Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 11, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 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 | 122,201,119 | |
Entity Central Index Key | 0001620179 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
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 | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 10,401 | $ 20,775 |
Restricted cash | 34,402 | 27,285 |
Accounts receivable, net of allowance for doubtful accounts of $5,930 and $6,049, respectively | 93,600 | 184,102 |
Related party receivables and prepaid expenses | 504 | 715 |
Inventories, net | 17,234 | 15,215 |
Prepaid expenses and other current assets | 28,551 | 31,799 |
Total current assets | 184,692 | 279,891 |
Property, plant and equipment, net of accumulated depreciation of $201,650 and $196,683, respectively | 68,788 | 73,449 |
Operating lease right-of-use assets, net | 44,943 | 53,937 |
Goodwill | 328,071 | 358,323 |
Intangible assets, net | 211,659 | 244,539 |
Deferred income tax assets | 1,279 | 2,109 |
Other noncurrent assets | 25,839 | 24,775 |
Total assets | 865,271 | 1,037,023 |
Current liabilities | ||
Accounts payable | 80,783 | 61,744 |
Related party payables | 1,698 | 1,484 |
Income tax payable | 1,178 | 3,551 |
Accrued liabilities | 52,795 | 113,519 |
Accrued compensation and benefits | 52,925 | 60,860 |
Accrued interest | 29,430 | 10,075 |
Customer deposits | 18,278 | 17,707 |
Deferred revenue | 15,681 | 16,617 |
Obligation for claim payment | 50,780 | 46,902 |
Current portion of finance lease liabilities | 4,902 | 6,683 |
Current portion of operating lease liabilities | 13,127 | 15,923 |
Current portion of long-term debts | 195,043 | 236,775 |
Total current liabilities | 516,620 | 591,840 |
Long-term debt, net of current maturities | 909,506 | 1,012,452 |
Finance lease liabilities, net of current portion | 7,276 | 9,156 |
Pension liabilities, net | 23,165 | 28,383 |
Deferred income tax liabilities | 14,046 | 11,594 |
Long-term income tax liabilities | 2,757 | 3,201 |
Operating lease liabilities, net of current portion | 34,573 | 41,170 |
Other long-term liabilities | 4,888 | 5,999 |
Total liabilities | 1,512,831 | 1,703,795 |
Commitments and Contingencies (Note 8) | ||
Stockholders' equity (deficit) | ||
Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 80,173,342 shares issued and 80,050,757 shares outstanding at September 30, 2022 and 13,382,333 shares issued and 13,259,748 shares outstanding at December 31, 2021 | 142 | 37 |
Additional paid in capital | 1,072,322 | 838,853 |
Less: Common Stock held in treasury, at cost; 122,585 shares at September 30, 2022 and December 31, 2021 | (10,949) | (10,949) |
Equity-based compensation | 56,676 | 56,123 |
Accumulated deficit | (1,753,865) | (1,532,428) |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustment | (2,875) | (7,463) |
Unrealized pension actuarial losses, net of tax | (9,012) | (10,946) |
Total accumulated other comprehensive loss | (11,887) | (18,409) |
Total stockholders' deficit | (647,560) | (666,772) |
Total liabilities and stockholders' deficit | 865,271 | 1,037,023 |
Series A Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock | 1 | 1 |
Series B Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for doubtful accounts | $ 5,930 | $ 6,049 |
Accumulated depreciation | $ 201,650 | $ 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 | 80,173,342 | 13,382,333 |
Common stock, shares outstanding | 80,050,757 | 13,259,748 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Treasury Stock (in shares) | 122,585 | 122,585 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,800,000 | 2,800,000 |
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 | 3,029,900 | 0 |
Preferred stock, shares outstanding | 3,029,900 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | $ 264,038 | $ 279,229 | $ 810,206 | $ 872,294 |
Cost of revenue (exclusive of depreciation and amortization) | 217,842 | 211,731 | 658,623 | 653,398 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 44,369 | 43,244 | 137,604 | 121,519 |
Depreciation and amortization | 17,737 | 19,094 | 53,942 | 58,113 |
Impairment of goodwill and other intangible assets | 29,565 | 29,565 | ||
Related party expense | 2,016 | 2,744 | 6,189 | 7,199 |
Operating profit (loss) | (47,491) | 2,416 | (75,717) | 32,065 |
Other expense (income), net: | ||||
Interest expense, net | 40,897 | 41,757 | 122,928 | 127,755 |
Debt modification and extinguishment costs (gain), net | (4,696) | (28,070) | 4,305 | (28,070) |
Sundry expense (income), net | 781 | 136 | 347 | (438) |
Other expense (income), net | (1,115) | 366 | 12,419 | 1,169 |
Net loss before income taxes | (83,358) | (11,773) | (215,716) | (68,351) |
Income tax expense | (1,924) | (1,441) | (5,721) | (3,430) |
Net loss | (85,282) | (13,214) | (221,437) | (71,781) |
Net loss attributable to common stockholders | $ (87,326) | $ (14,036) | $ (226,613) | $ (72,505) |
Basic (in dollars per share) | $ (1.38) | $ (1.86) | $ (6.41) | $ (16.49) |
Diluted (in dollars per share) | $ (1.38) | $ (1.86) | $ (6.41) | $ (16.49) |
Series A Preferred Stock | ||||
Other expense (income), net: | ||||
Cumulative dividends for Preferred Stock | $ (908) | $ (822) | $ (2,648) | $ (724) |
Series B Preferred Stock | ||||
Other expense (income), net: | ||||
Cumulative dividends for Preferred Stock | $ (1,136) | $ (2,528) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (85,282) | $ (13,214) | $ (221,437) | $ (71,781) |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | 1,978 | 99 | 4,588 | (1,245) |
Unrealized pension actuarial gains (losses), net of tax | 824 | 472 | 1,934 | 230 |
Total other comprehensive loss, net of tax | $ (82,480) | $ (12,643) | $ (214,915) | $ (72,796) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Common Stock | Preferred Stock Series A Preferred Stock | Preferred Stock Series 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 | 2,462,111 | 3,290,050 | 122,585 | |||||||
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) | 11,171 | (510,681) | ||||||||
Effect of fractional shares from Reverse Stock Split | (14) | (14) | ||||||||
Effect of Fractional shares from Reverse Stock Split (in shares) | (272) | |||||||||
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) | 486,591 | |||||||||
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 | 2,959,601 | 2,779,369 | 122,585 | |||||||
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 | 2,462,111 | 3,290,050 | 122,585 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (71,781) | |||||||||
Foreign currency translation adjustment | (1,245) | |||||||||
Net realized pension actuarial gains, net of tax | 230 | |||||||||
Ending balance at Sep. 30, 2021 | $ 26 | $ 1 | $ (10,949) | 711,893 | 53,511 | (8,664) | (16,834) | (1,461,819) | (732,835) | |
Ending balance (in shares) at Sep. 30, 2021 | 8,309,837 | 2,778,111 | 122,585 | |||||||
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 | 2,462,111 | 3,290,050 | 122,585 | |||||||
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 | 13,259,748 | 2,778,111 | 122,585 | |||||||
Beginning balance at Mar. 31, 2021 | $ 16 | $ 1 | $ (10,949) | 471,804 | 52,570 | (7,319) | (17,221) | (1,429,238) | (940,336) | |
Beginning balance (in shares) at Mar. 31, 2021 | 2,959,601 | 2,779,369 | 122,585 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (19,367) | (19,367) | ||||||||
Equity-based compensation | 593 | 593 | ||||||||
Foreign currency translation adjustment | (1,444) | (1,444) | ||||||||
Net realized pension actuarial gains, net of tax | (85) | (85) | ||||||||
Common Stock exchanged for Series B Preferred Stock (in shares) | 28 | (1,258) | ||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 1 | 17,372 | 17,373 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 560,835 | |||||||||
Ending balance at Jun. 30, 2021 | $ 17 | $ 1 | $ (10,949) | 489,176 | 53,163 | (8,763) | (17,306) | (1,448,605) | (943,266) | |
Ending balance (in shares) at Jun. 30, 2021 | 3,520,464 | 2,778,111 | 122,585 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (13,214) | (13,214) | ||||||||
Equity-based compensation | 348 | 348 | ||||||||
Foreign currency translation adjustment | 99 | 99 | ||||||||
Net realized pension actuarial gains, net of tax | 472 | 472 | ||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 9 | 222,717 | 222,726 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 4,789,373 | |||||||||
Ending balance at Sep. 30, 2021 | $ 26 | $ 1 | $ (10,949) | 711,893 | 53,511 | (8,664) | (16,834) | (1,461,819) | $ (732,835) | |
Ending balance (in shares) at Sep. 30, 2021 | 8,309,837 | 2,778,111 | 122,585 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Treasury Stock (in shares) | 122,585 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 37 | $ 1 | $ (10,949) | 838,853 | 56,123 | (7,463) | (10,946) | (1,532,428) | $ (666,772) | |
Beginning balance (in shares) at Dec. 31, 2021 | 13,259,748 | 2,778,111 | 122,585 | |||||||
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) | (900,328) | 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) | 11,814,075 | |||||||||
Withholding of employee taxes on vested RSUs | (190) | (190) | ||||||||
Common Stock issued for vested RSUs (in shares) | 54,360 | |||||||||
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 | 24,227,855 | 2,778,111 | 900,328 | 122,585 | ||||||
Beginning balance at Dec. 31, 2021 | $ 37 | $ 1 | $ (10,949) | 838,853 | 56,123 | (7,463) | (10,946) | (1,532,428) | (666,772) | |
Beginning balance (in shares) at Dec. 31, 2021 | 13,259,748 | 2,778,111 | 122,585 | |||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (221,437) | |||||||||
Foreign currency translation adjustment | 4,588 | |||||||||
Net realized pension actuarial gains, net of tax | 1,934 | |||||||||
Ending balance at Sep. 30, 2022 | $ 142 | $ 1 | $ (10,949) | 1,072,322 | 56,676 | (2,875) | (9,012) | (1,753,865) | (647,560) | |
Ending balance (in shares) at Sep. 30, 2022 | 80,050,757 | 2,778,111 | 3,029,900 | 122,585 | ||||||
Beginning balance at Mar. 31, 2022 | $ 59 | $ 1 | $ (10,949) | 953,364 | 56,235 | (5,986) | (10,638) | (1,589,384) | (607,298) | |
Beginning balance (in shares) at Mar. 31, 2022 | 24,227,855 | 2,778,111 | 900,328 | 122,585 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (79,199) | (79,199) | ||||||||
Equity-based compensation | 528 | 528 | ||||||||
Foreign currency translation adjustment | 1,133 | 1,133 | ||||||||
Net realized pension actuarial gains, net of tax | 802 | 802 | ||||||||
Dividend declared and paid on Preferred Stock | (1,396) | (1,396) | ||||||||
Common Stock exchanged for Series B Preferred Stock | $ (4) | 4 | ||||||||
Common Stock exchanged for Series B Preferred Stock (in shares) | (2,129,572) | 2,129,572 | ||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 36 | 56,328 | 56,364 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 18,189,580 | |||||||||
Withholding of employee taxes on vested RSUs | (2) | (2) | ||||||||
Common Stock issued for vested RSUs (in shares) | 2,494 | |||||||||
Agreed cancellation of Common Stock issued for Director's vested RSUs (in shares) | 31,082 | |||||||||
Ending balance at Jun. 30, 2022 | $ 91 | $ 1 | $ (10,949) | 1,008,300 | 56,761 | (4,853) | (9,836) | (1,668,583) | (629,068) | |
Ending balance (in shares) at Jun. 30, 2022 | 40,259,275 | 2,778,111 | 3,029,900 | 122,585 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Net loss | (85,282) | (85,282) | ||||||||
Equity-based compensation | (142) | (142) | ||||||||
Foreign currency translation adjustment | 1,978 | 1,978 | ||||||||
Net realized pension actuarial gains, net of tax | 824 | 824 | ||||||||
Dividend declared and paid on Preferred Stock | (1,136) | (1,136) | ||||||||
Common Stock repurchased and retired | (487) | (487) | ||||||||
Common Stock repurchased and retired (in shares) | 357,461 | |||||||||
Issuance of Common Stock from at the market offerings, net of offering costs | $ 51 | 65,590 | 65,641 | |||||||
Issuance of Common Stock from at the market offerings, net of offering costs (in shares) | 40,093,528 | |||||||||
Reversal of excess withholding of employee taxes on vested RSUs | 57 | 57 | ||||||||
Issuance of Common Stock to Executive Chairman under certain subscription agreement | 100 | 100 | ||||||||
Issuance of Common Stock to Executive Chairman under certain subscription agreement, shares | 70,921 | |||||||||
Cancellation of fractional Common Stock on Reverse Stock Split | (45) | (45) | ||||||||
Cancellation of fractional Common Stock on Reverse Stock Split (in shares) | (15,506) | |||||||||
Ending balance at Sep. 30, 2022 | $ 142 | $ 1 | $ (10,949) | $ 1,072,322 | $ 56,676 | $ (2,875) | $ (9,012) | $ (1,753,865) | $ (647,560) | |
Ending balance (in shares) at Sep. 30, 2022 | 80,050,757 | 2,778,111 | 3,029,900 | 122,585 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||||
Treasury Stock (in shares) | 122,585 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Deficit (Parenthetical) - $ / shares | 3 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2022 | |
Series B Preferred Stock | ||
Dividend declared and paid on Series B Preferred Stock | $ 0.375 | $ 0.46 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash flows from operating activities | |||||
Net loss | $ (221,437) | $ (71,781) | |||
Adjustments to reconcile net loss | |||||
Depreciation and amortization | $ 17,737 | $ 19,094 | 53,942 | 58,113 | |
Original issue discount and debt issuance cost amortization | 10,383 | 11,684 | |||
Debt modification and extinguishment costs (gain), net | (1,803) | (28,070) | |||
Impairment of goodwill and other intangible assets | 29,565 | 29,565 | |||
Provision for doubtful accounts | 704 | 2,427 | |||
Deferred income tax provision | 2,492 | 484 | |||
Share-based compensation expense | 694 | 1,519 | |||
