Business Combination and Bankruptcy - XBP Global completed its business combination with Exela Technologies BPA, LLC on July 29, 2025, acquiring it for $1.00 amid its voluntary bankruptcy proceedings [278]. - The company emerged from Chapter 11 bankruptcy on July 29, 2025, implementing fresh-start accounting, which resulted in a new entity for financial reporting purposes [283]. - As part of the restructuring, XBP Global increased its authorized shares to 400 million common shares and issued 81,799,821 shares to holders of Allowed Notes Claims, resulting in a total of 117,515,972 shares outstanding [284]. - The equity valuation of BPA was assessed at $407 million, leading to an overall implied equity valuation of the combined company at $585.7 million [285]. Revenue and Segments - XBP Global's revenue primarily comes from transaction processing, including payment processing and data capture, with a focus on the Americas, Europe, and increasing presence in Asia [275]. - The Applied Workflow Automation segment generated $189.4 million in revenue, a decline of $30.9 million, or 14.0%, primarily due to lower postage revenue and project completions [303]. - The Technology segment's revenue increased by $6.6 million, or 50.3%, to $19.7 million, largely due to the inclusion of a newly acquired entity [304]. - Revenue from the Applied Workflow Automation segment decreased by $85.4 million, or 13.7%, primarily due to lower postage revenue and client contract ends [323]. - Revenue from the Technology segment increased by $5.4 million, or 13.4%, to $45.9 million, largely due to the inclusion of a newly acquired entity [324]. Financial Performance - For the three months ended September 30, 2025, total revenue decreased by $24.3 million, or 10.4%, to $209.08 million from $233.4 million for the same period in 2024 [302]. - Net revenue for the nine months ended September 30, 2025, decreased by $79.9 million, or 12.0%, to $584.1 million from $664.0 million for the same period in 2024 [322]. - The company reported a net loss of $(305,838) for the three months ended September 30, 2025, compared to a net profit of $1,480,093 for the same period in 2024 [343]. - For the nine months ended September 30, 2025, the net loss was $1.1 billion [396]. - EBITDA for the three months ended September 30, 2025, was $(283,616), compared to $1,521,187 for the same period in 2024, indicating a substantial decline in operational performance [342]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $49,505, compared to $38,765 for the same period in 2024, showing an increase of approximately 28% [345]. Expenses and Costs - Cost of revenue decreased by $26.2 million, or 13.9%, compared to the prior year, with the Applied Workflow Automation segment's cost decreasing by $29.4 million, or 15.9% [305][307]. - Selling, general and administrative expenses increased by $2.1 million, or 7.9%, to $28.9 million, with SG&A expenses as a percentage of revenue rising to 13.8% [309]. - Total depreciation and amortization expenses were $12.3 million for the three months ended September 30, 2025, compared to $12.1 million for the same period in 2024 [310]. - Selling, general and administrative expenses decreased by $22.5 million, or 23.8%, to $71.9 million for the nine months ended September 30, 2025 [329]. Cash Flow and Liquidity - Cash, restricted cash, and cash equivalents totaled $64.2 million as of September 30, 2025, slightly up from $64.1 million at the end of 2024 [347]. - The company expects liquidity to be constrained until pre-petition liabilities are fully settled following its emergence from Chapter 11 [350]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $13.9 million, a significant increase compared to a net cash used of $159.9 million in the same period of 2024, reflecting a change of $173.8 million [354]. - Cash flows from operating activities resulted in a net cash used of $(146,076) million for the nine months ended September 30, 2025 [397]. - Cash flows from financing activities resulted in a net cash provided of $155,242 million for the nine months ended September 30, 2025 [397]. Debt and Financing - The company entered into exit financing arrangements, including the issuance of $183.0 million in July 2030 Notes and a $150 million revolving credit facility [288]. - The total outstanding borrowings under the Super Senior Term Loan as of September 30, 2025, were $46 million, with a maturity date set for July 28, 2028 [368]. - The Company issued approximately $183 million in aggregate principal amount of the July 2030 Notes, which bear a fixed interest rate of 12% per annum, payable quarterly starting January 15, 2026 [362]. - The Company recorded a $61.1 million reduction in the cost of revenue and a $22.5 million decrease in selling, general, and administrative expenses, contributing to improved cash flow [356][357]. Assets and Liabilities - Total assets as of September 30, 2025, amounted to $947.9 million, with total liabilities of $817.4 million [393]. - The current portion of long-term debt was $34.9 million, contributing to total current liabilities of $330.4 million [393]. - The company’s total stockholder's equity was reported at $130.5 million as of September 30, 2025 [393]. Tax and Goodwill - Goodwill impairment for the three months ended September 30, 2025, was $295.8 million, with $215.8 million attributed to the Applied Workflow Automation segment and $80.0 million to the Technology segment [311][331]. - Income tax expense for the nine months ended September 30, 2025, was $39.2 million, up from $9.4 million for the same period in 2024, reflecting a significant increase due to goodwill impairment and reorganization items [338]. - The estimated annual effective tax rate for the three months ended September 30, 2025, was 3.0%, significantly lower than the expected U.S. statutory tax rate of 21.0% [318]. Strategic Outlook - The company anticipates future growth opportunities driven by its proprietary platforms and automation solutions, which are designed to enhance operational efficiency for clients [276]. - The company may explore strategic transactions, including joint ventures and acquisitions, which may require additional funding [398]. - The company adopted fresh-start accounting in 2025, significantly impacting its accounting estimates and fair value measurements [402].

