Part I – Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements as of September 30, 2021, reflect significant asset and equity growth post-IPO, with increased revenue and positive operating cash flow despite continued net losses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $443,313 | $186,694 | | Total current assets | $647,318 | $345,331 | | Total assets | $664,869 | $362,989 | | **Liabilities & Equity** | | | | Total liabilities | $177,186 | $186,611 | | Total stockholders' equity (deficit) | $487,683 | $(211,329) | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $121,244 | $71,790 | $323,350 | $176,939 | | Loss from operations | $(12,667) | $(1,753) | $(23,183) | $(20,341) | | Net loss | $(12,962) | $(2,429) | $(22,180) | $(23,559) | | Net loss per share (basic and diluted) | $(0.41) | $(0.11) | $(0.85) | $(1.11) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $19,425 | $(71,176) | | Net cash used in investing activities | $(3,288) | $(3,416) | | Net cash provided by financing activities | $239,665 | $41,850 | - In September 2021, the company completed its IPO, issuing **7,000,000 shares** of common stock at **$43.00 per share** and receiving net proceeds of **$305.2 million** for the IPO and a concurrent private placement[32](index=32&type=chunk)[81](index=81&type=chunk) - Concurrently with the IPO, all **127,410,631 shares** of redeemable convertible preferred stock were converted into common stock[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong revenue growth to increased active customers and send volume, despite rising operating expenses and a widened net loss, with liquidity bolstered by IPO proceeds and a new credit facility Key Business Metrics | Metric | Q3 2021 | Q3 2020 | Growth | Nine Months 2021 | Nine Months 2020 | Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Active Customers (in thousands) | 2,561 | 1,692 | 51% | N/A | N/A | N/A | | Send Volume (in millions) | $5,239 | $3,245 | 61% | $14,488 | $8,429 | 72% | Revenue Performance (in thousands) | Period | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $121,244 | $71,790 | $49,454 | 69% | | Nine Months Ended Sep 30 | $323,350 | $176,939 | $146,411 | 83% | - General and administrative expenses increased by **220%** for Q3 2021, primarily due to a **$6.9 million** common stock donation, increased personnel costs, and **$2.8 million** in IPO-related professional fees[180](index=180&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(12,962) | $(2,429) | $(22,180) | $(23,559) | | **Adjusted EBITDA** | **$325** | **$578** | **$(3,395)** | **$(13,630)** | - The company's liquidity was significantly strengthened by **$305.2 million** in net proceeds from its IPO and private placement, and a new **$250.0 million** revolving credit facility established in September 2021[123](index=123&type=chunk)[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company is primarily exposed to credit risk from payment processors and foreign currency exchange rate risk on cross-border payments, without using derivatives for hedging - The company faces credit risk from pay-in payment processors and disbursement partners, mitigated by engaging reputable partners and performing credit reviews[221](index=221&type=chunk) - Principal foreign exchange risk arises from rate fluctuations on cross-border payments between initiation and disbursement, especially for the Indian rupee, Mexican peso, and Philippine peso[222](index=222&type=chunk) - A hypothetical **10%** strengthening or weakening of the U.S. dollar would change the fair value of assets and liabilities by approximately **$3.6 million** as of September 30, 2021[222](index=222&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of September 30, 2021, due to material weaknesses in IT general controls and segregation of duties, with remediation underway - Management concluded that disclosure controls and procedures were not effective as of September 30, 2021[226](index=226&type=chunk) - Two material weaknesses were identified in internal control over financial reporting[227](index=227&type=chunk): - Ineffective design and maintenance of IT general controls for financial systems, particularly program change management and user access controls[228](index=228&type=chunk) - Ineffective controls over segregation of duties for journal entries, allowing certain personnel to both prepare and post entries without independent review[229](index=229&type=chunk) - Remediation efforts are underway, including enhanced risk assessment procedures, comprehensive access control protocols, and additional controls over journal entries[232](index=232&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management believes any resulting liability would not materially adversely affect its business or financial condition - Management believes any liability from current legal proceedings would not materially adversely affect the company's business or financial condition[237](index=237&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across business, financial, legal, compliance, technology, and security domains, including customer retention, third-party reliance, internal control weaknesses, and regulatory complexities - **Business Risks:** Success depends on customer retention and growth, managing third-party payment and disbursement partnerships, and effective competition in a crowded market[239](index=239&type=chunk)[240](index=240&type=chunk)[244](index=244&type=chunk) - **Financial Risks:** Identified material weaknesses in internal control over financial reporting related to IT controls and segregation of duties, alongside a history of operating losses, may hinder sustained profitability[351](index=351&type=chunk)[352](index=352&type=chunk)[260](index=260&type=chunk) - **Legal & Compliance Risks:** Extensive regulation, including money transmission licensing, AML, and sanctions laws, poses significant compliance challenges with potential for substantial penalties[248](index=248&type=chunk)[294](index=294&type=chunk) - **Technology & Security Risks:** Vulnerability to cyberattacks, data security breaches, and system interruptions, coupled with concentration risk from reliance on third-party cloud infrastructure (AWS)[264](index=264&type=chunk)[271](index=271&type=chunk)[335](index=335&type=chunk) - **Geographic Concentration Risk:** Approximately **70%** of revenue in the first nine months of 2021 is from remittances to India, the Philippines, and Mexico, exposing the business to region-specific risks[350](index=350&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the company issued unregistered securities via stock option exercises and grants, and sold shares in a private placement, with net proceeds from the IPO and private placement used as described in the prospectus - From July 1 to September 30, 2021, the company issued **1,951,856 shares** of common stock upon stock option exercise and granted options to purchase **1,040,500 shares**[430](index=430&type=chunk)[431](index=431&type=chunk) - On September 27, 2021, the company sold **581,395 shares** of common stock at **$43.00 per share** in a private placement, raising gross proceeds of approximately **$25.0 million**[432](index=432&type=chunk) - The company received net proceeds of **$305.2 million** from its IPO and concurrent private placement after deducting underwriting discounts and fees of **$20.8 million**[436](index=436&type=chunk)