Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-56267 | |
Entity Registrant Name | SEZZLE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-0971660 | |
Entity Address, Address Line One | 251 N 1st Avenue | |
Entity Address, Address Line Two | Ste. 200 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55401 | |
Country Region | +1 | |
City Area Code | 651 | |
Local Phone Number | 504 5402 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 206,902,974 | |
Entity Central Index Key | 0001662991 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 58,371,390 | $ 76,983,728 |
Restricted cash, current | 2,188,775 | 1,886,440 |
Notes receivable, net | 110,486,449 | 133,986,583 |
Other receivables, net | 2,125,753 | 5,084,099 |
Prepaid expenses and other current assets | 3,510,655 | 3,350,053 |
Total current assets | 176,683,022 | 221,290,903 |
Non-Current Assets | ||
Internally developed intangible assets, net | 1,115,354 | 910,584 |
Property and equipment, net | 607,136 | 662,472 |
Operating right-of-use assets | 225,530 | 285,865 |
Restricted cash, non-current | 20,000 | 20,000 |
Other assets | 244,486 | 233,752 |
Total Assets | 178,895,528 | 223,403,576 |
Current Liabilities | ||
Merchant accounts payable | 95,273,209 | 96,516,668 |
Operating lease liabilities | 153,418 | 171,959 |
Accrued liabilities | 13,897,456 | 7,996,772 |
Other payables | 4,643,610 | 2,874,046 |
Total current liabilities | 113,967,693 | 107,559,445 |
Long Term Liabilities | ||
Long term debt | 250,000 | 250,000 |
Lease liabilities | 53,599 | 90,962 |
Line of credit, net of unamortized debt issuance costs of $903,267 and $1,088,869, respectively | 51,896,733 | 77,711,131 |
Total Liabilities | 166,168,025 | 185,611,538 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock, $0.00001 par value; 750,000,000 shares authorized; 207,631,997 and 204,891,057 shares issued, respectively; 206,754,032 and 204,230,939 shares outstanding, respectively | 2,069 | 2,044 |
Additional paid-in capital | 171,445,100 | 168,338,673 |
Stock subscriptions: 1,343,750 and 20,729 shares subscribed, respectively | (305,833) | (18,545) |
Treasury stock, at cost: 877,965 and 660,118 shares, respectively | (3,994,461) | (3,691,322) |
Accumulated other comprehensive income | 971,897 | 563,911 |
Accumulated deficit | (155,391,269) | (127,402,723) |
Total Stockholders' Equity | 12,727,503 | 37,792,038 |
Total Liabilities and Stockholders' Equity | $ 178,895,528 | $ 223,403,576 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parentheticals) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Unamortized debt issuance costs | $ 903,267 | $ 1,088,869 |
Common stock par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (shares) | 750,000,000 | 750,000,000 |
Common stock issued (shares) | 207,631,997 | 204,891,057 |
Common stock outstanding (shares) | 206,754,032 | 204,230,939 |
Stock subscriptions (shares) | 1,343,750 | 20,729 |
Treasury stock at cost (shares) | 877,965 | 660,118 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income | ||
Total income | $ 27,633,962 | $ 26,030,758 |
Operating Expenses | ||
Personnel | 16,379,638 | 12,302,173 |
Transaction expense | 11,794,369 | 8,924,927 |
Third-party technology and data | 2,076,314 | 1,151,193 |
Marketing, advertising, and tradeshows | 5,298,707 | 1,523,770 |
General and administrative | 7,743,061 | 2,383,515 |
Provision for uncollectible accounts | 10,465,595 | 8,576,978 |
Total operating expenses | 53,757,684 | 34,862,556 |
Operating Loss | (26,123,722) | (8,831,798) |
Other Expense | ||
Net interest expense | (1,615,339) | (1,353,619) |
Other expense, net | (228,339) | (57,038) |
Loss on extinguishment of line of credit | 0 | (1,092,679) |
Loss before taxes | (27,967,400) | (11,335,134) |
Income tax expense | 21,146 | 18,223 |
Net Loss | (27,988,546) | (11,353,357) |
Other Comprehensive Income | ||
Foreign currency translation adjustment | 407,986 | 134,931 |
Total Comprehensive Loss | $ (27,580,560) | $ (11,218,426) |
Net Losses per Share: | ||
Basic loss per common share (in usd per share) | $ (0.14) | $ (0.06) |
Diluted loss per common share (in usd per share) | $ (0.14) | $ (0.06) |
Net Losses per Share: | ||
Basic weighted average shares outstanding (shares) | 204,572,060 | 197,088,869 |
Diluted weighted average shares outstanding (shares) | 204,572,060 | 197,088,869 |
Sezzle income | ||
Income | ||
Total income | $ 24,127,630 | $ 22,252,390 |
Account reactivation fee income | ||
Income | ||
Total income | $ 3,506,332 | $ 3,778,368 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (unaudited) - USD ($) | Total | Common Stock | Additional Paid-in Capital | Stock Subscriptions | Treasury Stock, At Cost | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance (shares) at Dec. 31, 2020 | 196,926,674 | ||||||
Beginning balance at Dec. 31, 2020 | $ 59,958,417 | $ 1,970 | $ 112,640,974 | $ (69,440) | $ (875,232) | $ 494,505 | $ (52,234,360) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation | 2,183,589 | 2,183,589 | |||||
Stock option exercises (shares) | 202,350 | ||||||
Stock option exercises | 70,584 | $ 2 | 70,582 | ||||
Restricted stock issuances and vesting of awards (shares) | 290,989 | ||||||
Restricted stock issuances and vesting of awards | 473,111 | 473,111 | |||||
Stock subscriptions receivable related to stock option exercises (shares) | 56,250 | ||||||
Stock subscriptions receivable related to stock option exercises | 0 | 61,925 | (61,925) | ||||
Stock subscriptions collected related to stock option exercises | 69,440 | 69,440 | |||||
Repurchase of common stock (shares) | (84,055) | ||||||
Repurchase of common stock | (407,434) | (407,434) | |||||
Foreign currency translation adjustment | 134,931 | 134,931 | |||||
Net Loss | (11,353,357) | (11,353,357) | |||||
Ending balance (shares) at Mar. 31, 2021 | 197,392,208 | ||||||
Ending balance at Mar. 31, 2021 | 51,129,281 | $ 1,972 | 115,430,181 | (61,925) | (1,282,666) | 629,436 | (63,587,717) |
Beginning balance (shares) at Dec. 31, 2021 | 204,230,939 | ||||||
Beginning balance at Dec. 31, 2021 | 37,792,038 | $ 2,044 | 168,338,673 | (18,545) | (3,691,322) | 563,911 | (127,402,723) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity based compensation | 1,768,718 | 1,768,718 | |||||