Revenue Performance - Reported revenue for Q3 2025 was $209.1 million, a decrease of 10.4% year-over-year[6] - Combined pro forma revenue for Q3 2025 was $220.4 million, a decline of 18.1% year-over-year[6] - Applied Workflow Automation segment reported revenue of $189.4 million, down 14.0% year-over-year[4] - Technology segment revenue increased by 50.3% year-over-year to $19.7 million[4] - For the three months ended September 30, 2025, reported revenue was $209,085,000, down from $233,426,000 in the same period last year, reflecting a decrease of approximately 10.4%[39] - Pro forma revenue for the same period was $220,433,000, compared to $269,167,000 in the prior year, indicating a decline of about 18.1%[39] Profitability and Margins - Gross margin on a reported basis was 22.0%, an increase of 310 basis points year-over-year[7] - Pro forma gross margin was 21.9%, a 190 basis point increase year-over-year[7] - Pro forma adjusted EBITDA for Q3 2025 was $24.7 million, an increase of 7.4% year-over-year[6] - The net loss for the three months ended September 30, 2025, was $1,174,255,000, a significant improvement from a loss of $28,317,000 in the same period last year[41] - Pro forma adjusted EBITDA for the nine months ended September 30, 2025, was $70,928,000, slightly down from $71,711,000 in the previous year[41] Financial Position - Total assets as of September 30, 2025, amounted to $947,932,000, significantly higher than the predecessor's total assets of $390,421,000[31] - Current liabilities for the successor were $330,363,000, compared to $1,790,206,000 for the predecessor[31] - The total stockholder's equity for the successor was $130,503,000, contrasting with a deficit of $1,456,788,000 for the predecessor[31] - Cash and cash equivalents increased to $34,534,000 from $11,635,000 in the predecessor[31] - The ending cash balance as of September 30, 2025, was $64,239,000, an increase from $43,895,000 at the beginning of the period[37] Expenses and Cash Flow - Selling, general, and administrative expenses for the successor were $17,980,000, compared to $10,966,000 for the predecessor[34] - The company incurred interest expenses of $9,709,000 during the successor period, compared to $4,551,000 in the predecessor[34] - The company incurred interest expenses of $15,051,000 for the three months ended September 30, 2025, compared to $28,233,000 in the same period last year[41] - Cash provided by operating activities for the period was $13,866,000, a recovery from a cash used of $159,942,000 in the prior period[37] - The company reported a net cash used in investing activities of $3,266,000 for the three months ended September 30, 2025, compared to $2,690,000 in the previous year[37] Acquisition and Strategic Focus - The acquisition of Exela BPA was finalized on July 29, 2025, with an equity valuation of $585.7 million[6] - The company is focusing on growth through client outreach and investment in new talent[3] - XBP Global operates in 20 countries with approximately 11,000 employees and partners with over 2,500 clients[26] Impairment and Challenges - The impairment of goodwill for the successor was recorded at $295,800,000, indicating significant challenges in asset valuation[34] - The company reported an impairment of goodwill amounting to $295,800,000 during the three months ended September 30, 2025[41]

Financial Performance - The Company reported a net loss from continuing operations of $3,446,000 for the three months ended June 30, 2025, compared to a loss of $3,552,000 for the same period in 2024[201]. - Adjusted EBITDA from continuing operations was $3,280,000 for the three months ended June 30, 2025, an increase from $1,198,000 in the same period of 2024[201]. - For the three months ended June 30, 2025, the company's net revenue increased by $6.0 million, or 17.9%, to $39.6 million compared to $33.6 million for the same period in 2024[213]. - The Bills & Payments segment generated $28.8 million in revenue, a 15.9% increase from $24.8 million in the prior year, primarily due to newly won business[214]. - The Technology segment's revenue rose by $2.0 million, or 23.2%, to $10.9 million, driven by higher project activity[215]. - For the six months ended June 30, 2025, net revenue increased by $5.6 million, or 7.8%, to $77.3 million compared to $71.7 million for the same period in 2024[232]. - The Bills & Payments segment generated $55.1 million in revenue, a $3.6 million increase or 7.1%, while the