Unrealized foreign currency losses | (1,503) | (604) | |||
Loss (Gain) on sale of assets | 548 | (112) | |||
Fair value adjustment for interest rate swap | (125) | ||||
Change in operating assets and liabilities, net of effect from acquisitions | |||||
Accounts receivable | 83,282 | 14,440 | |||
Prepaid expenses and other assets | (6,910) | (4,329) | |||
Accounts payable and accrued liabilities | (37,004) | (57,433) | |||
Related party payables | 426 | 604 | |||
Additions to outsource contract costs | (330) | (405) | |||
Net cash used in operating activities | (86,951) | (73,588) | |||
Cash flows from investing activities | |||||
Purchase of property, plant and equipment | (14,208) | (6,950) | |||
Additions to patents | (15) | ||||
Additions to internally developed software | (2,710) | (951) | |||
Proceeds from sale of assets | 194 | 4,252 | |||
Net cash used in investing activities | (16,739) | (3,649) | |||
Cash flows from financing activities | |||||
Dividend paid on Series B Preferred Stock | (2,532) | ||||
Repurchases of Common Stock for retirement | (487) | ||||
Cash paid for equity issuance costs from at the market offerings | (8,480) | (9,060) | |||
Borrowings under factoring arrangement and Securitization Facility | 93,867 | 102,141 | |||
Principal repayment on borrowings under factoring arrangement and Securitization Facility | (186,245) | (105,112) | |||
Cash paid for withholding taxes on vested RSUs | (138) | ||||
Lease terminations | 3 | (125) | |||
Cash paid for debt issuance costs | (7,125) | ||||
Principal payments on finance lease obligations | (4,342) | (8,446) | |||
Borrowings from senior secured revolving facility and BRCC revolver | 20,000 | 3,000 | |||
Repayments on senior secured revolving facility | (49,477) | (55) | |||
Proceeds from issuance of 2026 Notes | 80,620 | ||||
Borrowings from other loans | 7,500 | 8,537 | |||
Cash paid for debt repurchases | (4,712) | (58,607) | |||
Repayment of BRCC term loan | (59,209) | ||||
Principal repayments on senior secured term loans and other loans | (22,829) | (28,512) | |||
Net cash provided by financing activities | 101,487 | 177,995 | |||
Effect of exchange rates on cash | (1,054) | (78) | |||
Net increase (decrease) in cash and cash equivalents | (3,257) | 100,680 | |||
Cash, restricted cash, and cash equivalents | |||||
Beginning of period | 48,060 | 70,309 | $ 70,309 | ||
End of period | $ 44,803 | $ 170,989 | 44,803 | 170,989 | $ 48,060 |
Supplemental cash flow data: | |||||
Income tax payments, net of refunds received | 5,267 | 2,766 | |||
Interest paid | 93,405 | 137,862 | |||
Noncash investing and financing activities: | |||||
Assets acquired through right-of-use arrangements | 958 | 2,754 | |||
Leasehold improvements funded by lessor | 125 | ||||
Accrued capital expenditures | 1,916 | 2,495 | |||
Private Placement | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of stocks | 25,065 | ||||
At the Market Offering | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of stocks | $ 245,073 | $ 249,169 |
General
General | 9 Months Ended |
Sep. 30, 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, as amended on November 14, 2022, 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 in accordance 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. On July 25, 2022, we effected a one-for-twenty reverse split (the “Reverse Stock Split”) of our issued and outstanding shares of common stock, par value $0.0001 per share (“Common Stock”). As a result of the Reverse Stock Split every twenty (20) shares of Common Stock issued and outstanding were automatically combined into one (1) share of issued and outstanding Common Stock, without any change in the par value per share. All information related to Common Stock, stock options, restricted stock units, warrants and earnings per share have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented. Restatement As described in additional detail in the Explanatory Note to its 2021 Form 10-K/A, the Company restated its audited consolidated financial statements in the 2021 Form 10-K for the year ended December 31, 2021. Previously filed quarterly reports on Form 10-Q for the first two fiscal quarters in the fiscal year ended December 31, 2022 have not been amended for the restated consolidated balance sheet as of December 31, 2021 as affected by the restatement. See Note 21, Restatement of Previously Issued Financial Statements, of the Notes to the consolidated financial statements in the 2021 Form 10-K/A for the impact of the restatement. These condensed consolidated financial statements include restated consolidated balance sheet as of December 31, 2021. Going Concern In accordance with 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 in addition to $22.8 million principal amount of 2023 Notes and $133.6 million principal amount of senior secured term loans (all as defined in Note 5) both of which mature within the next twelve months from the filing date of this report. 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 November 15, 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 $639.7 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); ● paid off its remaining obligations relating to the settlement of the Appraisal Action (see Note 8); ● amended the BRCC Facility 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 with PNC Bank to replace the existing securitization facility that generated annual interest rate savings of approximately $6.0 million; and ● raised proceeds of $310.1 million from the sale of equity and debt during the nine months ended September 30, 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 filed registration statements providing for the sale of common stock, preferred stock, warrants, debt securities and/or units. 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 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 the period 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 September 30, 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 71,256 shares and 3,029,900 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., if included, would reduce the net loss per share). Similarly, the Company also did not include the effect of 486,591 shares of Common Stock issuable upon exercise 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 (497,283 and 531,987 as of September 30, 2022 and 2021, respectively) in the calculation of diluted loss per share for the three and nine months ended September 30, 2022 and 2021, because their effects were anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss attributable to common stockholders (A) $ (87,326) $ (14,036) $ (226,613) $ (72,505) Weighted average common shares outstanding - basic and diluted (B) 63,145,001 7,532,751 35,375,045 4,397,908 Loss Per Share: Basic and diluted (A/B) $ (1.38) $ (1.86) $ (6.41) $ (16.49) Impact of COVID-19 The COVID-19 pandemic remains a threat and certain countries, such as China, are still subject to restrictions related to COVID-19. While the threat level has declined to a significant extent in the U.S. and globally, any resurgence could have a material adverse effect on our business operations, results of operations, cash flows and financial position. 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 customers. Network Outage In late June 2022, the Company experienced a network security incident impacting certain of the Company’s operational and information technology systems. The Company immediately took steps to isolate the impact and prevent additional systems from being affected, including taking large parts of its network offline as a precaution and thereby disrupting some access to our applications and services by our employees and customers. Promptly upon our detection of this incident, we initiated response and containment protocols and our security teams, supplemented by leading cyber defense firms, worked to remediate this incident. We notified law enforcement, contacted our customers to apprise them of the situation and will provide any notices that may be required by applicable law. We undertook extensive efforts to identify, contain and recover from this incident quickly and securely. We systematically brought our information systems back online in a controlled, phased approach. Our teams worked to maintain our business operations and minimize the impact on our customers, operating partners, and employees. The Company’s systems recovery efforts are substantially complete, and the Company’s operations are fully functional, however, the incident did result in some loss of revenue as well as certain incremental costs, some of which is expected to continue. The impact of this security incident has continued to persist into third quarter of 2022. We maintain a variety of insurance policies, including cyber insurance and business interruption insurance that may partially off-set the costs related to this incident. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 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 September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations 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 | 9 Months Ended |
Sep. 30, 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 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 and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 141,904 $ 60,955 $ 17,774 $ 220,633 $ 157,207 $ 53,995 $ 16,930 $ 228,132 EMEA 39,053 — — 39,053 46,561 — — 46,561 Other 4,352 — — 4,352 4,536 — — 4,536 Total $ 185,309 $ 60,955 $ 17,774 $ 264,038 $ 208,304 $ 53,995 $ 16,930 $ 279,229 Nine Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 429,979 $ 173,940 $ 55,946 $ 659,865 $ 492,620 $ 161,292 $ 53,564 $ 707,476 EMEA 136,722 — — 136,722 150,662 — — 150,662 Other 13,619 — — 13,619 14,156 — — 14,156 Total $ 580,320 $ 173,940 $ 55,946 $ 810,206 $ 657,438 $ 161,292 $ 53,564 $ 872,294 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Accounts receivable, net $ 93,600 $ 184,102 Deferred revenues 16,726 17,518 Customer deposits 18,278 17,707 Costs to obtain and fulfill a contract 1,835 2,328 Accounts receivable, net includes $24.3 million and $22.6 million as of September 30, 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 $15.3 million during the nine months ended September 30, 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 $0.8 million of amortization for these costs for the nine months ended September 30, 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 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 September 30, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 10,559 2023 35,904 2024 31,804 2025 28,332 2026 570 2027 and thereafter — Total $ 107,169 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets and Goodwill | |
Intangible 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: September 30, 2022 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 507,396 $ (342,244) $ 165,152 Developed technology 88,553 (87,912) 641 Trade names (b) 8,415 (3,104) 5,311 Outsource contract costs 17,053 (15,217) 1,836 Internally developed software 51,305 (32,927) 18,378 Assembled workforce 4,473 (4,194) 279 Purchased software 26,749 (6,687) 20,062 Intangibles, net $ 703,944 $ (492,285) $ 211,659 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 September 30, 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 customers. 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 September 30, 2022 (a) ITPS $ 252,672 $ — $ — $ (29,565) $ (687) $ 222,420 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ (29,565) $ (687) $ 328,071 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $346.1 million, $316.5 million and $317.5 million as at September 30, 2022, December 31, 2021 and December 31, 2020, respectively. Accumulated impairment relating to LLPS is $243.4 million as at September 30, 2022, December 31, 2021 and December 31, 2020. The Company tests for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis. The Company concluded that a sustained decline in its stock price and its debt price, consistent with broad trends in the global financial markets during the first half of 2022 represented triggering event for impairment. Accordingly, the Company performed an interim impairment analysis at June 30, 2022, and concluded that no impairment relating to goodwill existed at June 30, 2022. During the three months ended September 30, 2022, the Company assessed the fair value of the reporting units based upon a combination of the income and market approaches, which are standard valuation methodologies. The income approach uses discounted estimated future cash flows, whereas the market approach or guideline public company method utilizes market data of similar publicly traded companies. Our evaluation incorporated factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, and concluded that a triggering event for an interim impairment analysis had occurred in the third quarter of 2022. As part of the assessment, long-term projections were revised resulting in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. As a result of the interim impairment analysis at September 30, 2022, the Company recorded an impairment charge of $29.6 million, including taxes to goodwill relating to ITPS. The impairment charges are included within Impairment of goodwill and other intangible assets in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022. |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 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 that matured on 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 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 (collectively, the “Term Loans”). 