recorded within Cost of revenue. Employer Contributions The Company’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $0.7 million and $0.9 million to its pension plans during the three months ended March 31, 2022 and 2021, respectively. The Company has funded the pension plans with the required contributions for 2022 based on current plan provisions. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Appraisal Action On September 21, 2017, former stockholders of SourceHOV Holdings, Inc. (“SourceHOV”), who owned 10,304 shares of SourceHOV common stock, filed a petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery (the “Court”), captioned Manichaean Capital, LLC, et al. v. SourceHOV Holdings, Inc., C.A. No. 2017 0673 JRS (the “Appraisal Action”). The Appraisal Action arose out of a preliminary transaction in connection with the acquisition of SourceHOV and Novitex Holdings, Inc., by Quinpario in July 2017 (“Novitex Business Combination”), and the petitioners sought, among other things, a determination of the fair value of their SourceHOV shares at the time of the Novitex Business Combination; an order that SourceHOV pay that value to the petitioners, together with interest at the statutory rate; and an award of costs, attorneys’ fees, and other expenses. During the trial the parties and their experts offered competing valuations of the SourceHOV shares as of the date of the Novitex Business Combination. SourceHOV argued the value was no more than accrues on the per share value from the July 2017 closing date of the Novitex Business Combination until the date of payment to petitioners. On December 31, 2021, we agreed to settle the Appraisal Action along with a separate case brought by the same plaintiffs for $63.4 million. Accordingly, as of December 31, 2021, the Company accrued a liability of $63.4 million for these matters, all of which is expected to be paid during the first half of 2022 ($40.0 million having already been paid as of March 31, 2022). As of March 31, 2022, there was a net outstanding balance of $24.5 million, including interest, for this matter included in Accrued liabilities on the condensed consolidated balance sheet. Adverse Arbitration Order In April 2020, one of the Company's Nordic subsidiaries commenced an arbitration in Finland against a customer alleging breach of contract and other damages in connection with an outsourcing services agreement and transition services agreement executed in 2017. In September 2020, the customer submitted counterclaims against the Company in an aggregate amount in excess of €10.0 million. Following an expedited arbitration, in late November 2020, the arbitrator awarded the customer approximately $13.0 million in the aggregate for the counterclaimed damages and costs. The Company filed an application to annul the award in late January 2021 with the relevant court asserting, among other bases, that the arbitrator violated due process and procedural rules by disallowing the Company’s witness and expert testimony and maintaining the expedited format following the assertion of significant counterclaims which would ordinarily have required the application of normal rather than expedited rules. On May 28, 2021, the parties entered into a settlement agreement resolving this dispute for a total of $8.8 million including the reimbursement of certain third party charges. As of March 31, 2022, there was a net outstanding balance of $2.9 million for this matter included in Accrued liabilities on the Condensed Consolidated Balance Sheet. Contract-Related Contingencies The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurement | |
Fair Value Measurement | 9. Fair Value Measurement Assets and Liabilities Measured at Fair Value The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of March 31, 2021, and December 31, 2021, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan, secured 2023 notes and secured 2026 notes at approximately 70.0%, 70.0% and 50.0% respectively, of the respective principal balance outstanding as of March 31, 2022. The fair values of secured borrowings under the Company’s securitization facility and BRCC facility are equal to the respective carrying values. Other debt represents the Company's outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company and as such, the cost incurred would approximate fair value. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value. The Company determined the fair value of its long-term debt using Level 2 inputs including the recent issue of the debt, the Company’s credit rating, and the current risk-free rate. The Company’s true-up guarantee liability related to true-up guarantee provided on the Exchange Notes issued under Revolver Exchange transaction is re-measured each period and represents a Level 3 measurement as it is based on the estimated true-up obligation amount based on the Revolving Loan Exchange and Prepayment Agreement terms less amount already paid, if any. The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of March 31, 2022, and December 31, 2021: Carrying Fair Fair Value Measurements As of March 31, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,068,873 $ 616,269 $ — $ 616,269 $ — True-up guarantee liability 23,585 23,585 — — 23,585 Nonrecurring assets and liabilities: Goodwill 358,211 358,211 — — 358,211 Carrying Fair Fair Value Measurements As of December 31, 2021 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,104,399 $ 895,615 $ — $ 895,615 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 10. Stock-Based Compensation Exela 2018 Stock Incentive Plan On January 17, 2018, Exela’s 2018 Stock Incentive Plan (the “2018 Plan”) became effective. The 2018 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other stock-based compensation to eligible participants. The Company was initially authorized to issue up to 2,774,588 shares of Common Stock under the 2018 Plan. On December 31, 2021, the shareholders of the Company approved our Amended and Restated 2018 Stock Incentive Plan increasing the number of shares of Common Stock reserved for issuance from an original 2,774,589 shares to 17,848,076. Restricted Stock Unit Restricted stock unit awards generally vest ratably over a one A summary of restricted stock unit activities under the 2018 Plan for the three months ended March 31, 2022 is summarized in the following table: Average Weighted Remaining Number Average Grant Contractual Life Aggregate of Units Date Fair Value (Years) Intrinsic Value Outstanding Balance as of December 31, 2021 1,369,008 $ 1.75 0.11 $ 2,393 Granted — — Forfeited — — Vested (1,283,507) (1.73) Outstanding Balance as of March 31, 2022 85,501 $ 2.02 0.51 $ 172 The majority of the RSUs that vested in the first quarter of 2022 were net-share settled such that the Company withheld shares with value equivalent to the employee’s minimum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were 239,847 shares and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payment for the employee’s tax obligations to taxing authorities were $0.2 million and is reflected as a financing activity within the Condensed Consolidated Statements of Cash Flows. Options Under the 2018 Plan, stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying stock at the grant date. The vesting period for each option award is established on the grant date, and the options generally expire 10 years from the grant date. Options granted under the 2018 Plan generally require no less than a two Average Weighted Weighted Remaining Average Grant Average Vesting Period Aggregate Outstanding Date Fair Value Exercise Price (Years) Intrinsic Value (2) Outstanding Balance as of December 31, 2021 1,445,299 $ 5.63 $ 11.78 0.69 $ — Granted — — Exercised — — Forfeited (24,933) (5.60) Expired — — Outstanding Balance as of March 31, 2022 (1) 1,420,366 $ 5.63 $ 11.77 0.55 $ — (1) 542,813 of the outstanding options are exercisable as of March 31, 2022. (2) Exercise prices of all of the outstanding options as of March 31, 2022 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value is zero. As of March 31, 2022, there was approximately $0.8 million of total unrecognized compensation expense related to non-vested restricted stock unit awards and stock option awards under the 2018 Plan, which will be recognized over the respective service period. Stock-based compensation expense is recorded within Selling, general, and administrative expenses. The Company incurred total compensation expense of $0.1 million and $0.4 million related to restricted stock unit awards and stock option awards under the 2018 Plan for the three months ended March 31, 2022 and 2021, respectively. Market Performance Units On September 14, 2021, the Company granted its Executive Chairman performance units with a market performance condition, which are notional units representing the right to receive one share of Common Stock (or the cash value of one share of Common Stock). Until such time that the Company obtained the approval of the stockholders of the Company regarding an increase to the number of shares authorized for issuance under its 2018 Plan in accordance with Nasdaq Listing Rule 5635(a), these performance units would be settled in cash, and following such shareholder approval, at the election of the compensation committee of the Company, might be settled in cash or in shares of Common Stock. The performance units provide that until an increase to the share reserve is approved, such performance units are subject to the terms and conditions of the 2018 Plan as though granted thereunder, but not be considered an award that is outstanding under the plan, and following such time that the plan amendment is approved, constitute an award under the 2018 Plan. Fifty percent of the performance units covered by the award will vest if, at any time during the period commencing September 14, 2021 and ending June 30, 2024, the volume weighted average of the reported closing price of the Company’s Common Stock is $10 per share or greater on (x) 60 90 60 90 180 day and Tranche 2 units that are not earned by June 30, 2024 and June 30, 2025 (the “Expiration date”), respectively, will be forfeited for no consideration and will no longer be eligible to vest. In addition, if a change in control occurs prior to the applicable