Technology segment revenue rose by $1.9 million or 9.5% to $22.2 million[234][235]. - Total cost of revenue increased by $0.8 million, or 2.9%, to $27.8 million, while on a constant currency basis, it decreased by $0.8 million, or 2.9%[217]. - Total cost of revenue decreased by $1.0 million, or 1.8%, to $54.1 million for the six months ended June 30, 2025, with a notable decrease in the Bills & Payments segment costs by $2.1 million, or 4.5%[236][237]. - Selling, general and administrative expenses rose by $4.4 million, or 73.5%, to $10.4 million, attributed to bonus provisions and legal expenses related to acquisitions[221]. - Selling, general and administrative expenses increased by $8.4 million, or 64.7%, to $21.4 million, rising as a percentage of revenue to 27.6% from 18.1%[240]. - Interest expense was $2.0 million for the three months ended June 30, 2025, up from $1.5 million in the prior year, due to higher borrowing costs[224]. - Interest expense increased to $3.7 million for the six months ended June 30, 2025, compared to $2.9 million in the same period in 2024, due to higher borrowing costs[243]. - Foreign exchange gains were $0.3 million for the three months ended June 30, 2025, compared to losses of $0.6 million in the same period of 2024[227]. - The cost of revenue as a percentage of revenue decreased to 70.1% for the three months ended June 30, 2025, from 80.3% in the same period of 2024[220]. Operational Highlights - The Company serves over 2,000 clients across multiple industries and geographies, focusing on digital transformation and improving market-wide liquidity[179]. - The primary source of revenue is from transactions processed, particularly in the Bills & Payments segment, which includes automation of accounts payable and receivable processes[182]. - The Company had approximately 1,500 employees as of June 30, 2025, with operations in 16 countries[183]. - The Company has two reportable segments: Bills & Payments and Technology, which align products and services with client industries[191]. - The Company has rolled out a suite of Work From Anywhere applications to support remote work, a response to the COVID-19 pandemic[182]. Strategic Developments - The acquisition of BPA was completed on July 29, 2025, for a consideration of $1.00, following BPA's emergence from Chapter 11 bankruptcy[185][189]. - The Company approved a restructuring plan in Q4 2023 to realign its business and strategic priorities, which includes rightsizing its workforce in certain regions[275]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional funds[276]. Cash Flow and Debt Management - Net cash used in operating activities improved to $4.0 million for the six months ended June 30, 2025, from $5.5 million in the prior year, reflecting better cash inflows[255]. - The company expects to spend approximately $2.0 to $3.0 million on capital expenditures and capitalizable contracts over the next twelve months[250]. - Total debt increased by $3.4 million as of June 30, 2025, primarily due to foreign currency fluctuations[250]. - Cash and cash equivalents totaled $6.1 million as of June 30, 2025, down from $12.1 million at the end of 2024[249]. - As of June 30, 2025, the Company's outstanding factored accounts receivable amounted to approximately $7.5 million, with a loss on sale of accounts receivables totaling approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively[261]. - In June 2024, the Company entered into a £15.0 million and €10.5 million Secured Credit Facility, which includes a £3.0 million Term Loan A and a €10.5 million Term Loan B, maturing on June 26, 2028, and June 26, 2027, respectively[262]. - The Company incurred $1.5 million in debt issuance costs related to the 2024 Facilities Agreement[264]. - As of June 30, 2025, the outstanding balance of the Term Loan A Facility, Term Loan B Facility, and Revolving Credit Facility was approximately $3.5 million, $10.5 million, and $16.7 million, respectively[269]. - The 2024 Facilities Agreement requires maintaining a consolidated total leverage ratio of not greater than 2.50 to 1.00, with step-downs to 2.25 to 1.00 starting January 1, 2025, and 2.00 to 1.00 starting January 1, 2026[265]. - The Company was in compliance with all affirmative and negative covenants under the 2024 Facilities Agreement as of June 30, 2025[273]. - The Company believes it will remain in compliance with all covenants for the next 12 months based on expected future performance[274].