Stock option exercises (shares) | 643,678 | ||||||
Stock option exercises | 82,526 | $ 6 | 82,520 | ||||
Restricted stock issuances and vesting of awards (shares) | 753,512 | ||||||
Restricted stock issuances and vesting of awards | 949,377 | $ 8 | 949,369 | ||||
Stock subscriptions receivable related to stock option exercises (shares) | 1,343,750 | ||||||
Stock subscriptions receivable related to stock option exercises | 0 | $ 13 | 305,820 | (305,833) | |||
Stock subscriptions collected related to stock option exercises | 18,545 | 18,545 | |||||
Repurchase of common stock (shares) | (217,847) | ||||||
Repurchase of common stock | (303,141) | $ (2) | (303,139) | ||||
Foreign currency translation adjustment | 407,986 | 407,986 | |||||
Net Loss | (27,988,546) | (27,988,546) | |||||
Ending balance (shares) at Mar. 31, 2022 | 206,754,032 | ||||||
Ending balance at Mar. 31, 2022 | $ 12,727,503 | $ 2,069 | $ 171,445,100 | $ (305,833) | $ (3,994,461) | $ 971,897 | $ (155,391,269) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Operating Activities: | |||
Net loss | $ (27,988,546) | $ (11,353,357) | |
Adjustments to reconcile net loss to net cash provided from (used for) operating activities: | |||
Depreciation and amortization | 223,967 | 163,401 | |
Provision for uncollectible accounts | 10,465,595 | 8,576,978 | $ 52,621,682 |
Provision for other uncollectible receivables | 2,514,301 | 1,319,290 | |
Equity based compensation and restricted stock vested | 2,718,095 | 2,656,700 | |
Amortization of debt issuance costs | 185,602 | 130,457 | |
Loss on extinguishment of line of credit | 0 | 1,092,679 | |
Changes in operating assets and liabilities: | |||
Notes receivable | 13,221,231 | (25,514,031) | |
Other receivables | 444,861 | (1,388,618) | |
Prepaid expenses and other assets | (180,022) | (294,996) | |
Merchant accounts payable | (1,467,348) | 15,588,578 | |
Other payables | 1,776,019 | 611,611 | |
Accrued liabilities | 5,891,198 | 3,016,748 | |
Operating leases | 4,387 | (14,440) | |
Net Cash Provided from (Used for) Operating Activities | 7,809,340 | (5,409,000) | |
Investing Activities: | |||
Purchase of property and equipment | (56,488) | (189,838) | |
Internally developed intangible asset additions | (317,681) | (199,465) | |
Net Cash Used for Investing Activities | (374,169) | (389,303) | |
Financing Activities: | |||
Proceeds from line of credit | 0 | 26,666,667 | |
Payments to line of credit | (26,000,000) | (39,666,667) | |
Payments of debt issuance costs | 0 | (1,617,720) | |
Payment of debt extinguishment costs | 0 | (1,000,000) | |
Proceeds from stock option exercises | 82,526 | 70,584 | |
Stock subscriptions collected related to stock option exercises | 18,545 | 69,440 | |
Repurchase of common stock | (303,141) | (579,212) | |
Net Cash Used for Financing Activities | (26,202,070) | (16,056,908) | |
Effect of exchange rate changes on cash | 456,896 | 129,389 | |
Net decrease in cash, cash equivalents, and restricted cash | (18,766,899) | (21,855,211) | |
Cash, cash equivalents, and restricted cash, beginning of year | 78,890,168 | 89,103,903 | 89,103,903 |
Cash, cash equivalents, and restricted cash, end of period | 60,580,165 | 67,378,081 | $ 78,890,168 |
Noncash investing and financing activities: | |||
Withholding of restricted stock units to cover employee tax withholding | 0 | 139,676 | |
Supplementary disclosures: | |||
Interest paid | 1,567,639 | 1,488,369 | |
Income taxes paid | $ 0 | $ 8,326 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation and Principles of Consolidation These unaudited consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. While these consolidated financial statements and the accompanying notes thereof reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These consolidated financial statements and their accompanying notes should be read in conjunction with the consolidated financial statement disclosures in our 2021 annual consolidated financial statements. Operating results reported for the three months ended March 31, 2022 might not be indicative of the results for any subsequent period or the entire year ending December 31, 2022. Sezzle Inc. (the “Company” or “Sezzle”) uses the same accounting policies in preparing quarterly and annual consolidated financial statements. The Company consolidates the accounts of subsidiaries for which it has a controlling financial interest. The accompanying consolidated financial statements include all the accounts and activity of Sezzle Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. Segments We conduct our operations through a single operating segment and, therefore, one reportable segment. There are no significant concentrations by state or geographical location, nor are there any significant individual customer concentrations by balance. Fair Value Fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; • Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and • Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company measures the value of its money market securities on a regular basis. The fair value of its money market securities, totaling $1,893,726 and $6,408,389 as of March 31, 2022 and December 31, 2021, respectively, are based on Level 1 inputs and are included within cash and cash equivalents on the consolidated balance sheets. Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets, which includes property, equipment, and internally developed intangible assets, for impairment whenever events and circumstances indicate that the assets’ carrying value may not be recoverable from the future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects; the manner in which the asset is used; and the effects of obsolescence, demand, competition, and other economic factors. Impairment costs are recorded in general and administrative within operating expenses in the consolidated statements of operations and comprehensive loss. There were no impairment losses for the three months ended March 31, 2022 and 2021. Subsequent Events The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet as of March 31, 2022 for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued. Liquidity and Financial Condition The Company meets its liquidity requirements primarily through proceeds