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 $5.0 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 here as the “Private Exchange” (as distinguished from the “Public Exchange” described 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, 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, $77.8 million aggregate principal amount of the Term Loans maturing July 12, 2023 remains outstanding as of September 30, 2022. 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. As of September 30, 2022, the Revolving Credit Facility had been prepaid and terminated as described below. 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 nine months ended September 30, 2022. The Exchange Notes were subject to a guarantee in the form of a true-up mechanism whereby the Company was 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 sold their notes at a price below that threshold during agreed periods in 2022. As security for the true-up obligation under the Revolver Exchange, the Company issued $10.0 million of principal amount of 2026 Notes as collateral (the “Collateral Notes”). The Collateral Notes were not reflected in the condensed consolidated financial statements unless and until they were sold to third parties. On March 7, 2022, we recognized $17.4 million (the fair value of the true-up obligation as accounted for under ASC 450, Contingencies Guarantees On May 6, 2022, subsidiaries of the Company amended the true-up mechanism and placed an additional $20.0 million of principal amount of Collateral Notes and paid $5.0 million as true-up advance. We remeasured our obligation under the amended terms of the true-up mechanism as of June 30, 2022 and accrued an additional $7.4 million liability based on the fair value of our obligation as of such date in Other expense, net in the condensed consolidated statements of operations for the three months ended June 30, 2022. As of June 30, 2022, there was a net accrued liability balance of $26.0 million for the true-up obligation included in Accrued liabilities on the condensed consolidated balance sheet after adjusting $5.0 million of true-up advance paid for this liability during the second quarter of 2022. In July 2022, $9.0 million of principal amount of the Collateral Notes were sold by the holders of the Exchange Notes for net proceeds of $2.6 million and the proceeds were adjusted against the true-up amount payable. In August 2022, the remaining true-up liability was settled with cash payments of $9.9 million and by permitting the holders of the Exchange Notes to keep the $21.0 million of principal amount of 2026 Notes previously placed as Collateral Notes constituting an issuance. The Company made a net reversal of $1.1 million of accrued true-up liability in Other expense, net in the condensed consolidated statements of operations for the three months ended September 30, 2022. 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 certain 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 mature on July 15, 2023. 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 September 30, 2022 maturing 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, $912.7 million aggregate principal amount, or approximately 91.3%, of the 2023 Notes had been validly tendered pursuant to the Public Exchange. On December 9, 2021, upon the settlement of the Public Exchange, $662.7 million 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. 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 principal amount of the 2026 Notes outstanding including $790.5 million in aggregate principal amount issued under the Public Exchange and Private Exchange transactions described above. During the nine months ended September 30, 2022, subsidiaries of the Company sold $150.0 million in aggregate of principal amount of the 2026 Notes generating net proceeds of $75.0 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 certain 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 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. $980.0 million aggregate principal amount of 2026 Notes were outstanding as of September 30, 2022. Repurchases In July 2021 the Company commenced a debt buyback program to repurchase senior secured indebtedness, which is ongoing. During the three and nine months ended September 30, 2021, we repurchased $54.5 million of our 2023 Notes for a net cash consideration of $40.2 million. The gain on early extinguishment of debt for the 2023 Notes during the three and nine months ended September 30, 2021 totaled $13.7 million and is inclusive of $0.5 million and $0.2 million write off of original issue discount and debt issuance costs, respectively. During the three and nine months ended September 30, 2021, we also repurchased $35.1 million of the outstanding principal amount of our senior secured term loan under the Credit Agreement for a net cash consideration of $19.0 million. The gain on early extinguishment of debt for the senior secured term loan during the three and nine months ended September 30, 2021 totaled $14.4 million and is inclusive of $0.4 million and $1.4 million write off of original issue discount and debt issuance costs, respectively. During the three and nine months ended September 30, 2022, we repurchased $15.0 million principal amount of Exchange Notes issued under the Revolver Exchange (as discussed above) for a net cash consideration of $4.7 million. The gain on early extinguishment of debt for the Exchange Notes during the three and nine months ended September 30, 2022 totaled $5.3 million and is inclusive of $5.0 million and $0.1 million write off of original issue discount and debt issuance costs, respectively. Gain on the early extinguishment of debt and debt extinguishment costs during the three and nine months ended September 30, 2022 and 2021 are reported within Debt modification and extinguishment costs (gain), net within our condensed consolidated statements of operations. 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 the BRCC Term Loan, the “BRCC Facility”). 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. 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 the secured indebtedness 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 nine months ended September 30, 2022, we repaid $59.2 million of outstanding principal amount under the BRCC Term Loan along with $1.8 million of exit fees. The exit fees paid on the partial prepayment of BRCC Term Loan were 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. As of September 30, 2022, there were borrowings of $55.8 million and $20.0 million outstanding under the BRCC Term Loan and BRCC Revolver, respectively, maturing June 10, 2023. There was no availability under the BRCC Revolver as of September 30, 2022. 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 were 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 documentation for the Securitization Facility included (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 (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 0.50% and (c) the Adjusted LIBOR Rate (as defined in the Securitization Loan Agreement) plus 1.00%, plus (y) 8.75%; or (ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus 9.75%. On June 17, 2022, the Company repaid in full the loans outstanding under the Securitization Facility. The aggregate outstanding principal amount of loans under the Securitization Facility as of such date was approximately $91.9 million. The early termination of the Securitization Facility triggered a prepayment premium of $2.7 million and required payment of approximately $0.5 million and $1.3 million in respect of accrued interest and fees, respectively. All obligations under the Securitization Facility (other than contingent indemnification obligations that expressly survive termination) terminated upon repayment. The Securitization Facility was replaced by the Amended Receivables Purchase Agreement described below. Repayment of the Securitization Facility was treated as an extinguishment of debt under ASC 470-50. Accordingly, the Company wrote off the unamortized balance of $3.3 million of debt issuance costs related to the Securitization Facility. These early termination charges and unamortized balance of the debt issuance cost written off during the nine months ended September 30, 2022 are reported within Debt modification and extinguishment costs (gain), net within our condensed consolidated statements of operations. On June 17, 2022, the Company entered into an amended and restated receivables purchase agreement (the “Amended Receivables Purchase Agreement”) under its accounts receivable securitization facility among certain of the Company's subsidiaries, its wholly-owned, “bankruptcy remote” special purpose subsidiaries (“SPEs”) and certain global financial institutions (“Purchasers”). The Amended Receivables Purchase Agreement extends the term of the securitization facility such that the SPE may sell certain receivables to the Purchasers until June 17, 2025. Under the Amended Receivables Purchase Agreement, transfers of accounts receivable from the SPEs are treated as sales and are accounted for as a reduction in accounts receivable because the agreement transfers effective control over and risk related to the accounts receivable to the Purchasers. The Company and related subsidiaries have no continuing involvement in the transferred accounts receivable, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors of the Company or the related subsidiaries. As of September 30, 2022, the Company has sold $90.2 million of its accounts receivable. These sales were transacted at 100% of the face value of the relevant accounts receivable, resulting in derecognition of the accounts receivable from the Company's condensed consolidated balance sheet. Unsold accounts receivable of $42.1 million were pledged by the SPEs as collateral to the Purchasers as of September 30, 2022. Long-Term Debt Outstanding As of September 30, 2022 and December 31, 2021, the following long-term debt instruments were outstanding: December 31, September 30, 2021 2022 (Restated) Other (a) $ 24,771 29,296 Term loan under first lien credit agreement (b) 76,031 89,585 2023 notes (c) 22,724 22,616 2026 notes (d) 905,232 801,306 Secured borrowings under BRCC Facility 75,791 115,000 Secured borrowings under Securitization Facility — 91,947 Revolving Credit Facility — 99,477 Total debt 1,104,549 1,249,227 Less: Current portion of long-term debt (195,043) (236,775) Long-term debt, net of current maturities $ 909,506 $ 1,012,452 (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 $0.4 million and $1.4 million as of September 30, 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 September 30, 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 $61.9 million and $12.8 million a |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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 $1.9 million and $1.4 million for the three months ended September 30, 2022 and 2021, respectively. The Company recorded an income tax expense of $5.7 million and $3.4 million for the nine months ended September 30, 2022 and 2021, respectively. The Company's ETR of (2.3)% and (2.7)% for the three and nine months ended September 30, 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 and nine months ended September 30, 2021, the Company’s ETR of (12.2%) and (5.0%) 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 September 30, 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 | 9 Months Ended |
Sep. 30, 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 Tax Effect on Accumulated Other Comprehensive Loss As of September 30, 2022 and December 31, 2021 the Company recorded actuarial losses of $9.0 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 15 $ 19 $ 45 $ 57 Interest cost 486 425 1,458 1,275 Expected return on plan assets (724) (606) (2,172) (1,818) Amortization: Amortization of prior service cost 53 45 159 135 Amortization of net loss 646 840 1,938 2,520 Net periodic benefit cost $ 476 $ 723 $ 1,428 $ 2,169 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 $1.9 million and $2.4 million to its pension plans during the nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Appraisal Action On March 26, 2020, the Delaware Court of Chancery entered a judgment against the Company’s subsidiary SourceHOV Holdings, Inc. (“SourceHOV”) in the amount of $57.7 million inclusive of costs and interest arising out of the petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery, 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. On December 31, 2021, the Company agreed to settle the Appraisal Action along with a separate case brought by the same plaintiffs for 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 September 30, 2022, there was a net outstanding balance of $1.8 million for this matter included in Accrued liabilities on the Condensed Consolidated Balance Sheet. Contract-Related Contingencies Certain customers have asserted claims as a result of the network outage (described in Note 2), but no litigation has been filed. Currently, the Company is assessing these claims and whether they arise from contractual commitments and intends to honor its agreements, however, at this time the Company is not able to conclude on the validity and aggregate impact of these claims or the impact of expected insurance coverage to offset any liabilities for such claims. 