Financial Performance - Revenue for Q2 2025 was $39.6 million, representing a 17.8% increase year-over-year and a 5.2% increase sequentially[6] - Operating loss for Q2 2025 was $1.6 million, compared to an operating loss of $1.4 million a year ago[7] - Net loss from continuing operations was $3.4 million, slightly improved from a net loss of $3.6 million a year ago[7] - Revenue for the three months ended June 30, 2025, was $39,431 million, a 17.9% increase from $33,534 million in the same period of 2024[21] - Net loss for the six months ended June 30, 2025, was $11,239 million, compared to a net loss of $6,931 million for the same period in 2024[23] - The company reported a basic and diluted loss per share of $0.34 for the six months ended June 30, 2025, compared to $0.23 in 2024[21] Profitability Metrics - Gross margin improved to 29.8%, a 1,020 basis points increase year-over-year, though it decreased by 30 basis points sequentially[6] - Adjusted EBITDA reached $3.3 million, an increase of 173.8% year-over-year, with an adjusted EBITDA margin of 8.3%, up 470 basis points year-over-year[7] - Adjusted EBITDA from continuing operations for the six months ended June 30, 2025, was $6,974 million, up from $4,142 million in 2024[25] Debt and Equity - The acquisition of BPA was completed, resulting in the elimination of $1.1 billion of BPA's secured debt and the issuance of approximately 81.8 million new shares[4] Company Growth and Clientele - XBP Global's annual revenue is projected to approach $900 million, with a workforce of approximately 11,000 employees across 20 countries[4] - The company now serves over 2,500 clients, including many from the Fortune 100[4] Asset and Cash Flow - Total assets increased to $105.2 million as of June 30, 2025, compared to $88.0 million as of December 31, 2024[19] - Cash used in operating activities for the six months ended June 30, 2025, was $4,008 million, an improvement from $5,540 million in 2024[23] - Net cash used in investing activities for the six months ended June 30, 2025, was $2,136 million, compared to $726 million in 2024[23] - Cash and equivalents at the end of the period for June 30, 2025, were $6,205 million, down from $15,562 million in 2024[23] Expenses - The company incurred $10,407 million in selling, general, and administrative expenses for the three months ended June 30, 2025, compared to $5,998 million in 2024[21] Foreign Exchange Impact - Revenues at constant currency for the three months ended June 30, 2025, were $37,388 million, reflecting a foreign currency exchange impact of $(2,227) million[24] - The company reported a foreign exchange loss of $(311) million for the three months ended June 30, 2025[21] Governance - The company has appointed four new independent board members to enhance governance and accountability[4]

Revenue Performance - Revenue for Q1 2025 was $37.7 million, a decrease of 1.2% year-over-year and an increase of 5.7% sequentially[5] - Revenue for Q1 2025 was $37,531 million, a decrease of 1.4% from $38,047 million in Q1 2024[22] - Foreign currency exchange impact on revenue for Q1 2025 was $766 million, leading to constant currency revenue of $38,438 million[25] Profitability Metrics - Gross margin improved to 30.1%, reflecting a 380 basis points increase year-over-year and a 190 basis points increase sequentially[5] - Adjusted EBITDA for Q1 2025 was $3.7 million, representing a 25.6% increase year-over-year[5] - Adjusted EBITDA from continuing operations for Q1 2025 was $3,694 million, up 25.5% from $2,942 million in Q1 2024[25] - The company reported an operating loss of $1.8 million, compared to an operating profit of $1.3 million in the same quarter last year[6] - Operating loss for Q1 2025 was $(1,787) million compared to an operating profit of $1,331 million in Q1 2024[22] - Net loss for Q1 2025 was $(4,350) million, an increase of 97.3% from $(2,208) million in Q1 2024[22] - The company’s net loss from continuing operations was $3.9 million, but adjusted for non-cash stock-based compensation, the net loss was $0 million[6] Cash and Liquidity - Cash and cash equivalents totaled $9.7 million as of March 31, 2025, down from $12.1 million at the end of 2024[6] - Cash and equivalents at the end of Q1 2025 were $9,726 million, compared to $3,501 million at the end of Q1 2024[24] - Cash used in operating activities for Q1 2025 was $(929) million, a significant improvement from $(3,610) million in Q1 2024[24] - Net cash used in investing activities for Q1 2025 was $(1,091) million, compared to $(385) million in Q1 2024[24] Asset and Liability Overview - Total assets increased to $98.977 million as of March 31, 2025, compared to $88.045 million at the end of 2024[20] - Total liabilities rose to $119.365 million as of March 31, 2025, up from $109.391 million at the end of 2024[20] Segment Performance - The technology segment revenue was $11.4 million, a decrease of 1.0% year-over-year but an increase of 16% sequentially[6] Acquisition Potential - A pending acquisition of Exela Technologies BPA, LLC could potentially increase XBP Europe's revenue to approximately $1 billion from $143 million on a pro forma basis for the year ending December 31, 2024[4] Depreciation and Amortization - Depreciation and amortization for Q1 2025 totaled $627 million, down from $808 million in Q1 2024[22] Stock-Based Compensation - Stock-based compensation expense for Q1 2025 was $3,587 million, with no comparable expense in Q1 2024[24]