from its line of credit, of which it is subject to various covenants. During the year ended December 31, 2021, the Company incurred net losses from its operations, which if continued at the same level in future periods would result in the breach of one or more of such line of credit covenants. The Company's line of credit is a significant component of its working capital management. On February 25, 2022 the Company amended its existing line of credit covenants as disclosed in Note 7. Line of Credit within the notes to the consolidated financial statements. Additionally, on March 10, 2022 the Company undertook a workforce reduction to provide the Company with an additional cost savings. Management is also exploring scaling back the Company’s international operations to further reduce the Company’s future expenses. Management believes that the implementation of these plans will allow the Company to continue as a going concern through at least May 16, 2023. There are no assurances that the Company’s implementation of these efforts will be successful, or that the degree of success will be sufficient to meet its current operating costs and requirements under its line of credit covenants. If the Company is unable to increase its profitability and liquidity, it may not be able to fund its ongoing operations. The accompanying consolidated financial statements assume that the Company will continue as a going concern and have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties. Recent Accounting Pronouncements In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2022-02, “Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures” which requires an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. As a smaller reporting company, Sezzle plans to adopt this standard beginning January 1, 2023 in conjunction with ASU 2016-13. At that time, Sezzle will include this additional disclosure within its vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination. None of the other recent accounting pronouncements issued by the FASB during the three months ended March 31, 2022 are within scope for the Company; therefore, it does not expect any of the other recent accounting pronouncements issued to have a material effect on the Company’s consolidated financial statements. |
Total Income
Total Income | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Total Income | Total Income Sezzle Income Sezzle income as disclosed within the consolidated statements of operations and comprehensive loss is comprised of merchant fees and rescheduled payment fees, less note origination costs. Sezzle earns its income primarily from fees paid by merchants in exchange for Sezzle’s payment processing services. These fees are applied to the underlying sales to consumers passing through the Company’s platform and are predominantly based on a percentage of the consumer order value plus a fixed fee per transaction. Consumer installment payment plans typically consist of four installments, with the first payment made at the time of purchase and subsequent payments coming due every two weeks thereafter. Consumers are allowed to reschedule their initial installment one time without incurring a reschedule fee and the principal of a rescheduled payment is not considered to be delinquent. If consumers reschedule a payment more than once in the same order cycle they are subject to a reschedule fee. Note origination costs are comprised of costs paid to third-parties to obtain data for underwriting consumers which result in a successful transaction. Such costs which result in a declined order are recorded within third-party technology and data on the consolidated statements of operations and comprehensive loss. Sezzle income is initially recorded as a reduction to notes receivable, net, within the consolidated balance sheets. Sezzle income is then recognized over the average duration of the note using the effective interest rate method. Total Sezzle income to be recognized over the duration of existing notes receivable outstanding was $4,611,497 and $5,240,919 as of March 31, 2022 and December 31, 2021, respectively. Total Sezzle income recognized was $24,127,630 and $22,252,390 for the three months ended March 31, 2022 and 2021, respectively. Sezzle income in the fourth quarter has historically been strongest for the Company, in line with consumer spending habits during the holiday shopping season. Account Reactivation Fee Income Sezzle also earns income from consumers in the form of account reactivation fees. These fees are assessed to consumers who fail to make a timely payment. Sezzle allows, at a minimum and subject to state jurisdiction regulation, a 48-hour waiver period where fees are dismissed if the installment is paid by the consumer. Account reactivation fees are recognized at the time the fee is charged to the consumer, less an allowance for uncollectible amounts. Account reactivation fee income recognized totaled $3,506,332 and $3,778,368 for the three months ended March 31, 2022 and 2021, respectively. |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable Sezzle’s notes receivable comprise outstanding consumer principal and reschedule fees that Sezzle reasonably expects to collect from its consumers. As of March 31, 2022 and December 31, 2021, Sezzle’s notes receivable, related allowance for uncollectible accounts, and deferred net origination fees are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Notes receivable, gross $ 134,799,279 $ 162,341,675 Less allowance for uncollectible accounts: Balance at beginning of year (23,114,173) (11,133,146) Provision (10,465,595) (52,621,682) Charge-offs, net of recoveries totaling $1,427,547 and $6,153,728, respectively 13,878,435 40,640,655 Total allowance for uncollectible accounts (19,701,333) (23,114,173) Notes receivable, net of allowance 115,097,946 139,227,502 Deferred Sezzle income (4,611,497) (5,240,919) Notes receivable, net $ 110,486,449 $ 133,986,583 Sezzle maintains an allowance for uncollectible accounts at a level necessary to absorb estimated probable losses on principal and reschedule fee receivables from consumers. Any amounts delinquent after 90 days are charged-off with an offsetting reversal of the allowance for doubtful