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2021, and December 31, 2021, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan, 2023 notes and 2026 notes at approximately 67.3%, 65.0% and 28.0% respectively, of the respective principal balance outstanding as of September 30, 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 issuance of the debt, the Company’s credit rating, and the current risk-free rate. The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of September 30, 2022, and December 31, 2021: Carrying Fair Fair Value Measurements As of September 30, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 909,506 $ 247,051 $ — $ 247,051 $ — Nonrecurring assets and liabilities: Goodwill 328,071 328,071 — — 328,071 Carrying Fair Amount Value Fair Value Measurements (Restated) As of December 31, 2021 (Restated) (Restated) Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,012,452 $ 803,668 $ — $ 803,668 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 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 138,729 shares of Common Stock under the 2018 Plan. On June 27, 2022, 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 138,729 shares to 892,404. 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 nine months ended September 30, 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 68,450 $ 34.95 0.11 $ 2,393 Granted — — Forfeited — — Vested (66,935) 35.00 Outstanding Balance as of September 30, 2022 1,515 $ 33.00 0.67 $ 50 Certain RSUs that vested during the nine months ended September 30, 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 8,998 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 $0.1 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 72,265 $ 112.60 $ 235.69 0.69 $ — Granted — — Exercised — — Forfeited (1,497) 120.23 Expired — — Outstanding Balance as of September 30, 2022 (1) 70,768 $ 112.44 $ 234.73 0.27 $ — (1) 51,967 of the outstanding options are exercisable as of September 30, 2022. (2) Exercise prices of all of the outstanding options as of September 30, 2022 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value is zero. As of September 30, 2022, there was approximately $0.3 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 $0.2 million and $0.6 million related to restricted stock unit awards and stock option awards under the 2018 Plan for the three and nine months ended September 30, 2022, respectively, and $0.4 million and $1.3 million for the three and nine months ended September 30, 2021, respectively. The Company reversed compensation expense of $0.6 million on account of agreed cancellation of Common Stock issued for Director's vested restricted stock units during the three and nine months ended September 30, 2022. 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 $200 per share or greater on (x) 60 90 units will vest if, at any time during the period commencing September 14, 2021 and ending June 30, 2025, the volume weighted average of the reported closing prices of the Company’s Common Stock is $400 per share or greater on (x) 60 90 180 day 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 On June 27, 2022, 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 per unit of the awards was determined to be $29.60 and $30.20 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 per unit of the awards was determined to be $8.80 and $9.40 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 nine months ended September 30, 2022: Weighted Average Weighted Period Over Number Average Which Expected of Units Fair Value to be Recognized Outstanding Balance as of December 31, 2021 425,000 $ 9.10 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of September 30, 2022 425,000 $ 9.10 2.98 As of September 30, 2022, there was approximately $2.0 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 and $0.7 million compensation expense associated with the performance unit award for the three and nine months ended September 30, 2022, respectively. We recognized $0.2 million compensation expense associated with the performance unit award for the three and nine months ended September 30, 2021. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 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, the holders of our Common Stock and Tandem Preferred Stock (that provides a vote to holders of our Series B Preferred Stock, as described below) possess all voting power for the election of our Board of Directors (the “Board”) 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 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 September 30, 2022 and December 31, 2021, there were 80,050,757 and 13,259,748 shares of Common Stock outstanding, respectively. Reverse Stock Split On July 25, 2022, we effected the one-for-twenty Reverse Stock Split of our issued and outstanding shares of Common Stock. As a result of the Reverse Stock Split every twenty (20) shares of Common Stock issued and outstanding were automatically combined into one (1) share of issued and outstanding Common Stock, without any change in the par value per share. All information related to Common Stock, stock options, restricted stock units, warrants and earnings per share have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented. Giving effect to the Reverse Stock Split the Company’s issued 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 through July 1, 2021 2,471,185 $40.164 $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 through September 2, 2021 2,879,023 $52.069 $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 16,743,797 $14.931 $250.0 million $241.0 million Prospectus supplement dated May 23, 2022 with an aggregate offering price of up to $250.0 million (“Common ATM Program–4”) May 24, 2022 through September 30, 2022 58,283,108 $2.159 $125.8 million $122.0 million Share Buyback Program On August 10, 2022, the Company’s Board authorized a share buyback program (the “2022 Share Buyback Program”), pursuant to which the Company was permitted to repurchase up to 10,000,000 shares of Common Stock over the next two-year period. The 2022 Share Buyback Program does not obligate the Company to repurchase any shares of Common Stock. During the three months ended September 30, 2022, we repurchased and concurrently retired 357,461 shares of Common Stock at an average share price of $1.348 per share pursuant to the 2022 Share Buyback Program. The Company records such stock repurchases as a reduction to stockholders’ equity. The Company allocates the excess of the repurchase price over the par value of shares acquired to Accumulated Deficit and Additional Paid-in Capital. The portion allocated to Additional Paid-in Capital is determined by dividing the number of shares to be retired by the number of shares issued multiplied by the balance of Additional Paid-in Capital as of the retirement date. 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. The Company has designated 2,800,000 shares of its authorized preferred stock as Series A Preferred Stock. At September 30, 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 September 30, 2022, after taking into account the effect of the Reverse Stock Split, each outstanding share of Series A Preferred Stock was convertible into 0.0256 shares of Common Stock using this conversion formula. Accordingly, as of September 30, 2022, 71,256 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 on the 15 th day of each March, June, September and December. From the issue date through September 30, 2022 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 and nine months ended September 30, 2022 was $0.9 million and $2.6 million, respectively. The gross dividend accumulation for the three months ended September 30, 2021 was $0.8 million. However, as a result of 511,939 shares of Series A Preferred Stock being converted into 11,199 shares of Common Stock during the nine months ended September 30, 2021, accumulated dividend of $1.8 million was reversed, resulting in a net dividend accumulation of $0.7 million for the nine months ended September 30, 2021. As of September 30, 2022, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 is $15.0 million. The per share average of cumulative preferred dividends for the three and nine months ended September 30, 2022 is $0.33 and $0.95 , respectively. The per share average of cumulative preferred dividends for each of the three and nine months ended September 30, 2021 is $0.3 . 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 and Tandem Preferred Stock In two separate exchange offers made on February 24, 2022 (the “First Share Exchange Offer”) and May 2, 2022 (the “Second Share Exchange Offer”), the Company offered its common stockholders the opportunity to exchange shares of Common Stock for its Series B Preferred Stock, par value $0.0001 per share, with each one shares of Common Stock being exchangeable for one share of Series B Preferred Stock having a liquidation preference of $25.00 per share. 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 First Share Exchange Offer expired on March 10, 2022, and 900,328 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. The Second Share Exchange Offer expired on May 17, 2022, and 2,129,572 shares of Common Stock were validly tendered for exchange. On May 18, 2022, the Company issued a total of 2,129,572 shares of Series B Preferred Stock in exchange of all such tendered and accepted shares of Common Stock. The tendered and accepted shares of Common Stock were cancelled. The Series B Preferred Stock are listed on the Nasdaq under the symbol “XelaP”. At September 30, 2022, the Company had 3,029,900 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 September 30, 2022, after taking into account the effect of the Reverse Stock Split and payment of the accrued dividend, each outstanding share of Series B Preferred Stock was convertible into one share of Common Stock using this conversion formula. Accordingly, as of September 30, 2022, 3,029,900 shares of Common Stock were issuable upon conversion of 3,029,900 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 on the last day of each of March, June, September and December. 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 accrued for the three and nine months ended September 30, 2022 is $1.1 million and $2.5 million, respectively. The per share average of accrued preferred dividends for the three and nine months ended September 30, 2022 is $0.38 and $0.83, respectively. During the nine months ended September 30, 2022, the Company paid accumulated dividend of $2.5 million. As of September 30, 2022, there were no accumulated but unpaid dividends on the Series B Preferred Stock. 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. On May 17, 2022, the Company issued one share of tandem preferred stock, par value $0.0001 per share (the “Tandem Preferred Stock”), as a dividend on its existing shares of outstanding Series B Preferred Stock. Any issuance of Series B Preferred Stock after this date shall be automatically accompanied by an equal number of shares of Tandem Preferred Stock. Tandem Preferred Stock are embedded in the Series B Preferred Stock and they provide voting rights to the existing shares of Series B Preferred Stock. Each share of Series B Preferred Stock disclosed in the Condensed Consolidated Balance Sheet, the Condensed Consolidated Statements of Stockholders’ Deficit and the Notes to the Condensed Consolidated Financial Statements embeds one share of Tandem Preferred Stock. On all matters submitted to a vote of the stockholders of the Company, the holders of the Series B Preferred Stock through their holdings of Tandem Preferred Stock will be entitled to vote with the holders of the Common Stock as a single class. Each share of Tandem Preferred Stock entitles the holder to 1 vote per share, subject to adjustment for issuance of any shares of Common Stock pursuant to any dividend or distribution on shares of Common Stock, share split or share combination or other transactions as specified in the Certificate of Designation of Tandem Preferred Stock. Shares of Tandem Preferred Stock are not entitled to receive dividends of any kind. In the case of a transfer of the underlying Series B Preferred Stock by a holder to any transferee, the Tandem Preferred Stock shall be automatically transferred simultaneously to such transferee without any further action by such Holder. Upon the redemption of a holder’s shares of Series B Preferred Stock or the conversion of shares of Series B Preferred Stock into Common Stock, an equal number of such holder’s shares of Tandem Preferred Stock shall, without any further action required by the holder, be automatically transferred to the Company for cancellation without the payment of any additional consideration by the Company. In the event of any liquidation, winding-up or dissolution of the Company each holder of the Tandem Preferred Stock shall be entitled to receive and to be paid out of the assets of the Company available for distribution to its stockholders an amount in cash equal to the par value of such Tandem Preferred Stock with respect to each share of Tandem Preferred Stock held by such holder. Treasury Stock As of September 30, 2022, the Company has 46,452 shares repurchased and held as treasury stock under a prior expired share buyback program authorized on November 8, 2017. During the first quarter of 2020, 76,179 shares of Common Stock were returned to the Company in connection with the Appraisal Action. These shares are also included in treasury stock. The Company records treasury stock using the cost method. Warrants At September 30, 2022, there were warrants outstanding to purchase 486,591 shares of our Common Stock, consisting of 9,731,819 warrants to purchase one-twentieth of one share from the private placement that was completed in March 2021. 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 486,591 unregistered shares of the Company’s Common Stock at a price of $55.00 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 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-twentieth of one share of Common Stock, at an exercise price of $80.00 per share and will expire on September 19, 2026. The private placement warrants are not traded as of September 30, 2022 and are not subject to redemption by the Company. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 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, and together with certain of their affiliated entities managed by HandsOn Global Management LLC, including such entity, “HGM”) of less than $0.1 million for each of the three and nine months ended September 30, 2022 and 2021. Certain members of our Board, including our Executive Chairman, Par Chadha, Sharon Chadha, Ron Cogburn, and James Reynolds are, have been, or may be deemed to be affiliated with HGM. Pursuant to a master agreement dated January 1, 2015 between Rule 14, LLC, a portfolio company of HGM, and a subsidiary of the Company, the Company incurs marketing fees to Rule 14, LLC. 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 sales 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 in the master agreements. The Company incurred fees of 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 $0.1 million for each of the three months ended September 30, 2022 and 2021, and $0.2 million for each of the nine months ended September 30, 2022 and 2021. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $0.4 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively, and $1.0 million for each of the nine months ended September 30, 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. There was an expense reversal of less than $0.1 million for the three months ended September 30, 2022 and the expense recognized for these services was less than $0.1 million for the three months ended September 30, 2021. The expense recognized for these services was less than $0.1 million and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. 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 3,125, 7,936, 3,174, 3,968 and 1,984 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. On July 21, 2022, the Company entered into a subscription agreement with its Executive Chairman. Pursuant to this subscription agreement, on August 11, 2022, the Company issued and sold 70,921 shares of Common Stock of the Company to Par Chadha for a purchase price of $0.1 million. Subscription, Voting and Redemption Agreement On May 19, 2022, the Company issued 1,000,000 shares of special voting preferred stock, par value $0.0001 per share (“Redeemable Special Voting Preferred Stock”) at par value of $100 to GP-HGM LLC, an entity affiliated to the Executive Chairman of the Company, pursuant to a certain subscription, voting and redemption agreement (the “Subscription, Voting and Redemption Agreement”). The Company designated 1,000,000 shares of its authorized and unissued preferred stock as special voting preferred stock and filed a certificate of designations, preferences, rights and limitations for the special voting preferred stock. The Executive Chairman of the Company was the designated manager of GP-HGM LLC. As a sole holder of the Redeemable Special Voting Preferred Stock, GP-HGM LLC was entitled to 20,000 votes per share, to be voted together and in proportion with the holders of the Company’s voting capital stock as a single class at the Company’s 2022 annual meeting of the stockholders on two specific proposals: (a) approval of the adoption of an amendment to the Company’s certificate of incorporation to effect a reverse split of its outstanding Common Stock (the “Reverse Stock Split Proposal”) and (b) approval of an amendment to the Company’s certificate of incorporation to increase the number of authorized shares of preferred stock from 20,000,000 shares to 40,000,000 shares (the “Preferred Stock Increase Proposal”). The Redeemable Super Voting Preferred Stock were redeemed at par on June 28, 2022. Payable and Receivable/Prepayment Balances with Affiliates Payable and receivable/prepayment balances with affiliates as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 402 $ — $ 708 $ — Rule 14 — 1,698 — 1,483 HGM 102 — 7 — Oakana — — — 1 $ 504 $ 1,698 $ 715 $ 1,484 |
Segment and Geographic Area Inf
Segment and Geographic Area Information | 9 Months Ended |
Sep. 30, 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 customers. 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 expenses (income), 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 September 30, 2022 ITPS HS LLPS Total Revenue $ 185,309 $ 60,955 $ 17,774 $ 264,038 Cost of revenue (exclusive of depreciation and amortization) 157,269 48,316 12,257 217,842 Segment profit 28,040 12,639 5,517 46,196 Selling, general and administrative expenses (exclusive of depreciation and amortization) 44,369 Depreciation and amortization 17,737 Impairment of goodwill and other intangible assets 29,565 Related party expense 2,016 Interest expense, net 40,897 Debt modification and extinguishment costs (gain), net (4,696) Sundry expense, net 781 Other income, net (1,115) Net loss before income taxes $ (83,358) Three months ended September 30, 2021 ITPS HS LLPS Total Revenue $ 208,304 $ 53,995 $ 16,930 $ 279,229 Cost of revenue (exclusive of depreciation and amortization) 157,721 41,945 12,065 211,731 Segment profit 50,583 12,050 4,865 67,498 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,244 Depreciation and amortization 19,094 Related party expense 2,744 Interest expense, net 41,757 Debt modification and extinguishment costs (gain), net (28,070) Sundry expense, net 136 Other expense, net 366 Net loss before income taxes $ (11,773) Nine months ended September 30, 2022 ITPS HS LLPS Total Revenue $ 580,320 $ 173,940 $ 55,946 $ 810,206 Cost of revenue (exclusive of depreciation and amortization) 477,559 140,767 40,297 658,623 Segment profit 102,761 33,173 15,649 151,583 Selling, general and administrative expenses (exclusive of depreciation and amortization) 137,604 Depreciation and amortization 53,942 Impairment of goodwill and other intangible assets 29,565 Related party expense 6,189 Interest expense, net 122,928 Debt modification and extinguishment costs (gain), net 4,305 Sundry expense, net 347 Other expense, net 12,419 Net loss before income taxes $ (215,716) Nine months ended September 30, 2021 ITPS HS LLPS Total Revenue $ 657,438 $ 161,292 $ 53,564 $ 872,294 Cost of revenue (exclusive of depreciation and amortization) 499,892 116,736 36,770 653,398 Segment profit 157,546 44,556 16,794 218,896 Selling, general and administrative expenses (exclusive of depreciation and amortization) 121,519 Depreciation and amortization 58,113 Related party expense 7,199 Interest expense, net 127,755 Debt modification and extinguishment costs (gain), net (28,070) Sundry income, net (438) Other expense, net 1,169 Net loss before income taxes $ (68,351) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events. | |
Subsequent Events | 14. Subsequent Events The Company has evaluated all events that occurred after the balance sheet date through the date when these condensed consolidated financial statements were issued to determine if they must be reported. Common Stock At-The-Market Sales Program During October 1, 2022 through November 14, 2022, we issued an aggregate of 42,150,362 shares of Common Stock under the Common ATM Program–4 at a weighted average price of $0.281 per share, generating gross proceeds of $11.8 million and net proceeds of $11.4 million, after offering expenses. Repayments on BRCC Facility During October 1, 2022 through November 14, 2022, we repaid $5.3 million of outstanding principal amount under the BRCC Term Loan. Divestiture On October 10, 2022, we announced the execution of a definitive merger agreement to merge our European business with CF Acquisition Corp. VIII (“CFFE”), a special purpose acquisition company, to form a new publicly-traded company which will be called XBP Europe Holdings, Inc. Exela will indirectly own a majority of the outstanding capital stock of XBP Europe Holdings, Inc. The Board of the Company has approved the transaction. The transaction is subject to customary closing conditions, several of which are outside the control of the parties, and there can be no assurance as to whether or when a closing will occur. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 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 and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 141,904 $ 60,955 $ 17,774 $ 220,633 $ 157,207 $ 53,995 $ 16,930 $ 228,132 EMEA 39,053 — — 39,053 46,561 — — 46,561 Other 4,352 — — 4,352 4,536 — — 4,536 Total $ 185,309 $ 60,955 $ 17,774 $ 264,038 $ 208,304 $ 53,995 $ 16,930 $ 279,229 Nine Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 429,979 $ 173,940 $ 55,946 $ 659,865 $ 492,620 $ 161,292 $ 53,564 $ 707,476 EMEA 136,722 — — 136,722 150,662 — — 150,662 Other 13,619 — — 13,619 14,156 — — 14,156 Total $ 580,320 $ 173,940 $ 55,946 $ 810,206 $ 657,438 $ 161,292 $ 53,564 $ 872,294 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Accounts receivable, net $ 93,600 $ 184,102 Deferred revenues 16,726 17,518 Customer deposits 18,278 17,707 Costs to obtain and fulfill a contract 1,835 2,328 Accounts receivable, net includes $24.3 million and $22.6 million as of September 30, 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 $15.3 million during the nine months ended September 30, 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 $0.8 million of amortization for these costs for the nine months ended September 30, 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 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 September 30, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 10,559 2023 35,904 2024 31,804 2025 28,332 2026 570 2027 and thereafter — Total $ 107,169 |
General (Tables)
General (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
General | |
Schedule of components of basic and diluted EPS | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss attributable to common stockholders (A) $ (87,326) $ (14,036) $ (226,613) $ (72,505) Weighted average common shares outstanding - basic and diluted (B) 63,145,001 7,532,751 35,375,045 4,397,908 Loss Per Share: Basic and diluted (A/B) $ (1.38) $ (1.86) $ (6.41) $ (16.49) |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Significant Accounting Policies | |
Schedule of disaggregated revenue from contracts by geographic region and by segment | Three Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 141,904 $ 60,955 $ 17,774 $ 220,633 $ 157,207 $ 53,995 $ 16,930 $ 228,132 EMEA 39,053 — — 39,053 46,561 — — 46,561 Other 4,352 — — 4,352 4,536 — — 4,536 Total $ 185,309 $ 60,955 $ 17,774 $ 264,038 $ 208,304 $ 53,995 $ 16,930 $ 279,229 Nine Months Ended September 30, 2022 2021 ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 429,979 $ 173,940 $ 55,946 $ 659,865 $ 492,620 $ 161,292 $ 53,564 $ 707,476 EMEA 136,722 — — 136,722 150,662 — — 150,662 Other 13,619 — — 13,619 14,156 — — 14,156 Total $ 580,320 $ 173,940 $ 55,946 $ 810,206 $ 657,438 $ 161,292 $ 53,564 $ 872,294 |
Schedule of contract balances | September 30, December 31, 2022 2021 Accounts receivable, net $ 93,600 $ 184,102 Deferred revenues 16,726 17,518 Customer deposits 18,278 17,707 Costs to obtain and fulfill a contract 1,835 2,328 |
Schedule of estimated remaining fixed consideration for unsatisfied performance obligations | Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations Remainder of 2022 $ 10,559 2023 35,904 2024 31,804 2025 28,332 2026 570 2027 and thereafter — Total $ 107,169 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets and Goodwill | |
Schedule of intangible assets | September 30, 2022 Gross Carrying Accumulated Intangible Amount (a) Amortization Asset, net Customer relationships $ 507,396 $ (342,244) $ 165,152 Developed technology 88,553 (87,912) 641 Trade names (b) 8,415 (3,104) 5,311 Outsource contract costs 17,053 (15,217) 1,836 Internally developed software 51,305 (32,927) 18,378 Assembled workforce 4,473 (4,194) 279 Purchased software 26,749 (6,687) 20,062 Intangibles, net $ 703,944 $ (492,285) $ 211,659 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 September 30, 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 September 30, 2022 (a) ITPS $ 252,672 $ — $ — $ (29,565) $ (687) $ 222,420 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ (29,565) $ (687) $ 328,071 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $346.1 million, $316.5 million and $317.5 million as at September 30, 2022, December 31, 2021 and December 31, 2020, respectively. Accumulated impairment relating to LLPS is $243.4 million as at September 30, 2022, December 31, 2021 and December 31, 2020. |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt and Credit Facilities | |
Schedule of outstanding long-term debt instruments | December 31, September 30, 2021 2022 (Restated) Other (a) $ 24,771 29,296 Term loan under first lien credit agreement (b) 76,031 89,585 2023 notes (c) 22,724 22,616 2026 notes (d) 905,232 801,306 Secured borrowings under BRCC Facility 75,791 115,000 Secured borrowings under Securitization Facility — 91,947 Revolving Credit Facility — 99,477 Total debt 1,104,549 1,249,227 Less: Current portion of long-term debt (195,043) (236,775) Long-term debt, net of current maturities $ 909,506 $ 1,012,452 (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 $0.4 million and $1.4 million as of September 30, 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 September 30, 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 $61.9 million and $12.8 million as of September 30, 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) | 9 Months Ended |
Sep. 30, 2022 | |
Employee Benefit Plans | |
Schedule of components of the net periodic benefit cost | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Service cost $ 15 $ 19 $ 45 $ 57 Interest cost 486 425 1,458 1,275 Expected return on plan assets (724) (606) (2,172) (1,818) Amortization: Amortization of prior service cost 53 45 159 135 Amortization of net loss 646 840 1,938 2,520 Net periodic benefit cost $ 476 $ 723 $ 1,428 $ 2,169 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurement | |
Schedule of fair value of financial instruments | Carrying Fair Fair Value Measurements As of September 30, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 909,506 $ 247,051 $ — $ 247,051 $ — Nonrecurring assets and liabilities: Goodwill 328,071 328,071 — — 328,071 Carrying Fair Amount Value Fair Value Measurements (Restated) As of December 31, 2021 (Restated) (Restated) Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,012,452 $ 803,668 $ — $ 803,668 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 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 68,450 $ 34.95 0.11 $ 2,393 Granted — — Forfeited — — Vested (66,935) 35.00 Outstanding Balance as of September 30, 2022 1,515 $ 33.00 0.67 $ 50 |
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 72,265 $ 112.60 $ 235.69 0.69 $ — Granted — — Exercised — — Forfeited (1,497) 120.23 Expired — — Outstanding Balance as of September 30, 2022 (1) 70,768 $ 112.44 $ 234.73 0.27 $ — (1) 51,967 of the outstanding options are exercisable as of September 30, 2022. (2) Exercise prices of all of the outstanding options as of September 30, 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 425,000 $ 9.10 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of September 30, 2022 425,000 $ 9.10 2.98 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 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 through July 1, 2021 2,471,185 $40.164 $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 through September 2, 2021 2,879,023 $52.069 $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 16,743,797 $14.931 $250.0 million $241.0 million Prospectus supplement dated May 23, 2022 with an aggregate offering price of up to $250.0 million (“Common ATM Program–4”) May 24, 2022 through September 30, 2022 58,283,108 $2.159 $125.8 million $122.0 million |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related-Party Transactions | |
Schedule of payable and receivable balances with affiliates | September 30, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 402 $ — $ 708 $ — Rule 14 — 1,698 — 1,483 HGM 102 — 7 — Oakana — — — 1 $ 504 $ 1,698 $ 715 $ 1,484 |
Segment and Geographic Area I_2
Segment and Geographic Area Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment and Geographic Area Information | |
Schedule of reconciliation of segment profit to net loss before income taxes by segment information | Three months ended September 30, 2022 ITPS HS LLPS Total Revenue $ 185,309 $ 60,955 $ 17,774 $ 264,038 Cost of revenue (exclusive of depreciation and amortization) 157,269 48,316 12,257 217,842 Segment profit 28,040 12,639 5,517 46,196 Selling, general and administrative expenses (exclusive of depreciation and amortization) 44,369 Depreciation and amortization 17,737 Impairment of goodwill and other intangible assets 29,565 Related party expense 2,016 Interest expense, net 40,897 Debt modification and extinguishment costs (gain), net (4,696) Sundry expense, net 781 Other income, net (1,115) Net loss before income taxes $ (83,358) Three months ended September 30, 2021 ITPS HS LLPS Total Revenue $ 208,304 $ 53,995 $ 16,930 $ 279,229 Cost of revenue (exclusive of depreciation and amortization) 157,721 41,945 12,065 211,731 Segment profit 50,583 12,050 4,865 67,498 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,244 Depreciation and amortization 19,094 Related party expense 2,744 Interest expense, net 41,757 Debt modification and extinguishment costs (gain), net (28,070) Sundry expense, net 136 Other expense, net 366 Net loss before income taxes $ (11,773) Nine months ended September 30, 2022 ITPS HS LLPS Total Revenue $ 580,320 $ 173,940 $ 55,946 $ 810,206 Cost of revenue (exclusive of depreciation and amortization) 477,559 140,767 40,297 658,623 Segment profit 102,761 33,173 15,649 151,583 Selling, general and administrative expenses (exclusive of depreciation and amortization) 137,604 Depreciation and amortization 53,942 Impairment of goodwill and other intangible assets 29,565 Related party expense 6,189 Interest expense, net 122,928 Debt modification and extinguishment costs (gain), net 4,305 Sundry expense, net 347 Other expense, net 12,419 Net loss before income taxes $ (215,716) Nine months ended September 30, 2021 ITPS HS LLPS Total Revenue $ 657,438 $ 161,292 $ 53,564 $ 872,294 Cost of revenue (exclusive of depreciation and amortization) 499,892 116,736 36,770 653,398 Segment profit 157,546 44,556 16,794 218,896 Selling, general and administrative expenses (exclusive of depreciation and amortization) 121,519 Depreciation and amortization 58,113 Related party expense 7,199 Interest expense, net 127,755 Debt modification and extinguishment costs (gain), net (28,070) Sundry income, net (438) Other expense, net 1,169 Net loss before income taxes $ (68,351) |
General (Details)
General (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Jul. 25, 2022 $ / shares shares | Sep. 30, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2021 $ / shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Reverse stock split | 20 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Conversion of shares (in shares) | shares | 1 | |||
Principal amount of debt | $ 59,209 | |||
Estimated annual interest rate savings | 6,000 | |||
Proceeds to be raised | 310,100 | |||
Senior secured term loan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Principal amount of debt | 133,600 | |||
PNC Bank Commitment | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Maximum borrowing capacity | 150,000 | |||
Secured 2023 notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Principal amount of debt | 22,800 | |||
BRCC Facility | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Past amounts raised | 639,700 | |||
Maximum borrowing capacity | $ 51,000 | |||
BRCC Facility | Senior secured revolving facility | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Maximum borrowing capacity | $ 51,000 |
General - Net Loss per Share (D
General - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 18, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net loss per share | |||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 497,283 | 531,987 | |||
Net loss attributable to common stockholders | $ (87,326) | $ (14,036) | $ (226,613) | $ (72,505) | |
Weighted average common shares outstanding - basic | 63,145,001 | 7,532,751 | 35,375,045 | 4,397,908 | |
Weighted average common shares outstanding - diluted | 63,145,001 | 7,532,751 | 35,375,045 | 4,397,908 | |
Basic (in dollars per share) | $ (1.38) | $ (1.86) | $ (6.41) | $ (16.49) | |
Diluted (in dollars per share) | $ (1.38) | $ (1.86) | $ (6.41) | $ (16.49) | |
Series A Preferred Stock | |||||
Net loss per share | |||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 71,256 | ||||
Series B Preferred Stock | |||||
Net loss per share | |||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 3,029,900 | ||||
Warrant | Private Placement | |||||
Net loss per share | |||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 9,731,819 | ||||
Common Stock | |||||
Net loss per share | |||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 486,591 |
Significant Accounting Polici_4
Significant Accounting Policies - Disaggregation of Revenues (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Disaggregation of Revenues | ||||
Number of segments | segment | 3 | |||
Revenue | $ 264,038 | $ 279,229 | $ 810,206 | $ 872,294 |
U.S.A. | ||||
Disaggregation of Revenues | ||||
Revenue | 220,633 | 228,132 | 659,865 | 707,476 |
EMEA | ||||
Disaggregation of Revenues | ||||
Revenue | 39,053 | 46,561 | 136,722 | 150,662 |
Other. | ||||
Disaggregation of Revenues | ||||
Revenue | 4,352 | 4,536 | 13,619 | 14,156 |
ITPS | ||||
Disaggregation of Revenues | ||||
Revenue | 185,309 | 208,304 | 580,320 | 657,438 |
ITPS | U.S.A. | ||||
Disaggregation of Revenues | ||||
Revenue | 141,904 | 157,207 | 429,979 | 492,620 |
ITPS | EMEA | ||||
Disaggregation of Revenues | ||||
Revenue | 39,053 | 46,561 | 136,722 | 150,662 |
ITPS | Other. | ||||
Disaggregation of Revenues | ||||
Revenue | 4,352 | 4,536 | 13,619 | 14,156 |
HS | ||||
Disaggregation of Revenues | ||||
Revenue | 60,955 | 53,995 | 173,940 | 161,292 |
HS | U.S.A. | ||||
Disaggregation of Revenues | ||||
Revenue | 60,955 | 53,995 | 173,940 | 161,292 |
LLPS | ||||
Disaggregation of Revenues | ||||
Revenue | 17,774 | 16,930 | 55,946 | 53,564 |
LLPS | U.S.A. | ||||
Disaggregation of Revenues | ||||
Revenue | $ 17,774 | $ 16,930 | $ 55,946 | $ 53,564 |
Significant Accounting Polici_5
Significant Accounting Policies - Contract Balances (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) category | Dec. 31, 2021 USD ($) | |
Significant Accounting Policies | ||
Accounts receivable, net | $ 93,600 | $ 184,102 |
Deferred revenues | 16,726 | 17,518 |
Customer deposits | 18,278 | 17,707 |
Costs to obtain and fulfill a contract | 1,835 | 2,328 |
Unbilled receivables, net | 24,300 | $ 22,600 |
Revenue recognized from deferred revenue | 15,300 | |
Amortization of contract costs | $ 800 | |
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 | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Significant Accounting Policies | |
Contracts with an original expected length | true |
Remainder of 2022 | $ 10,559 |
2023 | 35,904 |
2024 | 31,804 |
2025 | 28,332 |
2026 | 570 |
Total | $ 107,169 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Intangibles | ||
Gross Carrying Amount | $ 703,944 | $ 702,338 |
Accumulated Amortization | (492,285) | (457,799) |
Intangible Asset, net | 211,659 | 244,539 |
Carrying amount of indefinite-lived trade names which are not amortizable | 5,300 | |
Customer relationships | ||
Intangibles | ||
Gross Carrying Amount | 507,396 | 508,241 |
Accumulated Amortization | (342,244) | (316,084) |
Intangible Asset, net | 165,152 | 192,157 |
Developed technology | ||
Intangibles | ||
Gross Carrying Amount | 88,553 | 88,553 |
Accumulated Amortization | (87,912) | (87,612) |
Intangible Asset, net | 641 | 941 |
Trade names | ||
Intangibles | ||
Gross Carrying Amount | 8,415 | 8,400 |
Accumulated Amortization | (3,104) | (3,100) |
Intangible Asset, net | 5,311 | 5,300 |
Accumulated impairment losses | 44,100 | 44,100 |
Outsource contract costs | ||
Intangibles | ||
Gross Carrying Amount | 17,053 | 16,814 |
Accumulated Amortization | (15,217) | (14,486) |
Intangible Asset, net | 1,836 | 2,328 |
Internally developed software | ||
Intangibles | ||
Gross Carrying Amount | 51,305 | 49,108 |
Accumulated Amortization | (32,927) | (27,812) |
Intangible Asset, net | 18,378 | 21,296 |
Assembled workforce | ||
Intangibles | ||
Gross Carrying Amount | 4,473 | 4,473 |
Accumulated Amortization | (4,194) | (3,355) |
Intangible Asset, net | 279 | 1,118 |
Purchased software | ||
Intangibles | ||
Gross Carrying Amount | 26,749 | 26,749 |
Accumulated Amortization | (6,687) | (5,350) |
Intangible Asset, net | $ 20,062 | $ 21,399 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Goodwill (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill | |||||
Number of segments | segment | 3 | ||||
Beginning of Year Balance | $ 358,323 | $ 359,781 | |||
Deletions | (825) | ||||
Impairments | $ 0 | (29,565) | |||
Currency Translation Adjustments | (687) | (633) | |||
End of Year Balance | $ 328,071 | 328,071 | 358,323 | ||
Impairment of goodwill and other intangible assets | 29,565 | 29,565 | |||
ITPS | |||||
Goodwill | |||||
Beginning of Year Balance | 252,672 | 254,130 | |||
Deletions | (825) | ||||
Impairments | (29,565) | ||||
Currency Translation Adjustments | (687) | (633) | |||
End of Year Balance | 222,420 | 222,420 | 252,672 | ||
Accumulated impairment losses | 346,100 | 346,100 | 316,500 | $ 317,500 | |
HS | |||||
Goodwill | |||||
Beginning of Year Balance | 86,786 | 86,786 | |||
End of Year Balance | 86,786 | 86,786 | 86,786 | ||
LLPS | |||||
Goodwill | |||||
Beginning of Year Balance | 18,865 | 18,865 | |||
End of Year Balance | 18,865 | 18,865 | 18,865 | ||
Accumulated impairment losses | $ 243,400 | $ 243,400 | $ 243,400 | $ 243,400 |
Long-Term Debt and Credit Fac_3
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% | |
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% | |
Senior secured revolving facility | Base rate | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 6% |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands | Jul. 13, 2018 | Sep. 30, 2022 | Dec. 31, 2021 |
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 1,104,549 | $ 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% | ||
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% | ||
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% | ||
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_5
Long-Term Debt and Credit Facilities - 2018 and 2019 Incremental Term Loan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
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_6
Long-Term Debt and Credit Facilities - Securitization (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Jun. 17, 2022 | Mar. 07, 2022 | Dec. 17, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 31, 2022 | May 18, 2020 | |
Securitization Facility, Prepayment Premium | $ 2,700 | |||||||||
Proceeds from initial borrowings | $ 20,000 | $ 3,000 | ||||||||
Asset Pledged as Collateral [Member] | ||||||||||
Accounts Receivable from Securitization | $ 42,100 | |||||||||
Senior secured notes | ||||||||||
Write off of Deferred Debt Issuance Cost | $ 200 | $ 200 | ||||||||
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% | |||||||||
Write off of Deferred Debt Issuance Cost | 3,300 | |||||||||
Repayment of principal, accrued interest and fees | 500 | |||||||||
Securitization facility, payment of accrued interest and fees | 1,300 | |||||||||
Outstanding borrowings under the facility | 91,900 | |||||||||