expiration date, if the performance units are assumed by the acquirer, the units will remain outstanding and eligible to vest based solely on his continued service to the Company. If in connection with such change in control the performance units are not assumed by an acquirer, a number of performance units will vest based on the per share price paid in the transaction, with 0% vesting if the per share price is equal to or less than $2.00 per share, and 100% of the Tranche 1 vesting if the per share price is equal to or greater than $10 and 100% of the Tranche 2 vesting if the per share price is equal to or greater than $20, and a number of Tranche 1 and Tranche 2 vesting determined based on a straight line interpolation if the share price is between $2.00 and $10.00 or $20.00, respectively. In addition, if there is a change in control that is principally negotiated and approved by, and recommended to the Company’s shareholders by, a special committee of independent directors which committee does not include the Executive Chairman, and neither he nor any of his affiliates is directly or indirectly an equity holder of the acquiring Company, and the Tranche 1 are not assumed by an acquirer in connection with such transaction, all of his then unvested Tranche 1 will vest, and the Tranche 2 would be eligible for the pro rata vesting described above. The Executive Chairman will remain eligible to earn his performance units so long as he remains employed with the Company as Executive Chairman through December 31, 2023 and following such date he remains engaged with the Company in any capacity, including as a non-employee director. On December 31, 2021, the Company obtained the approval of the stockholders of the Company for the 2018 Plan amendment regarding an increase to the number of shares authorized for issuance under its 2018 Plan. After approval of the amended and restated 2018 Plan, the performance units are an award that is outstanding under the amended and restated 2018 Plan. Therefore, the performance units may be settled in cash or in shares of Common Stock of the Company at the election of the compensation committee of the Company. The fair value of the awards was determined to be $1.48 and $1.51 for Tranche 1 and Tranche 2, respectively, on the grant date by application of the Monte Carlo simulation model. Until December 31, 2021, the performance units were cash-settled awards and therefore accounted for as a liability classified award. On December 31, 2021, upon the approval of the amended and restated 2018 Plan, the performance units may be settled in cash or in shares of Common Stock of the Company at the election of the compensation committee of the Company, therefore the award was reclassified to equity. On December 31, 2021, the modification date fair value of the awards was determined to be $0.44 and $0.47 for Tranche 1 and Tranche 2, respectively, by application of the Monte Carlo simulation model. The following table summarizes the activity for the market performance restricted stock units for the three months ended March 31, 2022: Weighted Average Weighted Period Over Number Average Which Expected of Units Fair Value to be Recognized Outstanding Balance as of December 31, 2021 8,500,000 $ 0.46 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of March 31, 2022 8,500,000 $ 0.46 2.98 As of March 31, 2022, there was approximately $2.4 million of total unrecognized compensation expense related to non-vested performance unit awards, which will be recognized over the requisite service period. We recognized $0.2 million compensation expense associated with the performance unit award for the three months ended March 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity The following description summarizes the material terms and provisions of the securities that the Company has authorized. Common Stock The Company is authorized to issue 1,600,000,000 shares of Common Stock. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock or as provided for in the Director Nomination Agreement to which the Company is party, the holders of our Common Stock possess all voting power for the election of our board of directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of Exela stockholders. Holders of our Common Stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of our Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions. The holders of the Common Stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the Common Stock. As of March 31, 2022 and December 31, 2021, there were 484,557,092 and 265,194,961 shares of Common Stock outstanding, respectively. Common Stock At-The-Market Sales Program On May 27, 2021, the Company entered into an At Market Issuance Sales Agreement (“First ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) and Cantor Fitzgerald & Co. (“Cantor”), as distribution agents under which the Company may offer and sell shares of the Company’s Common Stock from time to time through the Distribution Agents, acting as sales agent or principal. On September 30, 2021, the Company entered into a second At Market Issuance Sales Agreement with B. Riley, BNP Paribas Securities Corp., Cantor, Mizuho Securities USA LLC and Needham & Company, LLC, as distribution agents (together with the First ATM Agreement, the “ATM Agreement”). Sales of the shares of Common Stock under the ATM Agreement, will be in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the Nasdaq or on any other existing trading market for the Common Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. Shares of Common Stock sold under the ATM Agreement are offered pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-255707), filed with the SEC on May 3, 2021, and declared effective on May 12, 2021 (the “2021 Registration Statement”), and the prospectus dated May 12, 2021 included in the 2021 Registration Statement and the related prospectus supplements for sales of shares of Common Stock as follows: Supplement Period Number of Shares Sold Weighted Average Price Per Share Gross Proceeds Net Proceeds Prospectus supplement dated May 27, 2021 with an aggregate offering price of up to $100.0 million (“Common ATM Program–1”) May 28, 2021 and through July 1, 2021 49,423,706 $2.008 $99.3 million $95.7 million Prospectus supplement dated June 30, 2021 with an aggregate offering price of up to $150.0 million (“Common ATM Program–2”) June 30, 2021 and through September 2, 2021 57,580,463 $2.603 $149.9 million $144.4 million Prospectus supplement dated September 30, 2021 with an aggregate offering price of up to $250.0 million (“Common ATM Program–3”) October 6, 2021 through March 31, 2022 334,875,948 $0.747 $250.0 million $241.0 million Series A Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. At March 31, 2022 and December 31, 2021, the Company had 2,778,111 shares of Series A Preferred Stock outstanding. The par value of the Series A Preferred Stock is $0.0001 per share. Each share of Series A Preferred Stock is convertible at the holder's option, at any time into the number of shares of Common Stock determined as of the date of conversion using a certain conversion formula that takes into account the amount of Liquidation Preference per share as adjusted for accrued but unpaid dividends, as described below. As of March 31, 2022, each outstanding share of Series A Preferred Stock was convertible into 0.4830 shares of Common Stock using this conversion formula. Accordingly, as of March 31,2022, 1,341,917 shares of Common Stock were issuable upon conversion of the remaining 2,778,111 shares of Series A Preferred Stock. Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate per annum of 10% of the dollar amount of per share liquidation preference (plus accumulated but unpaid dividends, the “Series A Liquidation Preference") per share of Series A Preferred Stock, paid or accrued quarterly in arrears. From the issue date through December 31, 2021 the amount of all accrued but unpaid dividends on the Series A Preferred Stock have been added to the Series A Liquidation Preference. The Company shall add the amount of all accrued but unpaid dividends on each quarterly dividend payment date to the Series A Liquidation Preference, except to the extent the Company elects to make all or any portion of such payment in cash on or prior to the applicable dividend payment date, in which case, the amount of the accrued but unpaid dividends that is added to the Series A Liquidation Preference shall be reduced on a dollar-for-dollar basis by the amount of any such cash payment. The Company is not required to make any payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series A Preferred Stock or for dividends on the shares of Common Stock issued upon conversion of such shares. The gross dividend accumulation for the three months ended March 31, 2022 was $0.9 million. The gross dividend accumulation for the three months ended March 31, 2021 was $0.9 million, however, as a result of 510,681 shares of Series A Preferred Stock being converted into 223,413 shares of Common Stock during the first quarter of 2021, accumulated dividend of $1.8 million was reversed, resulting in a net reduction of dividend accumulation of $0.9 million for the three months ended March 31, 2021. As of March 31, 2022, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 is $13.2 million. The per share average of cumulative preferred dividends for the three months ended March 31, 2022 and 2021 is $0.3 and $(0.3) , respectively. In addition, holders of the Series A Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Series B Preferred Stock On February 24, 2022, the Company offered its shareholders the opportunity to exchange shares of its Common Stock for its Series B Preferred Stock, par value $0.0001 per share, with each 20 shares of Common Stock being exchangeable for one share of Series B Preferred Stock having a liquidation preference of $25.00 per share (the “Share Exchange Offer”). On March 11, 2022, the Company designated 5,000,000 shares of its authorized and unissued preferred stock as Series B Preferred Stock and filed a Certificate of Designation of Series B Preferred Stock of Exela Technologies Inc., or the Series B Certificate of Designation. The Share Exchange Offer expired on March 10, 2022, and 18,006,560 