accounts through the provision for uncollectible accounts. Additionally, amounts identified as no longer collectible—such as when a consumer becomes deceased or bankrupt—are charged off immediately. Principal payments recovered after the 90 day charge-off period are recognized as a reduction to the allowance for uncollectible accounts in the period the receivable is recovered. Sezzle has not changed the methodology for estimating its allowance for uncollectible accounts during the three months ended March 31, 2022. Sezzle uses its judgment to evaluate the allowance for uncollectible accounts based on current economic conditions and historical performance of consumer payments. The historical vintages are grouped into semi-monthly populations for purposes of the allowance assessment. The balances of historical cumulative charge-offs by vintage support the calculation for estimating the allowance for uncollectible accounts for vintages outstanding less than 90 days. Sezzle estimates the allowance for uncollectible accounts by segmenting consumer accounts receivable by the number of days balances are delinquent. Balances that are at least one day past the initial due date are considered delinquent. Balances that are not delinquent are considered current. Consumer notes receivable are charged-off following the passage of 90 days without receiving a qualifying payment, upon notice of bankruptcy, or death. Consumers are allowed to reschedule a payment one time without incurring a reschedule fee and the principal of a rescheduled payment is not considered to be delinquent. If consumers reschedule a payment more than once in the same order cycle they are subject to a reschedule fee. Deferred Sezzle income is comprised of unrecognized merchant fees and consumer reschedule fees net of direct note origination costs, which are recognized over the duration of the note with the consumer and are recorded as an offset to Sezzle income on the consolidated statements of operations and comprehensive loss. Sezzle’s notes receivable had a weighted average days outstanding of 34 days, consistent with the prior year’s duration. The following table summarizes Sezzle’s gross notes receivable and related allowance for uncollectible accounts as of March 31, 2022 and December 31, 2021: As of March 31, 2022 December 31, 2021 Gross Receivables Less Allowance Net Receivables Gross Receivables Less Allowance Net Receivables Current $ 114,963,752 $ (5,377,350) $ 109,586,402 $ 139,024,393 $ (7,989,217) $ 131,035,176 Days past due: 1–28 8,096,237 (3,707,669) 4,388,568 12,263,154 (5,126,611) 7,136,543 29–56 4,306,780 (3,390,980) 915,800 5,266,164 (4,267,236) 998,928 57–90 7,432,510 (7,225,334) 207,176 5,787,964 (5,731,109) 56,855 Total $ 134,799,279 $ (19,701,333) $ 115,097,946 $ 162,341,675 $ (23,114,173) $ 139,227,502 |
Other Receivables
Other Receivables | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Other Receivables | Other Receivables As of March 31, 2022 and December 31, 2021, the balance of other receivables, net, on the consolidated balance sheets is comprised of the following: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, net $ 348,401 $ 1,325,443 Receivables from merchants, net 1,777,352 3,758,656 Other receivables, net $ 2,125,753 $ 5,084,099 Account reactivation fees are applied to principal installments that are delinquent for more than 48 hours (or longer depending on the regulations within a specific state jurisdiction) after the scheduled installment payment date. Any account reactivation fees associated with a delinquent payment are considered to be the same number of days delinquent as the principal payment. Account reactivation fees receivable, net, is comprised of outstanding account reactivation fees that Sezzle reasonably expects to collect from its consumers. As of March 31, 2022 and December 31, 2021, Sezzle’s account reactivation fees receivable and related allowance for uncollectible accounts are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, gross $ 2,143,361 $ 3,016,514 Less allowance for uncollectible accounts: Balance at start of period (1,691,071) (1,071,588) Provision (2,320,268) (6,128,851) Charge-offs, net of recoveries totaling $327,068 and $1,273,319, respectively 2,216,379 5,509,368 Total allowance for uncollectible accounts (1,794,960) (1,691,071) Account reactivation fees receivable, net $ 348,401 $ 1,325,443 Sezzle maintains the allowance at a level necessary to absorb estimated probable losses on consumer account reactivation fee receivables. Any amounts delinquent after 90 days are charged-off with an offsetting reversal of the allowance for doubtful accounts through the provision for uncollectible accounts. Additionally, amounts identified as no longer collectible—such as when a consumer becomes deceased or bankrupt—are charged off immediately. Payments recovered after the 90 day charge-off period are recognized as a reduction to the allowance for uncollectible accounts in the period the receivable is recovered. Sezzle has not changed the methodology for estimating its allowance for uncollectible accounts during the three months ended March 31, 2022. Receivables from merchants primarily represent merchant fees receivable for orders settled with the Sezzle Virtual Card solution. Such receivables totaled $1,718,834 and $3,738,765 as of March 31, 2022 and December 31, 2021, respectively. Virtual card transactions are settled with the merchant for the full purchase price at the point of sale and Sezzle separately invoices the merchant for the merchant fees due to Sezzle. Additionally, the Company had other uncollectible receivables, net, which totaled $58,518 and $19,891 as of March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022 and 2021, the Company recorded direct write-downs of $194,033 and $344,636, respectively, related to these other uncollectible receivables from merchants which are included in transaction expense on the consolidated statements of operations and comprehensive loss. Such write-downs are also included in the provision for uncollectible other receivables on the consolidated statements of cash flows. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Sezzle is currently entered into operating leases for its corporate office spaces in the United States, Canada, India, Lithuania, and Brazil. Total lease expense incurred for the three months ended March 31, 2022 and 2021 was $108,659 and $137,180, respectively. Lease expense is recognized within general and administrative on the consolidated statements of operations and comprehensive loss. Cash payments for leases totaled $105,266 and $154,022 for the three months ended March 31, 2022 and 2021, respectively Right-of-use assets and lease liabilities are recognized as of the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods that the Company is reasonably certain to exercise. Right-of-use assets and lease liabilities are recorded within current assets and liabilities, respectively, on the consolidated balance sheets. The Company has elected not to recognize right-of-use assets and lease liabilities on short-term leases with terms of one year or less. The expected maturity of the Company’s operating leases as of March 31, 2022 is as follows: 2022 $ 134,842 2023 90,822 2024 12,540 Interest (31,187) Present value of lease liabilities $ 207,017 As of March 31, 2022, the weighted average remaining term of the Company’s operating leases is 1.4 years and its weighted average discount rate for all operating leases is 5.25%. As of December 31, 2021, the weighted average remaining term of the Company’s operating leases was 1.5 years and its weighted average discount rate for all operating leases was 5.25%. As of March 31, 2022, Sezzle has not entered into any lease agreements that contain residual value guarantees or financial covenants. |
Merchant Accounts Payable
Merchant Accounts Payable | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Merchant Accounts Payable | Merchant Accounts Payable Sezzle offers its merchants an interest bearing program in which merchants may defer payment from the Company in exchange for interest. Merchant accounts payable in total were $95,273,209 and $96,516,668 as of March 31, 2022 and December 31, 2021, respectively, as disclosed in the consolidated balance sheets. Of these amounts, $77,793,261 and $78,097,910 were recorded within the merchant interest program balance as of March 31, 2022 and December 31, 2021, respectively. Effective March 1, 2022, deferred payments retained in the program bear interest at the Secured Overnight Financing Rate (“SOFR”) plus three percent on an annual basis, compounding daily. Prior to that, deferred payments retained in the program bore interest at the LIBOR daily (3 month) rate plus three percent on an annual basis, compounding daily. The weighted average annual percentage yield was 3.19% and 3.27% for the three months ended March 31, 2022 and 2021, respectively. Interest expense associated with the program totaled $593,576 and $462,735 for the three months ended March 31, 2022 and 2021, respectively. Deferred payments are due on demand, up to $250,000 during any seven day period, at the request of the merchant. Any request larger than $250,000 is honored after 7 days. Sezzle reserves the right to impose additional limits on the program and make changes to the program without notice or limits. These limits and changes to the program can include but are not limited to: maximum balances, withdrawal amount limits, and withdrawal frequency. |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit The Company had an outstanding line of credit balance of $52,800,000 as of March 31, 2022, recorded within line of credit, net, as a non-current liability on the consolidated balance sheets. As of March 31, 2022, Sezzle had pledged $162,882,057 of its notes receivable and had an unused borrowing capacity of $39,717,682. For the three months ended March 31, 2022 and 2021, interest expense relating to the utilization of its lines of credit was $788,298 and $669,248, respectively. Interest expense relating to unused daily amounts was $82,300 and $100,180 for the three months ended March 31, 2022 and 2021, respectively. Interest expense recorded for the amortization of debt issuance costs related to its line of credit totaled $185,602 and $130,457 for the three months ended March 31, 2022 and 2021, respectively. Effective January 1, 2022, the Company amended its Revolving Credit and Security Agreement, dated as of February 10, 2021, as amended (the “2021 Credit Agreement” and, such amendment, the “January Credit Agreement Amendment”), which was entered into by Sezzle Funding SPE II, LLC, a wholly owned indirect subsidiary of Sezzle (the “Borrower”), Goldman Sachs Bank USA (the “Class A senior lender”), and Bastion Consumer Funding II LLC and Bastion Funding IV LLC (the “Class B mezzanine lenders”). The January Credit Agreement replaced references to LIBOR with the U.S. Federal Reserve’s Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.262% (collectively, “Adjusted SOFR”). The 2021 Credit Agreement carries an interest rate of Adjusted SOFR+3.375% and Adjusted SOFR+10.689% (the Adjusted SOFR floor rate is set at 0.25%) for funds borrowed from the Class A senior lender and the Class B mezzanine lenders, respectively. As of March 31, 2022, the weighted average interest rate was 5.53%. On February 25, 2022, the Company entered into an additional amendment (the “February Credit Agreement Amendment”) to the 2021 Credit Agreement. As part of the February Credit Agreement Amendment, certain definitions and events of default under the 2021 Credit Agreement were amended to clarify the terms of applicable cure periods, involving replacement of the servicer and a required change in the level of availability and data exchanged with the backup servicer. On February 25, 2022, the Company entered into Amendment No. 1 (the “Limited Guaranty Amendment”) to that certain Limited Guaranty and Indemnity Agreement, dated as of February 10, 2021, by and among the Company (as “Limited Guarantor” thereunder) and the Administrative Agent (the “Limited Guaranty”). The Limited Guaranty Amendment adjusted and provided alternatives for certain Limited Guarantor financial covenant measurement thresholds and required certain Limited Guarantor compliance reporting obligations during a defined modification period. The length of the modification period is dependent in part upon the ongoing status and progress towards the closing of the Zip Merger. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Merchant Contract Obligations The Company has entered into several agreements with third-parties in which Sezzle will reimburse these third-parties for mutually agreed upon co-branded marketing and advertising costs. As of March 31, 2022 and December 31, 2021, the Company had outstanding agreements that stipulate Sezzle will commit to spend up to approximately $32.5 million and $35.1 million, respectively, in marketing and advertising spend in future periods. These agreements generally have contractual terms ranging from one Expenses incurred relating to these agreements totaled $4,361,830 and $1,105,936 for the three months ended March 31, 2022 and 2021, respectively. These expenses are included within marketing, advertising, and tradeshows on the consolidated statements of operations and comprehensive loss. Sezzle had $165,622 and $83,333 recorded as a prepaid expense related to these agreements in the consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively. Certain agreements also contain provisions that may require payments by the Company and are contingent on Sezzle and/or the third party meeting specified criteria, such as achieving volume targets and implementation benchmarks. As of March 31, 2022 and December 31, 2021, the Company had outstanding agreements that stipulate Sezzle may spend approximately $7.7 million and $6.7 million, respectively, in future periods if such criteria are met. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per ShareThe computation for basic net loss per share is established by dividing net losses for the period by the weighted average shares outstanding during the reporting period, including repurchases carried as treasury stock. Diluted net loss per share is computed in a similar manner, with the weighted average shares outstanding increasing from the assumed exercise of employee stock options (including options classified as liabilities) and assumed vesting of restricted stock units (if dilutive). Given the Company is in a loss position, the impact of including assumed exercises of stock options and vesting of restricted stock units would have an anti-dilutive impact on the calculation of diluted net loss per share and, accordingly, diluted and basic net loss per share were equal for the three months ended March 31, 2022 and 2021. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These unaudited consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. While these consolidated financial statements and the accompanying notes thereof reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These consolidated financial statements and their accompanying notes should be read in conjunction with the consolidated financial statement disclosures in our 2021 annual consolidated financial statements. Operating results reported for the three months ended March 31, 2022 might not be indicative of the results for any subsequent period or the entire year ending December 31, 2022.Sezzle Inc. (the “Company” or “Sezzle”) uses the same accounting policies in preparing quarterly and annual consolidated financial statements. |
Principles of Consolidation | The Company consolidates the accounts of subsidiaries for which it has a controlling financial interest. The accompanying consolidated financial statements include all the accounts and activity of Sezzle Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. |
Segments | Segments We conduct our operations through a single operating segment and, therefore, one reportable segment. There are no significant concentrations by state or geographical location, nor are there any significant individual customer concentrations by balance. |
Fair Value | Fair Value Fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; • Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and • Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets, which includes property, equipment, and internally developed intangible assets, for impairment whenever events and circumstances indicate that the assets’ carrying value may not be recoverable from the future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects; the manner in which the asset is used; and the effects of obsolescence, demand, competition, and other economic factors. |
Subsequent Events | Subsequent Events The Company has evaluated events and transactions occurring subsequent to the consolidated balance sheet as of March 31, 2022 for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2022-02, “Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures” which requires an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. As a smaller reporting company, Sezzle plans to adopt this standard beginning January 1, 2023 in conjunction with ASU 2016-13. At that time, Sezzle will include this additional disclosure within its vintage disclosures required for public business entities in accordance with paragraph 326-20-50-6, which requires that an entity disclose the amortized cost basis of financing receivables by credit-quality indicator and class of financing receivable by year of origination. None of the other recent accounting pronouncements issued by the FASB during the three months ended March 31, 2022 are within scope for the Company; therefore, it does not expect any of the other recent accounting pronouncements issued to have a material effect on the Company’s consolidated financial statements. |