Company Overview - The Company serves over 2,000 clients across multiple industries and geographies, focusing on digital transformation and improving market-wide liquidity [154]. - As of March 31, 2025, the Company had approximately 1,500 employees, with 145 part-time employees, across 16 countries [159]. Financial Performance - For the three months ended March 31, 2025, the net loss from continuing operations was $3,855, compared to a net loss of $858 for the same period in 2024 [175]. - Adjusted EBITDA from continuing operations for the three months ended March 31, 2025, was $3,694, up from $2,942 in 2024 [175]. - For the three months ended March 31, 2025, net revenue decreased by $0.4 million, or 1.2%, to $37.7 million from $38.1 million for the same period in 2024 [188]. - The Bills & Payments segment generated $26.3 million in revenue, a decline of $0.3 million or 1.2%, primarily due to foreign currency impacts, while on a constant currency basis, revenue increased by $0.3 million or 1.2% [189]. - The Technology segment's revenue decreased by $0.1 million or 1.0%, to $11.4 million, largely due to lower license sales, with a constant currency increase of 0.1% [190]. - Total cost of revenue decreased by $1.8 million, or 6.3%, to $26.3 million, with a constant currency decrease of $1.1 million or 3.9% [191]. - Selling, general and administrative expenses increased by $4.0 million, or 57.2%, to $11.0 million, primarily due to $3.8 million in stock-based compensation [195]. - Related party expenses rose to $1.6 million for the three months ended March 31, 2025, compared to $0.9 million in the same period of 2024, driven by the expansion of the Center of Excellence [197]. - Interest expense increased to $1.7 million for the three months ended March 31, 2025, compared to $1.4 million in 2024, due to higher borrowing costs [200]. - Net cash used in operating activities improved to $0.9 million for the three months ended March 31, 2025, from $3.6 million in 2024, a decrease of $2.7 million [212]. - Net cash used in financing activities was $0.4 million for the three months ended March 31, 2025, a decrease of $1.1 million compared to net cash provided of $0.7 million for the same period in 2024 [217]. Revenue Sources - The primary source of revenue comes from transactions processed by its products, particularly in the Bills & Payments segment, which includes digital transformation revenue [158]. - The Technology business unit focuses on sales of recurring and perpetual software licenses, contributing to the overall revenue [167]. Debt and Financing - As of March 31, 2025, total debt increased by $0.8 million primarily due to borrowings under the 2024 Senior Credit Facilities [207]. - As of March 31, 2025, the outstanding balance of the Term Loan A Facility, Term Loan B Facility, and Revolving Credit Facility was approximately $3.3 million, $9.7 million, and $15.4 million, respectively [227]. - The Company incurred $1.5 million in debt issuance costs related to the 2024 Facilities Agreement [222]. - The Company is in compliance with all affirmative and negative covenants under the 2024 Facilities Agreement as of March 31, 2025 [230]. - The 2024 Facilities Agreement includes a consolidated total leverage ratio requirement of not greater than 2.50 to 1.00, stepping down to 2.25 to 1.00 starting January 1, 2025, and to 2.00 to 1.00 starting January 1, 2026 [223]. - The 2024 Term Loan A Facility will be repaid in fifteen equal quarterly installments of £150 thousand starting September 30, 2024 [229]. Strategic Initiatives - The Company is in the process of negotiating a non-binding letter of intent to acquire Exela Technologies BPA, LLC, a leading provider of business process automation solutions [161]. - The Company is undergoing a pending divestiture of certain on-demand printing operations, which have been classified as discontinued operations [164]. - The Company approved a restructuring plan in Q4 2023 to realign its business, with costs recognized as incurred [234]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional financing [235]. Foreign Exchange and Other Impacts - The Company has experienced foreign exchange losses, netting $71 in losses for the three months ended March 31, 2025 [175]. - As of March 31, 2025, the outstanding factored accounts receivable amounted to approximately $10.1 million under the Amended Factoring Agreement, with a loss on sale of accounts receivables totaling approximately $0.2 million for the three months ended March 31, 2025 [220]. Compliance and Growth Status - The Company is classified as an "emerging growth company" and has elected to take advantage of the extended transition period for new financial accounting standards [238].