shares of Common Stock were validly tendered for exchange. On March 11, 2022, the Company issued a total of 900,328 shares of Series B Preferred Stock in exchange of all such tendered and accepted shares of Common Stock, which shares were cancelled. The Series B Preferred Stock are listed on the Nasdaq under the symbol “XelaP”. At March 31, 2022, the Company had 900,328 shares of Series B Preferred Stock outstanding. Each share of Series B Preferred Stock is convertible at the holder's option, at any time into the number of shares of Common Stock determined as of the date of conversion using a certain conversion formula that takes into account the amount of liquidation preference per share as adjusted for accrued but unpaid dividends, as described below. As of March 31, 2022, each outstanding share of Series B Preferred Stock was convertible into 20.0667 shares of Common Stock using this conversion formula. Accordingly, as of March 31, 2022, 18,066,582 shares of Common Stock were issuable upon conversion of 900,328 shares of outstanding Series B Preferred Stock. Holders of the Series B Preferred Stock are entitled to receive cumulative dividends at a rate per annum of 6% of the dollar amount of per share liquidation preference (plus accumulated but unpaid dividends, the “Series B Liquidation Preference") per share of Series B Preferred Stock, paid or accrued quarterly in arrears. From the issue date through March 31, 2022, the amount of all accrued but unpaid dividends on the Series B Preferred Stock have been added to the Series B Liquidation Preference. The Company shall add the amount of all accrued but unpaid dividends on each quarterly dividend payment date to the Series B Liquidation Preference, except to the extent the Company elects to make all or any portion of such payment in cash on or prior to the applicable dividend payment date, in which case, the amount of the accrued but unpaid dividends that is added to the Series B Liquidation Preference shall be reduced on a dollar-for-dollar basis by the amount of any such cash payment. The Company is not required to make any payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series B Preferred Stock or for dividends on the shares of Common Stock issued upon conversion of such shares. The gross dividend accumulation for the three months ended March 31, 2022 is less than $0.1 million. As of March 31, 2022, the total accumulated but unpaid dividends on the Series B Preferred Stock since inception on March 23, 2022 is less than $0.1 million. The per share average of cumulative preferred dividends for the three months ended March 31, 2022 is $0.08. In addition, holders of the Series B Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series B Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Holders of Series B Preferred Stock also have rights to vote for the election of one additional director to serve on the Board, if dividends on Series B Preferred Stock are in arrears for eight or more consecutive quarters, until all unpaid and accumulated dividends on the Series B Preferred Stock have been paid or declared and a sum sufficient for payment is set aside for such payment. Treasury Stock On November 8, 2017, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company was permitted to purchase up to 1,666,667 shares of Common Stock. The Share Buyback Program has expired. As of March 31, 2022, 929,049 shares had been repurchased under the Share Buyback Program and they are held as treasury stock. The Company records treasury stock using the cost method. During the first quarter of 2020, 1,523,578 shares of Common Stock were returned to the Company in connection with the Appraisal Action. These shares are also included in treasury stock. Warrants At March 31, 2022, there were warrants outstanding to purchase 15,565,152 shares of our Common Stock, consisting of 35,000,000 warrants to purchase one-sixth IPO Warrants As part of our IPO, we issued 35,000,000 units comprising one share of Common Stock and one warrant of which 34,986,302 have been separated from the original unit and 13,698 warrants remain an unseparated part of the originally issued units (the Common Stock included in these originally issued units (adjusted to reflect the Reverse Split) have been accounted for in the number of shares of Common Stock outstanding referred to above). The warrants traded on the OTC Pink under the symbol “XELAW” as of March 31, 2022. Each IPO warrant entitles the holder to purchase one-sixth The Company may call the IPO warrants for redemption at a price of $0.01 per warrant upon a minimum of 30 days ’ prior written notice of redemption, if, and only if, the last sales price of the shares of Common Stock equals or exceeds $72.00 per share for any 20 trading days within a 30 trading day period (the “30-day trading period”) ending three business days before the Company sends the notice of redemption, and if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption. Private Placement of Unregistered Shares and Warrants On March 15, 2021, the Company, entered into a securities purchase agreement with certain accredited institutional investors pursuant to which the Company issued and sold to ten accredited institutional investors in a private placement an aggregate of 9,731,819 unregistered shares of the Company’s Common Stock at a price of $2.75 per share and an equal number of warrants, generating gross proceeds to the Company of $26.8 million. Cantor Fitzgerald acted as underwriter in connection with such sale of unregistered securities and received a placement fee of 5.5 % of gross proceeds in connection with such service. In selling the shares without registration, the Company relied on exemptions from registration available under Section 4(a)(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. The shares of Common Stock sold together with these warrants are included in the Company’s calculation of total shares outstanding. The Company filed a registration statement on Form S-3 on May 3, 2021 that registered these shares and the shares underlying these private placement warrants. Each private placement warrant entitles the holder to purchase one share of Common Stock, at an exercise price of $4.00 per share and will expire on September 19, 2026. The private placement warrants are not traded as of March 31, 2022 and are not subject to redemption by the Company. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related-Party Transactions | |
Related-Party Transactions | 12. Related-Party Transactions Relationship with HandsOn Global Management The Company incurred reimbursable travel expenses to HOVS LLC and HandsOn Fund 4 I, LLC (collectively, together with certain affiliated entities controlled by HandsOn Global Management LLC, “HGM”) of less than $0.1 million for each of the three months ended March 31, 2022 and 2021. As of March 31, 2022, HGM beneficially owned approximately 2.4% of the Company’s Common Stock, including shares issuable upon conversion of our Series A Preferred Stock and Series B Preferred Stock. Certain members of our Board of Directors, including our Executive Chairman, Par Chadha, Sharon Chadha, Ron Cogburn, and James Reynolds are or may be deemed to be affiliated with HGM. Pursuant to a master agreement dated January 1, 2015 between Rule 14, LLC and a subsidiary of the Company, the Company incurs marketing fees to Rule 14, LLC, a portfolio company of HGM. Similarly, the Company is party to ten master agreements with entities affiliated with HGM’s managed funds, each of which were entered into during 2015 and 2016. Each master agreement provides the Company with use of certain technology and includes a reseller arrangement pursuant to which the Company is entitled to sell these services to third parties. Any revenue earned by the Company in such third-party sale is shared 75%/25% with each of HGM’s venture affiliates in favor of the Company. The brands Zuma, Athena, Peri, BancMate, Spring, Jet, Teletype, CourtQ and Rewardio are part of the HGM managed funds. The Company has the license to use and resell such brands, as described therein. The Company incurred fees relating to these agreements of $1.5 million and $1.1 million for the three months ended March 31, 2022 and 2021, respectively. Certain operating companies lease their operating facilities from HOV RE, LLC and HOV Services Limited, which are affiliates under common control with HGM. The rental expense for these operating leases was less than $0.1 million for each of the three months ended March 31, 2022 and 2021. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $0.3 million for each of the three months ended March 31, 2022 and 2021. These expenses are included in cost of revenue in the consolidated statements of operations. Consulting Agreement The Company receives services from Oakana Holdings, Inc. The Company and Oakana Holdings, Inc. are related through a family relationship between our Executive Chairman and the president of Oakana Holdings, Inc. The expense recognized for these services was less than $0.1 million for each of the three months ended March 31, 2022 and 2021. Subscription Agreements During the year ended December 31, 2021, the Company entered into separate subscription agreements with five of its directors. Pursuant to these subscription agreements, the Company issued and sold 62,500, 158,730, 63,492, 79,365 and 39,682 shares of Common Stock of the Company to Sharon Chadha, Par Chadha, Martin Akins, J. Coley Clark and John Rexford, respectively, for a purchase price of $0.1 million, $0.2 million, less than $0.1 million, $0.1 million and less than $0.1 million, respectively. Payable and Receivable/Prepayment Balances with Affiliates Payable and receivable/prepayment balances with affiliates as of March 31, 2022 and December 31, 2021 are as follows below. March 31, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 691 $ — $ 708 $ — Rule 14 — 1,466 — 1,483 HGM 28 — 7 — Oakana — 9 — 1 $ 719 $ 1,475 $ 715 $ 1,484 |
Segment and Geographic Area Inf
Segment and Geographic Area Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment and Geographic Area Information | |