Initial funding supported by receivables | $ 92,000 | |||||||||
Accounts Receivable, Sale | $ 90,200 | |||||||||
Percentage of face value of accounts receivable | 100% | |||||||||
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% | |||||||||
Securitization Facility | LIBOR | ||||||||||
Variable interest rate (as a percent) | 9.75% | |||||||||
Revolving Loan Exchange and Prepayment Agreement | ||||||||||
Principal amount | $ 9,000 | |||||||||
Write off of Deferred Debt Issuance Cost | $ 200 |
Long-Term Debt and Credit Fac_7
Long-Term Debt and Credit Facilities (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
May 06, 2022 USD ($) | Mar. 18, 2022 USD ($) | Mar. 07, 2022 USD ($) | Dec. 09, 2021 USD ($) | Nov. 17, 2021 USD ($) | Oct. 27, 2021 USD ($) | Aug. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) installment | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) installment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 07, 2021 USD ($) | Jul. 12, 2017 USD ($) | |
Long-Term Debt and Credit Facilities. | ||||||||||||||||
automatic maturity extensions | 6 months | |||||||||||||||
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 | 912,700,000 | |||||||||||||||
Outstanding debt | $ 1,104,549,000 | $ 1,104,549,000 | $ 1,249,227,000 | |||||||||||||
Debt instruments exit fee | 4,696,000 | $ 28,070,000 | (4,305,000) | $ 28,070,000 | ||||||||||||
Secured 2023 notes | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Principal amount | $ 1,000,000,000 | |||||||||||||||
Interest rate (in percent) | 10% | |||||||||||||||
Debt instrument principle amount denomination | $ 1,000 | |||||||||||||||
Debt instrument face amount exchanged percentage | 91.30% | |||||||||||||||
Debt instrument face amount exchanged outstanding | 22,800,000 | 22,800,000 | ||||||||||||||
Secured 2026 notes | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Principal amount | $ 127,800,000 | $ 150,000,000 | 150,000,000 | 790,500,000 | ||||||||||||
Net proceeds from 2026 notes | $ 75,000,000 | |||||||||||||||
Interest rate (in percent) | 11.50% | 11.50% | 11.50% | |||||||||||||
Debt instrument principle amount denomination | $ 1,000 | |||||||||||||||
Debt instrument face amount exchanged | $ 662,700,000 | |||||||||||||||
Outstanding debt | $ 980,000,000 | $ 980,000,000 | 795,000,000 | |||||||||||||
Line of credit facility on notes | $ 50,000,000 | |||||||||||||||
True-up advance paid | $ 5,000,000 | |||||||||||||||
Debt instrument, redemption price percentage | 100% | |||||||||||||||
Debt instrument redemption price premium, percentage on principle amount | 1% | |||||||||||||||
Debt Instrument Redemption price premium, basis spread on variable rate | 50% | |||||||||||||||
BRCC Facility | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Principal amount | $ 75,000,000 | $ 115,000,000 | ||||||||||||||
Interest rate (in percent) | 11.50% | |||||||||||||||
Outstanding debt | 75,791,000 | $ 75,791,000 | $ 115,000,000 | |||||||||||||
Debt instrument, repayment made in cash | 59,200,000 | |||||||||||||||
Maximum borrowing capacity | $ 51,000,000 | |||||||||||||||
Availability under credit facility | $ 0 | $ 0 | ||||||||||||||
Number of installments | installment | 12 | 12 | ||||||||||||||
Debt instruments exit fee | $ 1,800,000 | |||||||||||||||
BRCC Term Loan | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Outstanding debt | $ 55,800,000 | 55,800,000 | ||||||||||||||
BRCC Revolver | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Outstanding debt | 20,000,000 | 20,000,000 | ||||||||||||||
Senior secured term loan | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Outstanding debt | $ 212,100,000 | 77,800,000 | 77,800,000 | |||||||||||||
Exchange Notes | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Debt instruments exit fee | 5,300,000 | 5,300,000 | ||||||||||||||
Write off of previously recognized debt issuance costs | 100,000 | 100,000 | ||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Principal amount | $ 9,000,000 | |||||||||||||||
Net proceeds from 2026 notes | $ 2,600,000 | |||||||||||||||
Outstanding revolving credit facility | $ 100,000,000 | |||||||||||||||
Line of credit facility cash | 50,000,000 | |||||||||||||||
Debt instruments liability recognized on original issuance discount | 17,400,000 | |||||||||||||||
Debt instruments accrued additional true up liability | 7,400,000 | $ 6,200,000 | ||||||||||||||
Accrued liability for true-up obligation | 26,000,000 | |||||||||||||||
True-up advance paid | $ 9,900,000 | $ 5,000,000 | ||||||||||||||
Write off of previously recognized debt issuance costs | 200,000 | |||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | Other expense | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Amount of accrued true up liability expense | $ 1,100,000 | |||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | Secured 2026 notes | ||||||||||||||||
Long-Term Debt and Credit Facilities. | ||||||||||||||||
Principal amount | $ 21,000,000 | |||||||||||||||
Line of credit facility on notes | 50,000,000 | |||||||||||||||
Debt instrument, collateral amount | $ 20,000,000 | $ 10,000,000 |
Long-Term Debt and Credit Fac_8
Long-Term Debt and Credit Facilities - Repurchases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 12, 2017 | |
Net cash consideration | $ 4,712 | $ 58,607 | |||
Gain (Loss) on Extinguishment of Debt | $ 4,696 | $ 28,070 | (4,305) | 28,070 | |
Exchange Notes | |||||
Repurchase of principal amount | 15,000 | 15,000 | |||
Net cash consideration | 4,700 | 4,700 | |||
Original issue discount written off | 5,000 | 5,000 | |||
Write off of Deferred Debt Issuance Cost | 100 | 100 | |||
Gain (Loss) on Extinguishment of Debt | $ 5,300 | $ 5,300 | |||
Senior secured notes | |||||
Repurchase of principal amount | 54,500 | 54,500 | |||
Net cash consideration | 40,200 | ||||
Original issue discount written off | 500 | 500 | |||
Write off of Deferred Debt Issuance Cost | 200 | 200 | |||
Gain (Loss) on Extinguishment of Debt | 13,700 | 13,700 | |||
Senior secured term loan | |||||
Repurchase of principal amount | 35,100 | 35,100 | |||
Net cash consideration | 19,000 | ||||
Original issue discount written off | 400 | 400 | |||
Write off of Deferred Debt Issuance Cost | 1,400 | 1,400 | |||
Gain (Loss) on Extinguishment of Debt | $ 14,400 | $ 14,400 | |||
Principal amount | $ 350,000 |
Long-Term Debt and Credit Fac_9
Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 1,104,549 | $ 1,249,227 |
Less: Current portion of long-term debt | (195,043) | (236,775) |
Long-term debt, net of current maturities | 909,506 | 1,012,452 |
Senior secured revolving facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 99,477 | |
Other | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 24,771 | 29,296 |
First lien credit agreement | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 76,031 | 89,585 |
Debt discount | 400 | 800 |
Unamortized debt issuance costs | 1,400 | 2,800 |
Securitization Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 91,947 | |
Secured 2023 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 22,724 | 22,616 |
Debt discount | 100 | 200 |
Unamortized debt issuance costs | 100 | 100 |
Secured 2026 notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 980,000 | 795,000 |
Secured 2026 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 905,232 | 801,306 |
Debt discount | 61,900 | |
Debt exchange premium | 15,400 | |
Unamortized debt issuance costs | 12,800 | 9,000 |
BRCC Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 75,791 | $ 115,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes | ||||
Income tax (expense) benefit | $ 1,924 | $ 1,441 | $ 5,721 | $ 3,430 |
Annual effective tax rate | (2.30%) | (12.20%) | (2.70%) | (5.00%) |
Statutory tax rate | 21% | 21% |
Employee Benefit Plans - German
Employee Benefit Plans - Germany & UK (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs | ||
Net actuarial loss | $ 9 | $ 10.9 |
Deferred tax benefit | $ 2 | $ 2 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net periodic benefit cost | ||||
Employer contributions | $ 1,900 | $ 2,400 | ||
Pension [Member] | ||||
Net periodic benefit cost | ||||
Service cost | $ 15 | $ 19 | 45 | 57 |
Interest cost | $ 486 | $ 425 | $ 1,458 | $ 1,275 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Income (Expense), Nonoperating, Net | Interest Income (Expense), Nonoperating, Net | Interest Income (Expense), Nonoperating, Net | Interest Income (Expense), Nonoperating, Net |
Expected return on plan assets | $ (724) | $ (606) | $ (2,172) | $ (1,818) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Amortization of prior service cost | $ 53 | $ 45 | $ 159 | $ 135 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Amortization of net loss | $ (646) | $ (840) | $ (1,938) | $ (2,520) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Net periodic benefit cost | $ 476 | $ 723 | $ 1,428 | $ 2,169 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
May 28, 2021 USD ($) | Mar. 26, 2020 USD ($) | Nov. 30, 2020 USD ($) | Sep. 30, 2020 EUR (€) | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Commitments and Contingencies | ||||||
Amount awarded to petitioners | $ 57.7 | $ 63.4 | ||||
Accrued liability | $ 63.4 | $ 0 | ||||
Adverse Arbitration Order | ||||||
Commitments and Contingencies | ||||||
Accrued liability | $ 1.8 | |||||
Amount awarded to customer | $ 13 | |||||
Amount paid towards judgement | $ 8.8 | |||||
Earnout sought | € | € 10 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 328,071 | $ 358,323 | $ 359,781 |
Senior secured term loan | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 67.30% | ||
Secured 2023 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 65% | ||
Secured 2026 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 28% | ||
Carrying Amount | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | $ 909,506 | 1,012,452 | |
Carrying Amount | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 328,071 | 358,323 | |
Fair Value | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 247,051 | 803,668 | |
Fair Value | Recurring assets and liabilities | Level 2 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 247,051 | 803,668 | |
Fair Value | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 328,071 | 358,323 | |
Fair Value | Nonrecurring assets and liabilities | Level 3 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 328,071 | $ 358,323 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan (Details) - shares | Sep. 30, 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 | 892,404 | 138,729 | |
2018 Plan | Maximum | |||
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 138,729 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Grants (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 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 | 8,998 | |
Payment, Tax Withholding, Share-based Payment Arrangement | $ 138 | |
RSU's | 2018 Plan | ||
Number of Units | ||
Outstanding Balance as of December 31, 2021 | 68,450 | |
Shares vested | (66,935) | |
Outstanding Balance as of September 30, 2022 | 1,515 | 68,450 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 34.95 | |
Shares vested | 35 | |
Balance at the end of the period | $ 33 | $ 34.95 |
Average Remaining Contractual Life (Years) | ||
Weighted average remaining contractual life (in years) | 8 months 1 day | 1 month 9 days |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value outstanding | $ 50 | $ 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) - 2018 Plan - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 18, 2018 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Unrecognized compensation expense | ||||||
Unrecognized compensation expense | $ 0.3 | $ 0.3 | ||||
Reversed compensation expense | 0.6 | 0.6 | ||||
Selling, general and administrative expense | ||||||
Unrecognized compensation expense | ||||||
Total compensation expense | $ 0.2 | $ 0.4 | $ 0.6 | $ 1.3 | ||
Stock options | ||||||
Stock-based compensation | ||||||
Minimum fair market value per share of underlying stock used to determine option grant price, as a percent | 100% | |||||
Expiration of stock options | 10 years | |||||
Outstanding | ||||||
Outstanding Balance at beginning of the year (in shares) | 72,265 | |||||
Forfeited (in shares) | (1,497) | |||||
Outstanding Balance at the end of the year (in shares) | 70,768 | 70,768 | 72,265 | |||
Exercisable (in shares) | 51,967 | 51,967 | ||||
Weighted average Grant Date fair Value | ||||||
Outstanding balance at the beginning of the period | $ 112.60 | |||||
Forfeited | 120.23 | |||||
Outstanding balance at the end of the period | $ 112.44 | 112.44 | $ 112.60 | |||
Weighted Average Exercise Price | ||||||
Outstanding Balance at the beginning of the year | 235.69 | |||||
Outstanding Balance at the end of the year (in shares) | $ 234.73 | $ 234.73 | $ 235.69 | |||
Additional information | ||||||
Average Remaining Vesting Period | 3 months 7 days | 8 months 8 days | ||||
Aggregate Intrinsic Value | $ 0 | $ 0 | ||||
Stock options | Minimum | ||||||
Stock-based compensation | ||||||
Vesting period | 2 years | |||||
Stock options | Maximum | ||||||
Stock-based compensation | ||||||
Vesting period | 4 years |
Stock-Based Compensation - Mark
Stock-Based Compensation - Market Performance Units (Details) - Market Performance Units - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 14, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of the awards | $ 9.10 | $ 9.10 | $ 9.10 | |||
Unrecognized compensation expense | $ 2 | $ 2 | ||||
Compensation expense | $ 0.2 | $ 0.2 | $ 0.7 | $ 0.2 | ||
Share Price (Less or equal to $40.00 per share) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 0% | |||||
Share Price | $ 40 | $ 40 | ||||
Tranche 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 50% | |||||
Share Price | $ 200 | |||||