Financial Performance - Total revenue for 2024 was $142.8 million, a decline of 8.0% year-over-year, primarily due to project completions and lower volumes [4]. - Gross margin for 2024 was 26.8%, reflecting a 110 basis points increase year-over-year [4]. - Operating profit for 2024 was $3.5 million, an increase of $2.4 million compared to 2023 [5]. - Adjusted EBITDA from continuing operations was $13.4 million, a decrease of 15.1% compared to 2023, with an adjusted EBITDA margin of 9.4% [5]. - The company reported a net loss from continuing operations of $6.5 million, compared to a net loss of $5.6 million in 2023 [5]. - Net loss for 2024 was $12,366,000, compared to a net loss of $11,047,000 in 2023, indicating a worsening financial position [16]. - Adjusted EBITDA from continuing operations for 2024 was $13,390,000, down from $15,774,000 in 2023 [20]. Revenue Breakdown - Bills & Payments segment revenue was $101.9 million, a decline of 7.8% year-over-year, while Technology segment revenue was $40.9 million, a decrease of 8.5% year-over-year [5]. - Total revenue for 2024 was $142,408,000, a decrease of 8.0% from $154,943,000 in 2023 [16]. - The company reported a foreign currency exchange impact of $1,055,000 on revenues, affecting the overall revenue performance [19]. Liquidity and Cash Flow - Cash and cash equivalents totaled $12.1 million as of December 31, 2024, indicating adequate liquidity [6]. - Cash and cash equivalents increased to $12,099,000 in 2024 from $6,537,000 in 2023, showing improved liquidity [15]. - Cash flows used in operating activities were $5,227,000 in 2024, compared to $1,535,000 in 2023, indicating increased cash outflow [18]. Assets and Liabilities - Total assets decreased to $88,045,000 in 2024 from $102,739,000 in 2023, a decline of 14.3% [15]. - Total liabilities decreased to $109,391,000 in 2024 from $115,307,000 in 2023, a reduction of 5.5% [15]. Strategic Initiatives - The company signed a non-binding letter of intent to acquire Exela Technologies BPA, LLC, which could potentially expand revenue to approximately $1 billion annually [4][7]. - Approximately $25 million of annual contract value (ACV) is in active ramp, expected to contribute to margin improvement in the second half of 2024 [4]. - The company is optimistic about its organic growth trajectory in 2025 and is working towards the acquisition of Exela Technologies BPA, LLC [2]. Employee Compensation - The company incurred $1,611,000 in stock-based compensation expenses in 2024, reflecting ongoing investment in employee incentives [18].