Segment and Geographic Area Information | 13. Segment and Geographic Area Information The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS. ITPS: HS: LLPS: The chief operating decision maker reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate Selling, general, and administrative expenses, depreciation and amortization, interest expense and sundry, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented. A reconciliation of segment profit to net loss before income taxes is presented below. Three months ended March 31, 2022 ITPS HS LLPS Total Revenue $ 205,007 $ 56,596 $ 17,795 $ 279,398 Cost of revenue (exclusive of depreciation and amortization) 163,586 46,731 13,187 223,504 Segment profit 41,421 9,865 4,608 55,894 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,040 Depreciation and amortization 18,212 Related party expense 1,987 Interest expense, net 39,760 Debt modification and extinguishment costs (gain), net 884 Sundry expense, net 307 Other expense, net 6,159 Net loss before income taxes $ (54,455) Three months ended March 31, 2021 ITPS HS LLPS Total Revenue $ 231,875 $ 51,093 $ 17,088 $ 300,056 Cost of revenue (exclusive of depreciation and amortization) 185,502 35,818 11,267 232,587 Segment profit 46,373 15,275 5,821 67,469 Selling, general and administrative expenses (exclusive of depreciation and amortization) 41,885 Depreciation and amortization 19,599 Related party expense 1,707 Interest expense, net 43,131 Sundry expense, net 213 Other expense, net 152 Net loss before income taxes $ (39,218) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events. | |
Subsequent Events | 14. Subsequent Events The Company has evaluated all events that occur after the balance sheet date through the date when these condensed consolidated financial statements were issued to determine if they must be reported. Repayments on BRCC Facility On April 1, 2022, we repaid $20.0 million of outstanding principal amount under the BRCC Facility in accordance with the amendment entered into on March 31, 2022. On May 9, 2022, we agreed to extend the maturity of the BRCC Facility to June 10, 2023. Financing Commitment from PNC Bank On May 6, 2022, the Company executed a commitment with PNC Bank for a three-year receivables financing facility to replace its existing Securitization Facility. The new PNC facility provides up to $150.0 million in committed financing and is expected to close on or before May 31, 2022. Revolver Exchange On May 6, 2022, we agreed to issue an additional $20.0 million 2026 Notes as collateral for the true up mechanism in the Revolver Exchange (see Note 5) and to repurchase certain 2026 Notes from the former revolver lenders during the second half of 2022. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Significant Accounting Policies | |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers Nature of Services Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services, but that are substantially the same, and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract. Disaggregation of Revenues The Company is organized into three segments: Information & Transaction Processing Solutions (“ITPS”), Healthcare Solutions (“HS”), and Legal & Loss Prevention Services (“LLPS”) (See Note 13). The following tables disaggregate revenue from contracts by segment and by geographic region for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 148,344 $ 56,596 $ 17,795 $ 222,735 $ 172,924 $ 51,093 $ 17,088 $ 241,105 EMEA 51,978 — — 51,978 54,209 — — 54,209 Other 4,685 — — 4,685 4,742 — — 4,742 Total $ 205,007 $ 56,596 $ 17,795 $ 279,398 $ 231,875 $ 51,093 $ 17,088 $ 300,056 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Accounts receivable, net $ 189,585 $ 184,102 Deferred revenues 19,150 17,518 Customer deposits 16,780 17,707 Costs to obtain and fulfill a contract 2,175 2,328 Accounts receivable, net includes $28.5 million and $22.6 million as of March 31, 2022 and December 31, 2021, respectively, representing amounts not yet billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers. Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $8.9 million during the three months ended March 31, 2022 that had been deferred as of December 31, 2021. Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. We recognized $0.3 million of amortization for these costs for the three months ended March 31, 2022 within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material. Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed. Performance Obligations At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes. A certain number of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. A certain number of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained. When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts give rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration. We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue. Transaction Price Allocated to the Remaining Performance Obligations In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of March 31, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 35,014 2023 35,725 2024 31,152 2025 28,316 2026 570 2027 and thereafter — Total $ 130,777 |
General (Tables)
General (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
General | |
Schedule of components of basic and diluted EPS | Three Months Ended March 31, 2022 2021 Net loss attributable to common stockholders (A) $ (57,895) $ (38,304) Weighted average common shares outstanding - basic and diluted (B) 343,732,970 50,646,482 Loss Per Share: Basic and diluted (A/B) $ (0.17) $ (0.76) |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Significant Accounting Policies | |
Schedule of disaggregated revenue from contracts by geographic region and by segment | Three Months Ended March 31, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 148,344 $ 56,596 $ 17,795 $ 222,735 $ 172,924 $ 51,093 $ 17,088 $ 241,105 EMEA 51,978 — — 51,978 54,209 — — 54,209 Other 4,685 — — 4,685 4,742 — — 4,742 Total $ 205,007 $ 56,596 $ 17,795 $ 279,398 $ 231,875 $ 51,093 $ 17,088 $ 300,056 |
Schedule of contract balances | March 31, December 31, 2022 2021 Accounts receivable, net $ 189,585 $ 184,102 Deferred revenues 19,150 17,518 Customer deposits 16,780 17,707 Costs to obtain and fulfill a contract 2,175 2,328 |
Schedule of estimated remaining fixed consideration for unsatisfied performance obligations | Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 35,014 2023 35,725 2024 31,152 2025 28,316 2026 570 2027 and thereafter — Total $ 130,777 |
Intangibles Assets and Goodwi_2
Intangibles Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Intangibles Assets and Goodwill | |
Schedule of intangible assets | March 31, 2022 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 508,258 $ (324,944) $ 183,314 Developed technology 88,553 (87,737) 816 Trade names (b) 8,425 (3,100) 5,325 Outsource contract costs 16,941 (14,765) 2,176 Internally developed software 49,859 (29,587) 20,272 Assembled workforce 4,473 (3,634) 839 Purchased software 26,749 (5,796) 20,953 Intangibles, net $ 703,258 $ (469,563) $ 233,695 December 31, 2021 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 508,241 $ (316,084) $ 192,157 Developed technology 88,553 (87,612) 941 Trade names (b) 8,400 (3,100) 5,300 Outsource contract costs 16,814 (14,486) 2,328 Internally developed software 49,108 (27,812) 21,296 Assembled workforce 4,473 (3,355) 1,118 Purchased software 26,749 (5,350) 21,399 Intangibles, net $ 702,338 $ (457,799) $ 244,539 (a) Amounts include intangible assets acquired in business combinations and asset acquisitions. (b) The carrying amount of trade names for 2022 and 2021 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at March 31, 2022 represents indefinite-lived intangible asset. |
Schedule of goodwill by reporting segment | Balances as at January 1, 2021 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2021 (a) ITPS $ 254,130 $ — $ (825) $ — $ (633) $ 252,672 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 359,781 $ — $ (825) $ — $ (633) $ 358,323 Balances as at January 1, 2022 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at March 31, 2022 (a) ITPS $ 252,672 $ — $ — $ — $ (112) $ 252,560 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ — $ (112) $ 358,211 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $316.5 million as at March 31, 2022 and December 31, 2021; and $317.5 million as at December 31, 2020. Accumulated impairment relating to LLPS is $243.4 million as at March 31, 2022, December 31, 2021 and December 31, 2020. |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Long-Term Debt and Credit Facilities | |
Schedule of outstanding long-term debt instruments | March 31, December 31, 2022 2021 Other (a) $ 29,804 29,296 Term loan under first lien credit agreement (b) 85,085 89,585 Senior secured 2023 notes (c) 22,651 22,616 Senior secured 2026 notes (d) 885,725 801,306 Secured borrowings under BRCC Facility 92,325 115,000 Secured borrowings under Securitization Facility 91,947 91,947 Revolver — 99,477 Total debt 1,207,537 1,249,227 Less: Current portion of long-term debt (138,664) (144,828) Long-term debt, net of current maturities $ 1,068,873 $ 1,104,399 (a) Other debt represents outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company. (b) Net of unamortized original issue discount and debt issuance costs of $0.6 million and $2.3 million as of March 31, 2022 and $0.8 million and $2.8 million as of December 31, 2021. (c) Net of unamortized original issue discount and debt issuance costs of $0.1 million and less than $0.1 million as of March 31, 2022 and $0.2 million and $0.1 million as of December 31, 2021. (d) Net of unamortized net original issue discount and debt issuance costs of $26.7 million and $14.0 million as of March 31, 2022; and unamortized net debt exchange premium and carried forward debt issuance costs of $15.4 million and $9.0 million as of December 31, 2021 . |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Employee Benefit Plans | |
Schedule of components of the net periodic benefit cost | Three Months Ended March 31, 2022 2021 Service cost $ 16 $ 19 Interest cost 517 424 Expected return on plan assets (772) (605) Amortization: Amortization of prior service cost 56 45 Amortization of net loss 688 838 Net periodic benefit cost $ 505 $ 721 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurement | |
Schedule of fair value of financial instruments | Carrying Fair Fair Value Measurements As of March 31, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,068,873 $ 616,269 $ — $ 616,269 $ — True-up guarantee liability 23,585 23,585 — — 23,585 Nonrecurring assets and liabilities: Goodwill 358,211 358,211 — — 358,211 Carrying Fair Fair Value Measurements As of December 31, 2021 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,104,399 $ 895,615 $ — $ 895,615 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Summary of the status of restricted stock units | Average Weighted Remaining Number Average Grant Contractual Life Aggregate of Units Date Fair Value (Years) Intrinsic Value Outstanding Balance as of December 31, 2021 1,369,008 $ 1.75 0.11 $ 2,393 Granted — — Forfeited — — Vested (1,283,507) (1.73) Outstanding Balance as of March 31, 2022 85,501 $ 2.02 0.51 $ 172 |
Schedule of stock option activity | Average Weighted Weighted Remaining Average Grant Average Vesting Period Aggregate Outstanding Date Fair Value Exercise Price (Years) Intrinsic Value (2) Outstanding Balance as of December 31, 2021 1,445,299 $ 5.63 $ 11.78 0.69 $ — Granted — — Exercised — — Forfeited (24,933) (5.60) Expired — — Outstanding Balance as of March 31, 2022 (1) 1,420,366 $ 5.63 $ 11.77 0.55 $ — (1) 542,813 of the outstanding options are exercisable as of March 31, 2022. (2) Exercise prices of all of the outstanding options as of March 31, 2022 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value is zero. |
Summary of activity for the market performances of RSU | Weighted Average Weighted Period Over Number Average Which Expected of Units Fair Value to be Recognized Outstanding Balance as of December 31, 2021 8,500,000 $ 0.46 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of March 31, 2022 8,500,000 $ 0.46 2.98 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Schedule of sales of shares of Common Stock | Supplement Period Number of Shares Sold Weighted Average Price Per Share Gross Proceeds Net Proceeds Prospectus supplement dated May 27, 2021 with an aggregate offering price of up to $100.0 million (“Common ATM Program–1”) May 28, 2021 and through July 1, 2021 49,423,706 $2.008 $99.3 million $95.7 million Prospectus supplement dated June 30, 2021 with an aggregate offering price of up to $150.0 million (“Common ATM Program–2”) June 30, 2021 and through September 2, 2021 57,580,463 $2.603 $149.9 million $144.4 million Prospectus supplement dated September 30, 2021 with an aggregate offering price of up to $250.0 million (“Common ATM Program–3”) October 6, 2021 through March 31, 2022 334,875,948 $0.747 $250.0 million $241.0 million |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related-Party Transactions | |
Schedule of payable and receivable balances with affiliates | March 31, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 691 $ — $ 708 $ — Rule 14 — 1,466 — 1,483 HGM 28 — 7 — Oakana — 9 — 1 $ 719 $ 1,475 $ 715 $ 1,484 |
Segment and Geographic Area I_2
Segment and Geographic Area Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment and Geographic Area Information | |
Schedule of reconciliation of segment profit to net loss before income taxes by segment information | Three months ended March 31, 2022 ITPS HS LLPS Total Revenue $ 205,007 $ 56,596 $ 17,795 $ 279,398 Cost of revenue (exclusive of depreciation and amortization) 163,586 46,731 13,187 223,504 Segment profit 41,421 9,865 4,608 55,894 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,040 Depreciation and amortization 18,212 Related party expense 1,987 Interest expense, net 39,760 Debt modification and extinguishment costs (gain), net 884 Sundry expense, net 307 Other expense, net 6,159 Net loss before income taxes $ (54,455) Three months ended March 31, 2021 ITPS HS LLPS Total Revenue $ 231,875 $ 51,093 $ 17,088 $ 300,056 Cost of revenue (exclusive of depreciation and amortization) 185,502 35,818 11,267 232,587 Segment profit 46,373 15,275 5,821 67,469 Selling, general and administrative expenses (exclusive of depreciation and amortization) 41,885 Depreciation and amortization 19,599 Related party expense 1,707 Interest expense, net 43,131 Sundry expense, net 213 Other expense, net 152 Net loss before income taxes $ (39,218) |
General (Details)
General (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Oct. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Estimated annual interest rate savings | $ 6 | |
Proceeds to be raised | 174.6 | |
Shelf Registration Filed | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Additonal funds to be raised | 1,000 | $ 500 |
Universal Shelf Registration | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Additonal funds to be raised | 500 | |
PNC Bank Commitment | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Maximum borrowing capacity | 150 | |
BRCC Facility | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Past amounts raised | 500 | |
Maximum borrowing capacity | 51 | |
BRCC Facility | Senior secured revolving facility | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Maximum borrowing capacity | $ 51 |
General - Net Loss per Share (D
General - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 18, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Net loss per share | ||||
Common Stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 10,005,866 | 2,278,365 | ||
Net loss attributable to common stockholders | $ (57,895) | $ (38,304) | ||
Weighted average common shares outstanding - basic | 343,732,970 | 50,646,482 | ||
Weighted average common shares outstanding - diluted | 343,732,970 | 50,646,482 | ||
Basic (in dollars per share) | $ (0.17) | $ (0.76) | ||
Diluted (in dollars per share) | $ (0.17) | $ (0.76) | ||
Series A Preferred Stock | ||||
Net loss per share | ||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 1,341,917 | |||
Series B Preferred Stock | ||||
Net loss per share | ||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 18,066,582 | |||
Warrant | ||||
Net loss per share | ||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 35,000,000 | |||
Warrant | Private Placement | ||||
Net loss per share | ||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 9,731,819 |
Significant Accounting Polici_4
Significant Accounting Policies - Disaggregation of Revenues (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Disaggregation of Revenues | ||
Number of segments | segment | 3 | |
Revenue | $ 279,398 | $ 300,056 |
U.S.A. | ||
Disaggregation of Revenues | ||
Revenue | 222,735 | 241,105 |
EMEA | ||
Disaggregation of Revenues | ||
Revenue | 51,978 | 54,209 |
Other. | ||
Disaggregation of Revenues | ||
Revenue | 4,685 | 4,742 |
ITPS | ||
Disaggregation of Revenues | ||
Revenue | 205,007 | 231,875 |
ITPS | U.S.A. | ||
Disaggregation of Revenues | ||
Revenue | 148,344 | 172,924 |
ITPS | EMEA | ||
Disaggregation of Revenues | ||
Revenue | 51,978 | 54,209 |
ITPS | Other. | ||
Disaggregation of Revenues | ||
Revenue | 4,685 | 4,742 |
HS | ||
Disaggregation of Revenues | ||
Revenue | 56,596 | 51,093 |
HS | U.S.A. | ||
Disaggregation of Revenues | ||
Revenue | 56,596 | 51,093 |
LLPS | ||
Disaggregation of Revenues | ||
Revenue | 17,795 | 17,088 |
LLPS | U.S.A. | ||
Disaggregation of Revenues | ||
Revenue | $ 17,795 | $ 17,088 |
Significant Accounting Polici_5
Significant Accounting Policies - Contract Balances (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)category | Dec. 31, 2021USD ($) | |
Significant Accounting Policies | ||
Accounts receivable, net | $ 189,585 | $ 184,102 |
Deferred revenues | 19,150 | 17,518 |
Customer deposits | 16,780 | 17,707 |
Costs to obtain and fulfill a contract | 2,175 | 2,328 |
Unbilled receivables, net | 28,500 | $ 22,600 |
Revenue recognized from deferred revenue | 8,900 | |
Amortization of contract costs | $ 300 | |
Practical expedient on incremental costs of obtaining contracts | true | |
Number of principal categories | category | 2 |
Significant Accounting Polici_6
Significant Accounting Policies - Performance Obligations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Significant Accounting Policies | |
Contracts with an original expected length | true |
Remainder of 2022 | $ 35,014 |
2023 | 35,725 |
2024 | 31,152 |
2025 | 28,316 |
2026 | 570 |
Total | $ 130,777 |
Intangibles Assets and Goodwi_3
Intangibles Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Intangibles | ||
Gross Carrying Amount | $ 703,258 | $ 702,338 |
Accumulated Amortization | (469,563) | (457,799) |
Intangible Asset, net | 233,695 | 244,539 |
Carrying amount of indefinite-lived trade names which are not amortizable | 5,300 | |
Customer relationships | ||
Intangibles | ||
Gross Carrying Amount | 508,258 | 508,241 |
Accumulated Amortization | (324,944) | (316,084) |
Intangible Asset, net | 183,314 | 192,157 |
Developed technology | ||
Intangibles | ||
Gross Carrying Amount | 88,553 | 88,553 |
Accumulated Amortization | (87,737) | (87,612) |
Intangible Asset, net | 816 | 941 |
Trade names | ||
Intangibles | ||
Gross Carrying Amount | 8,425 | 8,400 |
Accumulated Amortization | (3,100) | (3,100) |
Intangible Asset, net | 5,325 | 5,300 |
Accumulated impairment losses | 44,100 | 44,100 |
Outsource contract costs | ||
Intangibles | ||
Gross Carrying Amount | 16,941 | 16,814 |
Accumulated Amortization | (14,765) | (14,486) |
Intangible Asset, net | 2,176 | 2,328 |
Internally developed software | ||
Intangibles | ||
Gross Carrying Amount | 49,859 | 49,108 |
Accumulated Amortization | (29,587) | (27,812) |
Intangible Asset, net | 20,272 | 21,296 |
Assembled workforce | ||
Intangibles | ||
Gross Carrying Amount | 4,473 | 4,473 |
Accumulated Amortization | (3,634) | (3,355) |
Intangible Asset, net | 839 | 1,118 |
Purchased software | ||
Intangibles | ||
Gross Carrying Amount | 26,749 | 26,749 |
Accumulated Amortization | (5,796) | (5,350) |
Intangible Asset, net | $ 20,953 | $ 21,399 |
Intangibles Assets and Goodwi_4
Intangibles Assets and Goodwill - Goodwill (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)segment | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Goodwill | |||
Number of segments | segment | 3 | ||
Beginning of Year Balance | $ 358,323 | $ 359,781 | |
Deletions | (825) | ||
Currency Translation Adjustments | (112) | (633) | |
End of Year Balance | 358,211 | 358,323 | |
ITPS | |||
Goodwill | |||