Allowance for Uncollectible Accounts | Sezzle maintains an allowance for uncollectible accounts at a level necessary to absorb estimated probable losses on principal and reschedule fee receivables from consumers. Any amounts delinquent after 90 days are charged-off with an offsetting reversal of the allowance for doubtful accounts through the provision for uncollectible accounts. Additionally, amounts identified as no longer collectible—such as when a consumer becomes deceased or bankrupt—are charged off immediately. Principal payments recovered after the 90 day charge-off period are recognized as a reduction to the allowance for uncollectible accounts in the period the receivable is recovered. Sezzle has not changed the methodology for estimating its allowance for uncollectible accounts during the three months ended March 31, 2022. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Notes Receivable | As of March 31, 2022 and December 31, 2021, Sezzle’s notes receivable, related allowance for uncollectible accounts, and deferred net origination fees are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Notes receivable, gross $ 134,799,279 $ 162,341,675 Less allowance for uncollectible accounts: Balance at beginning of year (23,114,173) (11,133,146) Provision (10,465,595) (52,621,682) Charge-offs, net of recoveries totaling $1,427,547 and $6,153,728, respectively 13,878,435 40,640,655 Total allowance for uncollectible accounts (19,701,333) (23,114,173) Notes receivable, net of allowance 115,097,946 139,227,502 Deferred Sezzle income (4,611,497) (5,240,919) Notes receivable, net $ 110,486,449 $ 133,986,583 As of March 31, 2022 and December 31, 2021, the balance of other receivables, net, on the consolidated balance sheets is comprised of the following: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, net $ 348,401 $ 1,325,443 Receivables from merchants, net 1,777,352 3,758,656 Other receivables, net $ 2,125,753 $ 5,084,099 As of March 31, 2022 and December 31, 2021, Sezzle’s account reactivation fees receivable and related allowance for uncollectible accounts are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, gross $ 2,143,361 $ 3,016,514 Less allowance for uncollectible accounts: Balance at start of period (1,691,071) (1,071,588) Provision (2,320,268) (6,128,851) Charge-offs, net of recoveries totaling $327,068 and $1,273,319, respectively 2,216,379 5,509,368 Total allowance for uncollectible accounts (1,794,960) (1,691,071) Account reactivation fees receivable, net $ 348,401 $ 1,325,443 |
Schedule of Gross Notes Receivable and Related Allowance by Aging | The following table summarizes Sezzle’s gross notes receivable and related allowance for uncollectible accounts as of March 31, 2022 and December 31, 2021: As of March 31, 2022 December 31, 2021 Gross Receivables Less Allowance Net Receivables Gross Receivables Less Allowance Net Receivables Current $ 114,963,752 $ (5,377,350) $ 109,586,402 $ 139,024,393 $ (7,989,217) $ 131,035,176 Days past due: 1–28 8,096,237 (3,707,669) 4,388,568 12,263,154 (5,126,611) 7,136,543 29–56 4,306,780 (3,390,980) 915,800 5,266,164 (4,267,236) 998,928 57–90 7,432,510 (7,225,334) 207,176 5,787,964 (5,731,109) 56,855 Total $ 134,799,279 $ (19,701,333) $ 115,097,946 $ 162,341,675 $ (23,114,173) $ 139,227,502 |
Other Receivables (Tables)
Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Other Receivables, Net | As of March 31, 2022 and December 31, 2021, Sezzle’s notes receivable, related allowance for uncollectible accounts, and deferred net origination fees are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Notes receivable, gross $ 134,799,279 $ 162,341,675 Less allowance for uncollectible accounts: Balance at beginning of year (23,114,173) (11,133,146) Provision (10,465,595) (52,621,682) Charge-offs, net of recoveries totaling $1,427,547 and $6,153,728, respectively 13,878,435 40,640,655 Total allowance for uncollectible accounts (19,701,333) (23,114,173) Notes receivable, net of allowance 115,097,946 139,227,502 Deferred Sezzle income (4,611,497) (5,240,919) Notes receivable, net $ 110,486,449 $ 133,986,583 As of March 31, 2022 and December 31, 2021, the balance of other receivables, net, on the consolidated balance sheets is comprised of the following: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, net $ 348,401 $ 1,325,443 Receivables from merchants, net 1,777,352 3,758,656 Other receivables, net $ 2,125,753 $ 5,084,099 As of March 31, 2022 and December 31, 2021, Sezzle’s account reactivation fees receivable and related allowance for uncollectible accounts are recorded within the consolidated balance sheets as follows: As of March 31, 2022 December 31, 2021 Account reactivation fees receivable, gross $ 2,143,361 $ 3,016,514 Less allowance for uncollectible accounts: Balance at start of period (1,691,071) (1,071,588) Provision (2,320,268) (6,128,851) Charge-offs, net of recoveries totaling $327,068 and $1,273,319, respectively 2,216,379 5,509,368 Total allowance for uncollectible accounts (1,794,960) (1,691,071) Account reactivation fees receivable, net $ 348,401 $ 1,325,443 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Expected Lease Maturity | The expected maturity of the Company’s operating leases as of March 31, 2022 is as follows: 2022 $ 134,842 2023 90,822 2024 12,540 Interest (31,187) Present value of lease liabilities $ 207,017 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Number of operating segments | segment | 1 | ||
Impairment losses | $ 0 | $ 0 | |
Money Market Securities | Level 1 | |||
Disaggregation of Revenue [Line Items] | |||
Money market securities | $ 1,893,726 | $ 6,408,389 |
Total Income (Details)
Total Income (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)installment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Typical number of installments under the Consumer installment payment plans | installment | 4 | ||
Installment period | 14 days | ||
Deferred Income | $ 4,611,497 | $ 5,240,919 | |
Total income | $ 27,633,962 | $ 26,030,758 | |
Reactivation fee waiver period | 2 days | ||
Sezzle income | |||
Disaggregation of Revenue [Line Items] | |||
Total income | $ 24,127,630 | 22,252,390 | |
Account reactivation fee income | |||
Disaggregation of Revenue [Line Items] | |||
Total income | $ 3,506,332 | $ 3,778,368 |
Notes Receivable - Schedule of
Notes Receivable - Schedule of Notes Receivable (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Receivables [Abstract] | |||
Notes receivable, gross | $ 134,799,279 | $ 162,341,675 | |
Less allowance for uncollectible accounts: | |||
Balance at beginning of year | (23,114,173) | $ (11,133,146) | (11,133,146) |
Provision | (10,465,595) | $ (8,576,978) | (52,621,682) |
Charge-offs, net of recoveries totaling $1,427,547 and $6,153,728, respectively | 13,878,435 | 40,640,655 | |
Total allowance for uncollectible accounts | (19,701,333) | (23,114,173) | |
Recoveries | 1,427,547 | 6,153,728 | |
Notes receivable, net of allowance | 115,097,946 | 139,227,502 | |