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 | 29.60 | 29.60 | ||||
Modification date fair value | 8.80 | 8.80 | ||||
Tranche 1 | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share Price | 40 | 40 | ||||
Tranche 1 | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share Price | 200 | $ 200 | ||||
Tranche 1 | Share Price (Less or equal to $200 per share) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 100% | |||||
Share Price | 200 | $ 200 | ||||
Tranche 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 50% | |||||
Share Price | $ 400 | |||||
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 | 30.20 | $ 30.20 | ||||
Modification date fair value | 9.40 | 9.40 | ||||
Tranche 2 | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share Price | 400 | $ 400 | ||||
Tranche 2 | Share Price (Less or equal to $400 per share) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage | 100% | |||||
Share Price | $ 400 | $ 400 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of activity for the Market Performance RSUs (Details) - Market Performance Units - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Units | ||
Outstanding Balance as of December 31, 2021 | 425,000 | |
Outstanding Balance as of September 30, 2022 | 425,000 | 425,000 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 9.10 | |
Balance at the end of the period | $ 9.10 | $ 9.10 |
Weighted Average Period Over Which Expected to be Recognized | ||
Weighted average remaining contractual life (in years) | 2 years 11 months 23 days | 2 years 11 months 23 days |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 9 Months Ended | |
Sep. 30, 2022 Vote shares | Dec. 31, 2021 shares | |
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 | 80,050,757 | 13,259,748 |
Stockholders' Equity - Share Bu
Stockholders' Equity - Share Buyback Program (Details) - 2022 Share Buyback Program - USD ($) | 3 Months Ended | |
Aug. 10, 2022 | Sep. 30, 2022 | |
Share Buyback Program | ||
Repurchase authorized amount | $ 10,000,000 | |
Term of share buyback program | 2 years | |
Common Stock repurchased and retired (in shares) | 357,461 | |
Weighted average price | $ 1.348 |
Stockholders' Equity - Reverse
Stockholders' Equity - Reverse Stock Split (Details) | Jul. 25, 2022 shares | Sep. 30, 2022 shares | Dec. 31, 2021 shares |
STOCKHOLDERS' EQUITY | |||
Reverse stock split | 20 | ||
Conversion of shares (in shares) | 1 | ||
Common stock, shares issued | 80,173,342 | 13,382,333 | |
Common stock, shares outstanding | 80,050,757 | 13,259,748 | |
Prior To Stock Split [Member] | |||
STOCKHOLDERS' EQUITY | |||
Common stock, shares issued | 265,194,961 | ||
Common stock, shares outstanding | 265,194,961 |
Stockholders' Equity - Sales of
Stockholders' Equity - Sales of Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | |
Class of Stock [Line Items] | |||||||
Aggregate offering price | $ 65,641 | $ 56,364 | $ 114,533 | $ 222,726 | $ 17,373 | $ 25,080 | |
Common ATM Program-1 | |||||||
Class of Stock [Line Items] | |||||||
Aggregate offering price | $ 100,000 | ||||||
Number of Shares Sold | 2,471,185 | ||||||
Weighted Average Price Per Share | $ 40.164 | $ 40.164 | |||||
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 | 2,879,023 | ||||||
Weighted Average Price Per Share | 52.069 | $ 52.069 | |||||
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 | 16,743,797 | ||||||
Weighted Average Price Per Share | 14.931 | $ 14.931 | |||||
Gross proceeds | $ 250,000 | ||||||
Net proceeds | 241,000 | ||||||
Common ATM Program-4 | |||||||
Class of Stock [Line Items] | |||||||
Aggregate offering price | $ 250,000 | ||||||
Number of Shares Sold | 58,283,108 | ||||||
Weighted Average Price Per Share | $ 2.159 | $ 2.159 | |||||
Gross proceeds | $ 125,800 | ||||||
Net proceeds | $ 122,000 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) | 3 Months Ended | 9 Months Ended | |||||||||||
Jul. 25, 2022 shares | May 18, 2022 shares | May 02, 2022 $ / shares shares | Mar. 11, 2022 shares | Feb. 24, 2022 $ / shares shares | Jun. 30, 2020 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares | Sep. 30, 2022 USD ($) director $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | May 17, 2022 $ / shares shares | Mar. 10, 2022 shares | Dec. 31, 2021 $ / shares shares | |
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 | $ 0.0001 | $ 0.0001 | |||||||||
Dividends, Preferred Stock | $ | $ 1,100,000 | $ 2,500,000 | |||||||||||
Conversion of shares (in shares) | 1 | ||||||||||||
Reverse stock split | 20 | ||||||||||||
Series A Preferred Stock | |||||||||||||
Preferred Stock | |||||||||||||
Preferred stock, shares authorized | 2,800,000 | 2,800,000 | 2,800,000 | ||||||||||
Preferred stock, shares outstanding | 2,778,111 | 2,778,111 | 2,778,111 | ||||||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred Stock, cumulative dividends rate (in percentage) | 10% | ||||||||||||
Accumulated preferred stock, Dividends | $ | $ 900,000 | $ 800,000 | $ 2,600,000 | ||||||||||
Conversion of Series A Preferred stock to common shares | 511,939 | ||||||||||||
Conversion of shares (in shares) | 11,199 | ||||||||||||
Additional common stock issuable upon conversion of remaining convertible shares | 71,256 | 71,256 | |||||||||||
Cumulative accrued but unpaid dividends | $ | $ 15,000,000 | $ 15,000,000 | |||||||||||
Per share average of cumulative preferred dividends (in dollars per share) | $ / shares | $ 0.33 | $ 0.3 | $ 0.95 | $ 0.3 | |||||||||
Reverse stock split | 0.0256 | ||||||||||||
Series B Preferred Stock | |||||||||||||
Preferred Stock | |||||||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||||||
Preferred stock, shares outstanding | 3,029,900 | 3,029,900 | 0 | ||||||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||
Conversion of Series A Preferred stock to common shares | 3,029,900 | ||||||||||||
Dividends, Preferred Stock | $ | $ 2,500,000 | ||||||||||||
Conversion of shares (in shares) | 3,029,900 | ||||||||||||
Third anniversary expected liquidation preference (in dollars per share) | $ / shares | $ 25 | $ 25 | |||||||||||
Cumulative accrued but unpaid dividends | $ | $ 0 | $ 0 | |||||||||||
Per share average of cumulative preferred dividends (in dollars per share) | $ / shares | $ 0.38 | $ 0.83 | |||||||||||
Reverse stock split | 1 | ||||||||||||
Number of common stock exchanged for each preferred share | 1 | 1 | |||||||||||
Number of common stock tendered | 2,129,572 | 900,328 | |||||||||||
Issuances of preferred stock | 2,129,572 | 900,328 | |||||||||||
Preferred stock cumulative dividend | 6% | ||||||||||||
Number of directors | director | 1 | ||||||||||||
Number of directors in arrears | director | 8 | ||||||||||||
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 | $ | $ 700,000 |
Stockholders' Equity - Treasury
Stockholders' Equity - Treasury Stock (Details) - shares | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2022 | |
Stockholders' Equity | ||
Shares repurchased (in shares) | 46,452 | |
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares) | 76,179 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 15, 2021 | Sep. 30, 2022 |
Warrants | ||
Warrants outstanding | 486,591 | |
Private Placement | ||
Warrants | ||
Warrants outstanding | 9,731,819 | |
Exercise price of warrant per one Common Stock (in US$ per share) | $ 80 | |
Shares issued in stock | 486,591 | |
Common stock issued price | $ 55 | |
Gross proceeds from offering expected | $ 26.8 | |
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 | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) agreement | Sep. 30, 2021 USD ($) | Dec. 31, 2016 | |
Related-Party Transactions | |||||
Amount of related party transaction | $ 2,016 | $ 2,744 | $ 6,189 | $ 7,199 | |
Related party expense | 2,016 | 2,744 | 6,189 | 7,199 | |
HGM | Travel Expense | |||||
Related-Party Transactions | |||||
Amount of related party transaction | 100 | 100 | $ 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% | ||||
Affiliate of largest stockholder | |||||
Related-Party Transactions | |||||
Rental expenses | 100 | 100 | $ 200 | 200 | |
HOV Services, Ltd | Data Capture And Technology Services | Cost of revenue | |||||
Related-Party Transactions | |||||
Amount of related party transaction | 400 | 300 | 1,000 | 1,000 | |
SourceHOV | Master Service Agreement | |||||
Related-Party Transactions | |||||
Revenue share percentage | 75% | ||||
SourceHOV | Entities affiliated with HGM managed funds | Master Service Agreement | |||||
Related-Party Transactions | |||||
Related party expense | $ 1,500 | $ 1,500 | $ 4,600 | $ 4,200 |
Related-Party Transactions - Co
Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related-Party Transactions | ||||
Related party expense | $ 2,016 | $ 2,744 | $ 6,189 | $ 7,199 |
Consulting Services | Oakana Holdings Inc | ||||
Related-Party Transactions | ||||
Related party expense | $ 100 | |||
Consulting Services | Oakana Holdings Inc | Maximum | ||||
Related-Party Transactions | ||||
Related party expense | $ 100 | $ 100 | $ 100 |
Related-Party Transactions - Su
Related-Party Transactions - Subscription Agreements (Details) - Subscription Agreements $ in Millions | 12 Months Ended | |
Aug. 11, 2022 USD ($) shares | Dec. 31, 2021 USD ($) director shares | |
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 | 3,125 | |
Proceeds from issuance of stocks | $ | $ 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 | 70,921 | 7,936 |
Proceeds from issuance of stocks | $ | $ 0.1 | $ 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 | 3,174 | |
Martin Akins [Member] | Maximum | ||
Related Party Transaction [Line Items] | ||
Proceeds from issuance of stocks | $ | $ 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 | 3,968 | |
Proceeds from issuance of stocks | $ | $ 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 | 1,984 | |
John Rexford [Member] | Maximum | ||
Related Party Transaction [Line Items] | ||
Proceeds from issuance of stocks | $ | $ 0.1 |
Related-Party Transactions - _2
Related-Party Transactions - Subscription, Voting and Redemption Agreement (Details) | May 19, 2022 Vote $ / shares shares | Sep. 30, 2022 $ / shares | May 18, 2022 shares | May 17, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Related Party Transaction [Line Items] | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Redeemable Special Voting Preferred Stock | |||||
Related Party Transaction [Line Items] | |||||
Shares issued in stock | shares | 1,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
GP-HGM LLC [Member] | Redeemable Special Voting Preferred Stock | |||||
Related Party Transaction [Line Items] | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 100 | ||||
Voting preferred stock, authorized shares | shares | 1,000,000 | ||||
Number of votes per share | Vote | 20,000 | ||||
Preferred stock, shares authorized, increase proposal | shares | 40,000,000 | 20,000,000 |
Related-Party Transactions - _3
Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | $ 504 | $ 715 |
Payables | 1,698 | 1,484 |
HOV Services, Ltd | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | 402 | 708 |
Rule 14, LLC | ||
Payable and Receivable Balances with Affiliates | ||
Payables | 1,698 | 1,483 |
HGM | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | $ 102 | 7 |
Oakana Holdings Inc | ||
Payable and Receivable Balances with Affiliates | ||
Payables | $ 1 |
Segment and Geographic Area I_3
Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment information | ||||
Number of segments | segment | 3 | |||
Revenue | $ 264,038 | $ 279,229 | $ 810,206 | $ 872,294 |
Cost of revenue (exclusive of depreciation and amortization) | 217,842 | 211,731 | 658,623 | 653,398 |
Segment profit | 46,196 | 67,498 | 151,583 | 218,896 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 44,369 | 43,244 | 137,604 | 121,519 |
Depreciation and amortization | 17,737 | 19,094 | 53,942 | 58,113 |
Impairment of goodwill and other intangible assets | 29,565 | 29,565 | ||
Related party expense | 2,016 | 2,744 | 6,189 | 7,199 |
Interest expense, net | 40,897 | 41,757 | 122,928 | 127,755 |
Debt modification and extinguishment costs (gain), net | (4,696) | (28,070) | 4,305 | (28,070) |
Sundry expense (income), net | 781 | 136 | 347 | (438) |
Other expense (income), net | (1,115) | 366 | 12,419 | 1,169 |
Net loss before income taxes | (83,358) | (11,773) | (215,716) | (68,351) |
I T P S Segment | ||||
Segment information | ||||
Revenue | 185,309 | 208,304 | 580,320 | 657,438 |
Cost of revenue (exclusive of depreciation and amortization) | 157,269 | 157,721 | 477,559 | 499,892 |
Segment profit | 28,040 | 50,583 | 102,761 | 157,546 |
H S Segment | ||||
Segment information | ||||
Revenue | 60,955 | 53,995 | 173,940 | 161,292 |
Cost of revenue (exclusive of depreciation and amortization) | 48,316 | 41,945 | 140,767 | 116,736 |
Segment profit | 12,639 | 12,050 | 33,173 | 44,556 |
L L P S Segment | ||||
Segment information | ||||
Revenue | 17,774 | 16,930 | 55,946 | 53,564 |
Cost of revenue (exclusive of depreciation and amortization) | 12,257 | 12,065 | 40,297 | 36,770 |
Segment profit | $ 5,517 | $ 4,865 | $ 15,649 | $ 16,794 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Nov. 14, 2022 | Sep. 30, 2022 | |
BRCC Facility | ||
Subsequent Event [Line Items] | ||
Debt instrument, repayment made in cash | $ 59.2 | |
Common ATM Program-3 | ||
Subsequent Event [Line Items] | ||
Shares issued | 16,743,797 | |
Weighted average price | $ 14.931 | |
Gross proceeds | $ 250 | |
Net proceeds | $ 241 | |
Subsequent Events | BRCC Facility | ||
Subsequent Event [Line Items] | ||
Debt instrument, repayment made in cash | $ 5.3 | |
Subsequent Events | Common ATM Program-3 | ||
Subsequent Event [Line Items] | ||
Shares issued | 42,150,362 | |
Weighted average price | $ 0.281 | |
Gross proceeds | $ 11.8 | |
Net proceeds | $ 11.4 |