Beginning of Year Balance | 252,672 | 254,130 | |
Deletions | (825) | ||
Currency Translation Adjustments | (112) | (633) | |
End of Year Balance | 252,560 | 252,672 | |
Accumulated impairment losses | 316,500 | 316,500 | $ 317,500 |
HS | |||
Goodwill | |||
Beginning of Year Balance | 86,786 | 86,786 | |
End of Year Balance | 86,786 | 86,786 | |
LLPS | |||
Goodwill | |||
Beginning of Year Balance | 18,865 | 18,865 | |
End of Year Balance | 18,865 | 18,865 | |
Accumulated impairment losses | $ 243,400 | $ 243,400 | $ 243,400 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities (Details) | Mar. 18, 2022USD ($) | Mar. 07, 2022USD ($) | Dec. 09, 2021USD ($) | Oct. 27, 2021USD ($) | Mar. 31, 2022USD ($)installment | Dec. 31, 2021USD ($) | Dec. 07, 2021USD ($) | Nov. 17, 2021USD ($) | Mar. 31, 2021USD ($) | Jul. 12, 2017USD ($) |
Long-Term Debt and Credit Facilities. | ||||||||||
Debt repayment in cash | $ 225,000,000 | $ 225,000,000 | ||||||||
Public exchange in cash | 900 | |||||||||
Debt instrument cash exchanged | 84,300,000 | |||||||||
Debt instrument face amount exchanged | 912,660,000 | |||||||||
Outstanding debt | $ 1,207,537,000 | $ 1,249,227,000 | ||||||||
Debt instruments exit fee | (884,000) | |||||||||
Secured 2023 notes | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Principal amount | $ 1,000,000,000 | |||||||||
Interest rate (in percent) | 10.00% | |||||||||
Debt instrument principle amount denomination | $ 1,000 | |||||||||
Debt instrument face amount exchanged percentage | 91.30% | |||||||||
Debt instrument face amount exchanged outstanding | 22,800,000 | |||||||||
Secured 2026 notes | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Principal amount | $ 127,800,000 | 81,500,000 | 790,500,000 | |||||||
Net proceeds from 2026 notes | $ 49,800,000 | |||||||||
Interest rate (in percent) | 11.50% | 11.50% | ||||||||
Debt instrument principle amount denomination | $ 1,000 | |||||||||
Debt instrument face amount exchanged | $ 662,660,000 | |||||||||
Outstanding debt | 795,000,000 | |||||||||
Line of credit facility on notes | $ 50,000,000 | |||||||||
Debt principal amount issued by subsidiary one, as remaining collateral for settlement obligation | $ 33,400,000 | |||||||||
Debt principal amount issued by subsidiary two, as remaining collateral for settlement obligation | 10,000,000 | |||||||||
Debt instruments accrued additional true up liability | 6,200,000 | |||||||||
BRCC Facility | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Principal amount | $ 115,000,000 | $ 75,000,000 | ||||||||
Interest rate (in percent) | 11.50% | |||||||||
Outstanding debt | 92,325,000 | $ 115,000,000 | ||||||||
Debt instrument, repayment made In cash | 22,700,000 | |||||||||
Maximum borrowing capacity | $ 51,000,000 | |||||||||
Availability under credit facility | $ 10,000,000 | |||||||||
Number of installments | installment | 12 | |||||||||
Debt instruments exit fee | $ 700,000 | |||||||||
Senior secured term loan | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Outstanding debt | $ 212,100,000 | 88,100,000 | ||||||||
Exchange Notes | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Debt instruments liability recognized on original issuance discount | $ 17,400,000 | |||||||||
Revolving Loan Exchange and Prepayment Agreement | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Outstanding revolving credit facility | $ 100,000,000 | |||||||||
Line of credit facility cash | 50,000,000 | |||||||||
Write off of previously recognized debt issuance costs | 200,000 | |||||||||
Revolving Loan Exchange and Prepayment Agreement | Secured 2026 notes | ||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||
Line of credit facility on notes | $ 50,000,000 |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Senior Credit Facilities (Details) - USD ($) $ in Millions | Jul. 12, 2017 | Dec. 31, 2021 |
Senior secured term loan | ||
Long-Term Debt and Credit Facilities. | ||
Debt Instrument, Face Amount | $ 350 | |
Original issue discount | $ 7 | |
Principal percentage of each of first eight payments (as a percent) | 0.60% | |
Principal percentage of each payment thereafter (as a percent) | 1.30% | |
Senior secured term loan | LIBOR | ||
Long-Term Debt and Credit Facilities. | ||
Applicable margin rate | 7.50% | |
Floor interest rate | 1.00% | |
Senior secured term loan | Base rate | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 6.50% | |
Senior secured revolving facility | ||
Long-Term Debt and Credit Facilities. | ||
Maximum borrowing capacity | $ 100 | |
Letters of credit outstanding | $ 0.5 | |
Credit facility drawn | $ 100 | |
Senior secured revolving facility | LIBOR | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 7.00% | |
Senior secured revolving facility | Base rate | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 6.00% |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands | Jul. 13, 2018 | Mar. 31, 2022 | Dec. 31, 2021 |
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 1,207,537 | $ 1,249,227 | |
First Amendment | |||
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 343,400 | ||
Reduction in interest rate (in percentage) | 100.00% | ||
First Amendment | Federal funds rate | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 0.50% | ||
First Amendment | LIBOR | |||
Long-Term Debt and Credit Facilities. | |||
Floor interest rate | 1.00% | ||
Variable interest rate (as a percent) | 6.50% | ||
First Amendment | One-month adjusted LIBOR | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 1.00% | ||
First Amendment | Base rate | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 5.50% | ||
Senior secured revolving facility | |||
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 343,400 | ||
Maximum debt issuance costs for new lenders exceeded 10% test | 100 | ||
Senior secured revolving facility | First Amendment | |||
Long-Term Debt and Credit Facilities. | |||
Debt issuance costs | 1,000 | ||
Amortization expense of debt issuance costs | 1,000 | ||
Write off of previously recognized debt issuance costs | $ 100 |
Long-Term Debt and Credit Fac_6
Long-Term Debt and Credit Facilities - 2018 and 2019 Incremental Term Loan (Details) - USD ($) $ in Millions | Apr. 16, 2019 | Jul. 13, 2018 | Dec. 31, 2019 |
Long-Term Debt and Credit Facilities. | |||
Proceeds from incremental term loans | $ 30 | $ 30 | |
Repricing Term Loan | |||
Long-Term Debt and Credit Facilities. | |||
Debt extinguishment costs | $ 1.4 |
Long-Term Debt and Credit Fac_7
Long-Term Debt and Credit Facilities - Repurchases (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Senior secured notes | |
Repurchase of principal amount | $ 64.5 |
Net cash consideration | 48.4 |
Senior secured term loan | |
Repurchase of principal amount | 40 |
Net cash consideration | $ 22.8 |
Long-Term Debt and Credit Fac_8
Long-Term Debt and Credit Facilities - Securitization (Details) - USD ($) $ in Thousands | Dec. 17, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2022 | May 18, 2020 |
Proceeds from initial borrowings | $ 3,000 | |||||
A/R Facility | ||||||
Accounts Receivable from Securitization | $ 160,000 | |||||
Minimum liquidity for A/R facility | $ 35,000 | |||||
Forbearance fee | $ 5,000 | |||||
Securitization Facility | ||||||
Accounts Receivable from Securitization | $ 145,000 | |||||
Accounts Receivable, Securitization, Term | 5 years | |||||
Variable interest rate (as a percent) | 8.75% | |||||
Available facility amount | $ 91,900 | |||||
Initial funding supported by receivables | $ 92,000 | |||||
Further funding supported by inventory and intellectual property | 53,000 | |||||
Proceeds from initial borrowings | 92,000 | |||||
Proceeds from additional borrowings | $ 53,000 | |||||
Proceeds from issuance of debt used for repayment of previous debt | $ 83,000 | |||||
Securitization Facility | Federal funds rate | ||||||
Variable interest rate (as a percent) | 0.50% | |||||
Securitization Facility | One-month adjusted LIBOR | ||||||
Variable interest rate (as a percent) | 1.00% | |||||
Securitization Facility | LIBOR | ||||||
Variable interest rate (as a percent) | 9.75% |
Long-Term Debt and Credit Fac_9
Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 1,207,537 | $ 1,249,227 |
Less: Current portion of long-term debt | (138,664) | (144,828) |
Long-term debt, net of current maturities | 1,068,873 | 1,104,399 |
Other | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 29,804 | 29,296 |
First lien credit agreement | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 85,085 | 89,585 |
Debt discount | 600 | 800 |
Unamortized debt issuance costs | 2,300 | 2,800 |
Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Debt discount | 100 | 200 |
Unamortized debt issuance costs | 100 | 100 |
Revolver | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 99,477 | |
Securitization Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 91,947 | 91,947 |
Secured 2023 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 22,651 | 22,616 |
Secured 2026 notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 795,000 | |
Debt instrument, redemption price percentage | 100.00% | |
Debt instrument redemption price premium, percentage on principle amount | 1.00% | |
Debt Instrument Redemption price premium, basis spread on variable rate | 50.00% | |
Secured 2026 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 885,725 | 801,306 |
Debt discount | 26,700 | |
Debt exchange premium | 15,400 | |
Unamortized debt issuance costs | 14,000 | 9,000 |
BRCC Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 92,325 | $ 115,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income tax (expense) benefit | $ 2,501 | $ (18) |
Annual effective tax rate | (4.60%) | 0.05% |
Statutory tax rate | 21.00% | 21.00% |
Maximum | ||
Income tax (expense) benefit | $ 100 |
Employee Benefit Plans - German
Employee Benefit Plans - Germany & UK (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
German Pension Plan | Unfunded Plan | |
Pension plans | |
Plan assets | $ 0 |
German Pension Plan | Unfunded Plan | Minimum | |
Pension plans | |
Qualifying period | 10 years |
U.K. Pension Plan | Minimum | |
Pension plans | |
Minimum required years prior to retirement for eligibility | 3 years |
Asterion Pension Plan | Minimum | |
Pension plans | |
Minimum required years prior to retirement for eligibility | 3 years |