Deferred Sezzle income | (4,611,497) | (5,240,919) | |
Notes receivable, net | $ 110,486,449 | $ 133,986,583 |
Notes Receivable - Aging (Detai
Notes Receivable - Aging (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Past Due [Line Items] | |||
Weighted average days outstanding of notes receivable | 34 days | ||
Notes receivable, gross | $ 134,799,279 | $ 162,341,675 | |
Less Allowance | (19,701,333) | (23,114,173) | $ (11,133,146) |
Notes receivable, net of allowance | 115,097,946 | 139,227,502 | |
Current | |||
Financing Receivable, Past Due [Line Items] | |||
Notes receivable, gross | 114,963,752 | 139,024,393 | |
Less Allowance | (5,377,350) | (7,989,217) | |
Notes receivable, net of allowance | 109,586,402 | 131,035,176 | |
1–28 | |||
Financing Receivable, Past Due [Line Items] | |||
Notes receivable, gross | 8,096,237 | 12,263,154 | |
Less Allowance | (3,707,669) | (5,126,611) | |
Notes receivable, net of allowance | 4,388,568 | 7,136,543 | |
29–56 | |||
Financing Receivable, Past Due [Line Items] | |||
Notes receivable, gross | 4,306,780 | 5,266,164 | |
Less Allowance | (3,390,980) | (4,267,236) | |
Notes receivable, net of allowance | 915,800 | 998,928 | |
57–90 | |||
Financing Receivable, Past Due [Line Items] | |||
Notes receivable, gross | 7,432,510 | 5,787,964 | |
Less Allowance | (7,225,334) | (5,731,109) | |
Notes receivable, net of allowance | $ 207,176 | $ 56,855 |
Other Receivables - Schedule of
Other Receivables - Schedule of Other Receivables, Net (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | $ 2,125,753 | $ 5,084,099 | |
Less allowance for uncollectible accounts: | |||
Provision | (2,514,301) | $ (1,319,290) | |
Other receivables, net | 2,125,753 | 5,084,099 | |
Recoveries | 327,068 | 1,273,319 | |
Account reactivation fees receivable, net | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | 348,401 | 1,325,443 | |
Account reactivation fees receivable, gross | 2,143,361 | 3,016,514 | |
Less allowance for uncollectible accounts: | |||
Balance at start of period | (1,691,071) | $ (1,071,588) | (1,071,588) |
Provision | (2,320,268) | (6,128,851) | |
Charge-offs, net of recoveries totaling $327,068 and $1,273,319, respectively | 2,216,379 | 5,509,368 | |
Total allowance for uncollectible accounts | (1,794,960) | (1,691,071) | |
Other receivables, net | 348,401 | 1,325,443 | |
Receivables from merchants, net | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | 1,777,352 | 3,758,656 | |
Less allowance for uncollectible accounts: | |||
Other receivables, net | $ 1,777,352 | $ 3,758,656 |
Other Receivables - Narrative (
Other Receivables - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | $ 2,125,753 | $ 5,084,099 | |
Settled Merchant Fees Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | 1,718,834 | 3,738,765 | |
Other Uncollectible Receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | 58,518 | 19,891 | |
Receivables from merchants, net | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables, net | 1,777,352 | $ 3,758,656 | |
Provision for uncollectible receivables from merchants | $ 194,033 | $ 344,636 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Lease expense | $ 108,659 | $ 137,180 | |
Operating lease, payments | $ 105,266 | $ 154,022 | |
Weighted average remaining lease term | 1 year 4 months 24 days | 1 year 6 months | |
Weighted average discount rate (percent) | 5.25% | 5.25% |
Leases - Expected Lease Maturit
Leases - Expected Lease Maturity (Details) | Mar. 31, 2022USD ($) |
Leases [Abstract] | |
2022 | $ 134,842 |
2023 | 90,822 |
2024 | 12,540 |
Interest | (31,187) |
Present value of lease liabilities | $ 207,017 |
Merchant Accounts Payable (Deta
Merchant Accounts Payable (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 01, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Line Items] | ||||
Merchant accounts payable | $ 95,273,209 | $ 96,516,668 | ||
Net interest expense | 1,615,339 | $ 1,353,619 | ||
Merchant Interest Program | ||||
Payables and Accruals [Line Items] | ||||
Merchant accounts payable | $ 77,793,261 | $ 78,097,910 | ||
Spread on variable rate (percent) | 3.00% | 3.00% | ||
Weighted average yield (percent) | 3.19% | 3.27% | ||
Net interest expense | $ 593,576 | $ 462,735 | ||
Deferred payments due on demand (maximum per 7 days) | $ 250,000 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | Feb. 10, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||
Amortization of debt issuance costs | $ 185,602 | $ 130,457 | |
Line of Credit | Receivables Funding Facility | |||
Debt Instrument [Line Items] | |||
Outstanding line of credit balance | 52,800,000 | ||
Notes receivables pledged | 162,882,057 | ||
Unused borrowing capacity | 39,717,682 | ||
Interest expense | 788,298 | 669,248 | |
Interest expense on the unused capacity | 82,300 | 100,180 | |
Amortization of debt issuance costs | $ 185,602 | $ 130,457 | |
Weighted average interest rate (percent) | 5.53% | ||
Line of Credit | Receivables Funding Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread on variable rate (percent) | 0.262% | ||
Line of Credit | Receivables Funding Facility | LIBOR | Class A Senior Lender | |||
Debt Instrument [Line Items] | |||
Spread on variable rate (percent) | 3.375% | ||
LIBOR floor rate (percent) | 0.25% | ||
Line of Credit | Receivables Funding Facility | LIBOR | Class B Mezzanine Lender | |||
Debt Instrument [Line Items] | |||
Spread on variable rate (percent) | 10.689% | ||
LIBOR floor rate (percent) | 0.25% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Other Commitments [Line Items] | |||
Marketing and advertising spend commitment | $ 7,700,000 | $ 6,700,000 | |
Marketing, advertising, and tradeshows | 5,298,707 | $ 1,523,770 | |
Co-Branded Advertising Spend | |||
Other Commitments [Line Items] | |||
Marketing and advertising spend commitment | $ 32,500,000 | 35,100,000 | |
Co-Branded Advertising Spend | Minimum | |||
Other Commitments [Line Items] | |||
Term of agreement | 1 year | ||
Co-Branded Advertising Spend | Maximum | |||
Other Commitments [Line Items] | |||
Term of agreement | 3 years | ||
Co-Branded Marketing and Advertising Spend | |||
Other Commitments [Line Items] | |||
Marketing, advertising, and tradeshows | $ 4,361,830 | $ 1,105,936 | |
Prepaid expenses | $ 165,622 | $ 83,333 |