Risks and Uncertainties - The company is subject to numerous risks and uncertainties, including the uncertainty of achieving continued profitability [17] - The company may need to raise debt or equity financing, which may not be available on favorable terms [18] - The company faces significant competition, including from clients who may choose to perform business processes in-house [22] - Cybersecurity issues could result in risks to the company's systems and services [32] - The invasion of Ukraine by Russia and the resulting sanctions have caused significant economic disruption [30] Financial Performance and Debt - The company's revenues are highly dependent on the banking and finance industries, and any decrease in demand could reduce revenues [24] - As of December 31, 2024, the company had $28.9 million of debt outstanding with a weighted average interest rate of 6.29% [408] - As of December 31, 2023, the company had $16.6 million of debt outstanding with a weighted average interest rate of 8.25% [409] - A 1.0% increase or decrease in the assumed weighted average interest rate would not have a material impact on the results of operations for both years [408][409] Operational Challenges - The company relies on third-party services, which could cause errors or failures that adversely affect its business [26] - The company incurs significant increased expenses and administrative burdens as a result of being a public company [34] - The company may not be able to comply with the continued listing standards of Nasdaq [35] Market and Economic Conditions - The company is exposed to foreign currency risks from normal business operations, including transaction gains and losses associated with intercompany loans and transactions in currencies other than the functional currency [410] - The company does not use derivatives for trading purposes or speculative activity, focusing instead on managing market risks from interest rates and foreign currency exchange rates [411] - The company does not believe inflation has materially affected its business, but significant inflationary pressures could harm its financial condition if costs cannot be offset [412] Dividend Policy - The company does not expect to declare any dividends in the foreseeable future [33]

Financial Performance - Total revenue for Q3 2024 was $35.4 million, a decrease of 5.6% year-over-year and an increase of 5.5% sequentially[5] - Total revenue for Q3 2024 was $35,330, a decrease of 5.9% from $37,429 in Q3 2023[19] - Net loss for the quarter was $2.8 million, a slight improvement from a net loss of $2.9 million in Q3 2023[6] - Net loss for Q3 2024 was $2,769, compared to a net loss of $2,887 in Q3 2023, reflecting a slight improvement[19] - Operating profit reached $2.5 million, up from $0.3 million in Q3 2023, driven by higher gross margins and improved SG&A[6] - Operating profit for Q3 2024 increased to $2,509 from $348 in Q3 2023, indicating a significant operational improvement[19] - Adjusted EBITDA from continuing operations was $4.8 million, an increase of $2.6 million or 116% compared to $2.2 million in Q3 2023[6] - Adjusted EBITDA from continuing operations for Q3 2024 was $4,846, up from $2,244 in Q3 2023, showing strong operational performance[22] Segment Performance - Bills & Payments segment revenue was $24.6 million, a decline of 3.1% year-over-year, while Technology segment revenue was $10.8 million, down 10.8% year-over-year[6] Liquidity and Capital Structure - The company has adequate liquidity with cash and cash equivalents totaling $7.8 million as of September 30, 2024[6] - Cash and cash equivalents increased to $7,770 as of September 30, 2024, from $6,537 at the end of 2023[17] - Total liabilities rose to $120,408 as of September 30, 2024, compared to $115,307 at the end of 2023[17] - The company reported a net cash used in operating activities of $11,154 for the nine months ended September 30, 2024, compared to a net cash provided of $1,743 in the same period of 2023[21] - The company incurred $1,820 in interest expense for Q3 2024, compared to $1,246 in Q3 2023, indicating increased borrowing costs[19] Strategic Initiatives - The company announced plans to divest its on-demand printing operation, which has been classified as a discontinued operation[4] - The company is optimistic about future growth opportunities, particularly after being selected for the UK government's G-cloud 14 framework[3] Accounting and Reporting - Goodwill increased to $23,281 as of September 30, 2024, from $22,823 at the end of 2023, reflecting potential acquisitions or asset revaluations[17] - The company reported adjusted EBITDA as a key performance indicator, which is also utilized by lenders for debt covenant compliance[26] - Non-GAAP financial measures are used by management to assess operational performance and may influence performance-based compensation[26] - The company emphasizes the importance of considering non-GAAP measures alongside GAAP results for a comprehensive performance assessment[27] - Restructuring costs associated with employee severance were noted as an adjustment in financial reporting[27] - The company incurred transaction costs related to a business combination, impacting financial results[25] - Capital expenditures were 2.0% of revenue, up from 0.7% in Q3 2023, reflecting higher investments for growth[6]