Norway Pension Plan | Minimum | |
Pension plans | |
Minimum required years prior to retirement for eligibility | 3 years |
Employee Benefit Plans - Tax Ef
Employee Benefit Plans - Tax Effect on Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs | ||
Net actuarial loss | $ 10.6 | $ 10.9 |
Deferred tax benefit | $ 2 | $ 2 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Net periodic benefit cost | ||
Employer contributions | $ 700 | $ 900 |
Pension [Member] | ||
Net periodic benefit cost | ||
Service cost | 16 | 19 |
Interest cost | 517 | 424 |
Expected return on plan assets | (772) | (605) |
Amortization of prior service cost | 56 | 45 |
Amortization of net loss | (688) | (838) |
Net periodic benefit cost | $ 505 | $ 721 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, € in Millions | May 28, 2021USD ($) | Mar. 26, 2020USD ($) | Jan. 30, 2020$ / shares | Sep. 21, 2017$ / sharesshares | Nov. 30, 2020USD ($) | Sep. 30, 2020EUR (€) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) |
Commitments and Contingencies | ||||||||
Amount awarded to petitioners | $ 63,400,000 | |||||||
Accrued liability | $ 24,500,000 | $ 63,400,000 | ||||||
Paid of accrued amount for settlement | 40,000,000 | |||||||
Adverse Arbitration Order | ||||||||
Commitments and Contingencies | ||||||||
Accrued liability | $ 2,900,000 | |||||||
Amount awarded to customer | $ 13,000,000 | |||||||
Amount paid towards judgement | $ 8,800,000 | |||||||
Earnout sought | € | € 10 | |||||||
SourceHOV | Petitioners | ||||||||
Commitments and Contingencies | ||||||||
Court determined fair value of stock at time of business combination (per share) | $ / shares | $ 4,591 | |||||||
Amount awarded to petitioners | $ 57,698,426 | |||||||
SourceHOV | Minimum | Petitioners | ||||||||
Commitments and Contingencies | ||||||||
Argued fair value per share | $ / shares | $ 1,633.85 | |||||||
SourceHOV | Maximum | Petitioners | ||||||||
Commitments and Contingencies | ||||||||
Argued fair value per share | $ / shares | $ 5,079.28 | |||||||
SourceHOV | Fair value guarantee | Common Stock | ||||||||
Commitments and Contingencies | ||||||||
Number of shares owned | shares | 10,304 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 358,211 | $ 358,323 | $ 359,781 |
Senior secured term loan | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 70.00% | 70.00% | |
Secured 2023 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 70.00% | 70.00% | |
Secured 2026 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 50.00% | 50.00% | |
Carrying Amount | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | $ 1,068,873 | $ 1,104,399 | |
True-up guarantee liability | 23,585 | ||
Carrying Amount | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 358,211 | 358,323 | |
Fair Value | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 616,269 | 895,615 | |
True-up guarantee liability | 23,585 | ||
Fair Value | Recurring assets and liabilities | Level 2 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 616,269 | 895,615 | |
Fair Value | Recurring assets and liabilities | Level 3 | |||
Carrying amounts and estimated fair values of financial instruments | |||
True-up guarantee liability | 23,585 | ||
Fair Value | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 358,211 | 358,323 | |
Fair Value | Nonrecurring assets and liabilities | Level 3 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 358,211 | $ 358,323 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan (Details) - shares | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 20, 2017 |
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 1,600,000,000 | 1,600,000,000 | |
2018 Plan | |||
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 17,848,076 | 2,774,589 | |
2018 Plan | Maximum | |||
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 2,774,588 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Grants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation | ||
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018 | 239,847 | |
Payment, Tax Withholding, Share-based Payment Arrangement | $ 195 | |
RSU's | 2018 Plan | ||
Number of Units | ||
Outstanding Balance as of December 31, 2021 | 1,369,008 | |
Shares vested | (1,283,507) | |
Outstanding Balance as of March 31, 2022 | 85,501 | 1,369,008 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 1.75 | |
Shares vested | (1.73) | |
Balance at the end of the period | $ 2.02 | $ 1.75 |
Average Remaining Contractual Life (Years) | ||
Weighted average remaining contractual life (in years) | 6 months 3 days | 1 month 9 days |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value outstanding | $ 172 | $ 2,393 |
RSU's | 2018 Plan | Minimum | ||
Stock-Based Compensation | ||
Vesting period | 1 year | |
RSU's | 2018 Plan | Maximum | ||
Stock-Based Compensation | ||
Vesting period | 2 years |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 18, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Unrecognized compensation expense | ||||
Total compensation expense | $ 0.2 | |||
2018 Plan | ||||
Unrecognized compensation expense | ||||
Unrecognized compensation expense | 0.8 | |||
2018 Plan | Selling, general and administrative expense | ||||
Unrecognized compensation expense | ||||
Total compensation expense | $ 0.1 | $ 0.4 | ||
Stock options | ||||
Outstanding | ||||
Exercised (in shares) | 542,813 | |||
Stock options | 2018 Plan | ||||
Stock-based compensation | ||||
Minimum fair market value per share of underlying stock used to determine option grant price, as a percent | 100.00% | |||
Expiration of stock options | 10 years | |||
Outstanding | ||||
Outstanding Balance at beginning of the year (in shares) | 1,445,299 | |||
Forfeited (in shares) | (24,933) | |||
Outstanding Balance at the end of the year (in shares) | 1,420,366 | 1,445,299 | ||
Weighted average Grant Date fair Value | ||||
Outstanding balance at the beginning of the period | $ 5.63 | |||
Forfeited | (5.60) | |||
Outstanding balance at the end of the period | 5.63 | $ 5.63 | ||
Weighted Average Exercise Price | ||||
Outstanding Balance at the beginning of the year | 11.78 | |||
Outstanding Balance at the end of the year (in shares) | $ 11.77 | $ 11.78 | ||
Additional information | ||||
Average Remaining Vesting Period | 6 months 18 days | 8 months 8 days | ||
Aggregate Intrinsic Value | $ 0 | |||
Stock options | 2018 Plan | Minimum | ||||
Stock-based compensation | ||||
Vesting period | 2 years | |||
Stock options | 2018 Plan | Maximum | ||||
Stock-based compensation | ||||
Vesting period | 4 years |
Stock-Based Compensation - Mark
Stock-Based Compensation - Market Performance Units (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 14, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 0.2 | ||
Market Performance Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of the awards | $ 0.46 | $ 0.46 | |
Unrecognized compensation expense | $ 2.4 | ||
Market Performance Units | Share Price (Less or equal to $2.00 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 0.00% | ||
Share Price | $ 2 | ||
Market Performance Units | Tranche 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50.00% | ||
Share Price | $ 10 | ||
Number of consecutive trading days | 60 days | ||
Number of non-consecutive trading days | 90 days | ||
Number of trading days under arrangement | 180 days | ||
Fair value of the awards | 1.48 | ||
Modification date fair value | 0.44 | ||
Market Performance Units | Tranche 1 | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | 2 | ||
Market Performance Units | Tranche 1 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 10 | ||
Market Performance Units | Tranche 1 | Share Price ( Equal to or Greater than $10.00 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100.00% | ||
Share Price | $ 10 | ||
Market Performance Units | Tranche 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50.00% | ||
Share Price | $ 20 | $ 20 | |
Number of consecutive trading days | 60 days | ||
Number of non-consecutive trading days | 90 days | ||
Number of trading days under arrangement | 180 days | ||
Consideration for forfeited unearned shares | $ 0 | ||
Fair value of the awards | $ 1.51 | ||
Modification date fair value | $ 0.47 | ||
Market Performance Units | Tranche 2 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 20 | ||
Market Performance Units | Tranche 2 | Share Price (Greater or equal to $20.00 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of activity for the Market Performance RSUs (Details) - Market Performance Units - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of Units | ||
Outstanding Balance as of December 31, 2021 | 8,500,000 | |
Outstanding Balance as of March 31, 2022 | 8,500,000 | 8,500,000 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 0.46 | |
Balance at the end of the period | $ 0.46 | $ 0.46 |
Weighted Average Period Over Which Expected to be Recognized | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 2 years 11 months 23 days | 2 years 11 months 23 days |
Stockholders Equity - Common St
Stockholders Equity - Common Stock (Details) | 3 Months Ended | ||
Mar. 31, 2022Voteshares | Mar. 31, 2021shares | Dec. 31, 2021shares | |
Common Stock | |||
Common Stock, shares authorized | 1,600,000,000 | 1,600,000,000 | |
Number of voting rights entitled for each share of Common Stock held | Vote | 1 | ||
Common stock, shares outstanding | 484,557,092 | 265,194,961 | |
Series A Preferred Stock | |||
Common Stock | |||
Preferred stock converted to Common Stock (in shares) | (510,681) |
Stockholders Equity - Sales of
Stockholders Equity - Sales of Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Class of Stock [Line Items] | ||
Aggregate offering price | $ 114,533 | $ 25,080 |
Common ATM Program-1 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 100,000 | |
Number of Shares Sold | 49,423,706 | |
Weighted Average Price Per Share | $ 2.008 | |
Gross proceeds | $ 99,300 | |
Net proceeds | 95,700 | |
Common ATM Program-2 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 150,000 | |
Number of Shares Sold | 57,580,463 | |
Weighted Average Price Per Share | $ 2.603 | |
Gross proceeds | $ 149,900 | |
Net proceeds | 144,400 | |
Common ATM Program-3 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 250,000 | |
Number of Shares Sold | 334,875,948 | |
Weighted Average Price Per Share | $ 0.747 | |
Gross proceeds | $ 250,000 | |
Net proceeds | $ 241,000 |
Stockholders Equity - Preferred
Stockholders Equity - Preferred Stock (Details) | Mar. 23, 2022USD ($) | Feb. 24, 2022$ / sharesshares | Mar. 31, 2022USD ($)director$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 11, 2022USD ($)shares | Mar. 10, 2022shares | Dec. 31, 2021$ / sharesshares |
Preferred Stock | |||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Series A Preferred Stock | |||||||
Preferred Stock | |||||||
Preferred stock, shares outstanding | 2,778,111 | 2,778,111 | |||||
Preferred Stock, cumulative dividends rate (in percentage) | 10.00% | ||||||
Accumulated preferred stock, Dividends | $ | $ 900,000 | $ 900,000 | |||||
Conversion of Series A Preferred stock to common shares | (510,681) | ||||||
Conversion of shares (in shares) | 223,413 | ||||||
Additional common stock issuable upon conversion of remaining convertible shares | 1,341,917 | ||||||
Cumulative accrued but unpaid dividends | $ | $ 13,200,000 | ||||||
Per share average of cumualtive preferred dividends (in dolars per share) | $ / shares | $ 0.3 | $ (0.3) | |||||
Reverse stock split | 0.4830 | ||||||
Series B Preferred Stock | |||||||
Preferred Stock | |||||||
Preferred stock, shares authorized | 5,000,000 | ||||||
Preferred stock, shares outstanding | 900,328 | 0 | |||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||
Conversion of Series A Preferred stock to common shares | 900,328 | ||||||
Conversion of shares (in shares) | 18,066,582 | ||||||
Third anniversary expected liquidation preference (in dollars per share) | $ / shares | $ 25 | ||||||
Per share average of cumulative preferred dividends (in dollars per share) | $ / shares | $ 0.08 | ||||||
Reverse stock split | 20.0667 | ||||||
Number of common stock exchanged for each preferred share | 20 | ||||||
Number of common stock tendered | 18,006,560 | ||||||
Issuances of preferred stock | $ | $ 900,328 | ||||||
Preferred stock cumulative dividend | 6.00% | ||||||
Number of directors | director | 1 | ||||||
Number of directors in arrears | director | 8 | ||||||
Maximum | Series B Preferred Stock | |||||||
Preferred Stock | |||||||
Dividends, Preferred Stock | $ | $ 100,000 | $ 100,000 | |||||
Common Stock | Series A Preferred Stock | |||||||
Preferred Stock | |||||||
Accumulated preferred stock, Dividends | $ | $ 1,800,000 | ||||||
Common Stock | Common Stock | |||||||
Preferred Stock | |||||||
Accumulated preferred stock, Dividends | $ | $ 900,000 |
Stockholders Equity - Treasury
Stockholders Equity - Treasury Stock (Details) - shares | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2020 | Nov. 08, 2017 | |
Stockholders' Equity | |||
Treasury stock, shares authorized | 1,666,667 | ||
Shares repurchased (in shares) | 929,049 | ||
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares) | 1,523,578 |
Stockholders Equity - Warrants
Stockholders Equity - Warrants (Details) $ / shares in Units, $ in Millions | Mar. 15, 2021USD ($)$ / sharesshares | Mar. 31, 2022item$ / sharesshares |
Warrants | ||
Warrants outstanding | 15,565,152 | |
Number of Common Stock each warrant may purchase | 0.167 | |
Exercise price of warrant per one sixth of Common Stock | $ / shares | $ 5.75 | |
Exercise price of warrant per one Common Stock (in US$ per share) | $ / shares | 34.50 | |
Warrant redemption price (in US$ per share) | $ / shares | $ 0.01 | |
Minimum written notice period of redemption | 30 days | |
Minimum common stock sales price for exercise of redemption right (in US$ per share) | $ / shares | $ 72 | |
Minimum trading days within 30-day period at $72 per share for exercise of redemption right | item | 20 | |
Trading day period for exercise of redemption right | 30 days | |
Period of the 30-day period prior to notice of redemption | 3 days | |
Period of current registration effectivity prior to 30-day trading period | 5 days | |
Initial Public Offering [Member] | ||
Warrants | ||
Warrants outstanding | 35,000,000 | |
Number of Common Stock each warrant may purchase | 0.167 | |
Private Placement | ||
Warrants | ||
Warrants outstanding | 9,731,819 | |
Exercise price of warrant per one Common Stock (in US$ per share) | $ / shares | $ 4 | |
Purchase of common stock, share | 9,731,819 | |
Common stock issued price | $ / shares | $ 2.75 | |
Gross proceeds from offering expected | $ | $ 26.8 | |
Warrant | ||
Warrants | ||
Number of warrants separated from the original unit | 34,986,302 | |
Number of warrants not separated from the original unit | 13,698 | |
Warrant | Initial Public Offering [Member] | ||
Warrants | ||
Units issued | 35,000,000 | |
Common stock included in units | 1 | |
Warrants included in units | 1 | |
Warrant | Private Placement | ||
Warrants | ||
Placement fee Percentage on Gross proceeds | 5.50% |
Related-Party Transactions - Re
Related-Party Transactions - Relationship with HandsOn Global Management (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)agreement | Mar. 31, 2021USD ($) | Dec. 31, 2016 | |
Related-Party Transactions | |||
Amount of related party transaction | $ 1,987 | $ 1,707 | |
Related party expense | $ 1,987 | 1,707 | |
HGM | |||
Related-Party Transactions | |||
Ownership percentage | 2.40% | ||
HGM | Travel Expense | |||
Related-Party Transactions | |||
Amount of related party transaction | $ 100 | 100 | |
HGM | Master Service Agreement | |||
Related-Party Transactions | |||
Number of master agreements | agreement | 10 | ||
Entities affiliated with HGM managed funds | Master Service Agreement | |||
Related-Party Transactions | |||
Revenue share percentage | 25.00% | ||
Affiliate of largest stockholder | |||
Related-Party Transactions | |||
Rental expenses | $ 100 | 100 | |
HOV Services, Ltd | Data Capture And Technology Services | Cost of revenue | |||
Related-Party Transactions | |||
Amount of related party transaction | 300 | 300 | |
SourceHOV | Master Service Agreement | |||
Related-Party Transactions | |||
Revenue share percentage | 75.00% | ||
SourceHOV | Entities affiliated with HGM managed funds | Master Service Agreement | |||
Related-Party Transactions | |||
Related party expense | $ 1,500 | $ 1,100 |
Related-Party Transactions - Co
Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related-Party Transactions | ||
Related party expense | $ 1,987 | $ 1,707 |
Consulting Services | Oakana Holdings Inc | Maximum | ||
Related-Party Transactions | ||
Related party expense | $ 100 | $ 100 |
Related-Party Transactions - Su
Related-Party Transactions - Subscription Agreements (Details) - Subscription Agreements $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)directorshares | |
Related Party Transaction [Line Items] | |
Number of directors | director | 5 |
Sharon Chandha [Member] | |
Related Party Transaction [Line Items] | |
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | shares | 62,500 |
Proceeds from issuance of stock | $ | $ 0.1 |
Par Chadha [Member] | |
Related Party Transaction [Line Items] | |
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | shares | 158,730 |
Proceeds from issuance of stock | $ | $ 0.2 |
Martin Akins [Member] | |
Related Party Transaction [Line Items] | |
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | shares | 63,492 |
Proceeds from issuance of stock | $ | $ 0.1 |
J. Coley Clark [Member] | |
Related Party Transaction [Line Items] | |
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | shares | 79,365 |
Proceeds from issuance of stock | $ | $ 0.1 |
John Rexford [Member] | |
Related Party Transaction [Line Items] | |
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | shares | 39,682 |
Proceeds from issuance of stock | $ | $ 0.1 |
Related-Party Transactions - _2
Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | $ 719 | $ 715 |
Payables | 1,475 | 1,484 |
HOV Services, Ltd | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | 691 | 708 |
Rule 14, LLC | ||
Payable and Receivable Balances with Affiliates | ||
Payables | 1,466 | 1,483 |
HGM | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | 28 | 7 |
Oakana Holdings Inc | ||
Payable and Receivable Balances with Affiliates | ||
Payables | $ 9 | $ 1 |
Segment and Geographic Area I_3
Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Segment information | ||
Number of segments | segment | 3 | |
Revenue | $ 279,398 | $ 300,056 |
Cost of revenue (exclusive of depreciation and amortization) | 223,504 | 232,587 |
Segment profit | 55,894 | 67,469 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 43,040 | 41,885 |
Depreciation and amortization | 18,212 | 19,599 |
Related party expense | 1,987 | 1,707 |
Interest expense, net | 39,760 | 43,131 |
Debt modification and extinguishment costs (gain), net | 884 | |
Sundry expense, net | 307 | 213 |
Other expense, net | 6,159 | 152 |
Net loss before income taxes | (54,455) | (39,218) |
I T P S Segment [Member] | ||
Segment information | ||
Revenue | 205,007 | 231,875 |
Cost of revenue (exclusive of depreciation and amortization) | 163,586 | 185,502 |
Segment profit | 41,421 | 46,373 |
H S Segment [Member] | ||
Segment information | ||
Revenue | 56,596 | 51,093 |
Cost of revenue (exclusive of depreciation and amortization) | 46,731 | 35,818 |
Segment profit | 9,865 | 15,275 |
L L P S Segment [Member] | ||
Segment information | ||
Revenue | 17,795 | 17,088 |
Cost of revenue (exclusive of depreciation and amortization) | 13,187 | 11,267 |
Segment profit | $ 4,608 | $ 5,821 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Mar. 31, 2022 | May 09, 2022 | May 06, 2022 | Dec. 31, 2021 | Dec. 09, 2021 | Dec. 07, 2021 | Nov. 17, 2021 |
BRCC Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, repayment made In cash | $ 22.7 | |||||||
Available facility amount | 51 | |||||||
Principal amount | $ 115 | $ 75 | ||||||
Secured 2026 notes | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal amount | $ 81.5 | $ 790.5 | $ 127.8 | |||||
Subsequent Events | BRCC Facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, repayment made In cash | $ 20 | |||||||
Subsequent Events | PNC Bank Commitment | ||||||||
Subsequent Event [Line Items] | ||||||||
Available facility amount | $ 150 | |||||||
Subsequent Events | Secured 2026 notes | ||||||||
Subsequent Event [Line Items] | ||||||||
Principal amount | $ 20 |