Financial Performance - The Company reported a net loss from continuing operations of $1,226,000 for the three months ended September 30, 2024, compared to a net loss of $1,219,000 for the same period in 2023[199]. - EBITDA from continuing operations was $3,085,000 for the three months ended September 30, 2024, an increase from $1,823,000 in the same period of 2023[199]. - Adjusted EBITDA from continuing operations reached $4,846,000 for the three months ended September 30, 2024, compared to $2,244,000 for the same period in 2023[199]. - For the three months ended September 30, 2024, the company's net revenue decreased by $2.1 million, or 5.6%, to $35.4 million compared to $37.5 million for the same period in 2023[213]. - The net loss from continuing operations for the three months ended September 30, 2024, was $1.2 million, compared to a net loss of $1.2 million for the same period in 2023[212]. - For the nine months ended September 30, 2024, net revenue decreased by $9.4 million, or 8.1%, to $107.0 million compared to $116.4 million for the same period in 2023[232]. - Bills & Payments segment net revenue was $75.9 million for the nine months ended September 30, 2024, a decline of $7.0 million or 8.4% from $82.9 million in the same period of 2023[233]. - Technology segment net revenue decreased by $2.4 million or 7.2% to $31.1 million for the nine months ended September 30, 2024, down from $33.5 million in 2023[236]. Revenue Sources - The primary source of revenue is from transactions processed in the Bills & Payments segment, which includes automation of accounts payable and receivable processes[185]. - The Bills & Payments segment contributed 69.4% of total net revenue, while the Technology segment contributed 30.6% for the three months ended September 30, 2024[214]. - The Technology segment focuses on sales of recurring and perpetual software licenses, contributing to the Company's diversified revenue streams[192]. Operational Metrics - The Company serves over 2,000 clients across multiple industries and geographies, contributing to its revenue growth[181]. - As of September 30, 2024, the Company employed approximately 1,500 employees across 16 countries, enhancing its operational capabilities[186]. - The cost of revenue decreased by $4.4 million, or 15.6%, to $23.8 million for the three months ended September 30, 2024, compared to $28.2 million for the same period in 2023[216]. - Total cost of revenue decreased by $6.8 million or 7.9% for the nine months ended September 30, 2024, compared to the same period in 2023[237]. - Selling, general and administrative expenses slightly decreased by $28 thousand, or 0.4%, to $6.8 million for the three months ended September 30, 2024[220]. - Selling, General and Administrative (SG&A) expenses decreased by $1.6 million or 7.8% to $19.8 million for the nine months ended September 30, 2024[241]. Debt and Financing - As of September 30, 2024, total debt increased by $14.8 million primarily due to borrowings under the 2024 Senior Credit Facilities[250]. - Interest expense increased to $1.8 million for the three months ended September 30, 2024, compared to $1.2 million for the same period in 2023, primarily due to higher pension interest costs[225]. - Interest expense increased to $4.7 million for the nine months ended September 30, 2024, compared to $3.6 million in the same period of 2023[244]. - The Company incurred $1.6 million in debt issuance costs related to the 2024 Facilities Agreement[280]. - The Company has drawn £12.0 million under the 2024 Revolving Credit Facility, with an outstanding balance of $15.8 million as of September 30, 2024[288]. Strategic Initiatives - The Company anticipates future growth opportunities driven by digital transformation initiatives and expanding its service offerings[181]. - The Business Combination completed on November 30, 2023, has positioned the Company for enhanced market presence and operational efficiency[187]. - The Company approved a restructuring plan in Q4 2023 to realign its business and strategic priorities, which includes rightsizing its workforce[291]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional financing[294]. Market and Risk Assessment - The Company maintained a full valuation allowance on net deferred tax assets for its U.S. federal taxes, indicating uncertainty regarding the utilization of deferred assets[211]. - The Company reported foreign exchange losses of $0.7 million for the three months ended September 30, 2024, compared to foreign exchange gains of $0.5 million for the same period in 2023[227]. - Foreign exchange losses were $2.0 million for the nine months ended September 30, 2024, compared to $0.4 million in the same period in 2023[246]. - There have been no material changes to the Company's market risk during the nine months ended September 30, 2024[298]. - The Company believes that the current assumptions, judgments, and estimates used in its financial statements are appropriate, although actual results may differ under different conditions[295]. Compliance and Regulations - The Company is classified as an "emerging growth company" and has opted for the extended transition period for new or revised financial accounting standards[297]. - The UK Subsidiary was in compliance with all affirmative and negative covenants under the 2019 Credit Agreement as of December 31, 2023[275]. - The 2024 Facilities Agreement requires maintaining a consolidated total leverage ratio of not greater than 2.50 to 1.00, with step-downs to 2.25 to 1.00 starting January 1, 2025[281].