Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38531 UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Exact name of Registrant as specified in its Charter) Delaware 98-1496050 (State or other jurisdiction of incorporation or org ...

REPAY® Realtime Electronic Payments Investor Presentation November 2020 Disclaimer 1 On July 11, 2019 (the "Closing Date"), Thunder Bridge Acquisition Ltd. ("Thunder Bridge") and Hawk Parent Holdings LLC ("Hawk Parent") completed their previously announced business combination under which Thunder Bridge acquired Hawk Parent, upon which Thunder Bridge changed its name to Repay Holdings Corporation ("REPAY" or the "Company"). Unless otherwise indicated, information provided in this presentation (a) that relat ...

REPAY Realtime Electronic Payments REPAY Q3 20 Earnings Supplement November 2020 Disclaimer 1 On July 11, 2019 (the "Closing Date"), Thunder Bridge Acquisition Ltd. ("Thunder Bridge") and Hawk Parent Holdings LLC ("Hawk Parent") completed their previously announced business combination under which Thunder Bridge acquired Hawk Parent, upon which Thunder Bridge changed its name to Repay Holdings Corporation ("REPAY" or the "Company"). Unless otherwise indicated, information provided in this presentation that ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38531 Repay Holdings Corporation (Exact name of Registrant as specified in its Charter) Delaware 98-1496050 (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38531 Repay Holdings Corporation (Exact name of Registrant as specified in its Charter) Delaware 98-1496050 (State or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38531 Repay Holdings Corporation (Exact name of Registrant as specified in its Charter) Delaware 98-1496050 (State or other juri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (State or other jurisdiction of incorporation or organization) 3 West Paces Ferry Road, Suite 200 Atlanta, GA 30305 (Address of principal executive offices) (Zip Code) (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD ...

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) Repay Holdings Corporation filed its Quarterly Report on Form 10-Q for the period ended September 30, 2019, as a Delaware-incorporated non-accelerated filer and emerging growth company - Repay Holdings Corporation filed its Quarterly Report on Form 10-Q for the period ended September 30, 2019, as a Delaware-incorporated non-accelerated filer and an emerging growth company[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) Outstanding Shares as of November 8, 2019 | Class of Stock | Shares Outstanding | | :--------------- | :----------------- | | Class A Common Stock | 39,430,397 | | Class V Common Stock | 100 | [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements in the report are subject to risks and uncertainties, potentially causing actual results to differ - This report contains forward-looking statements regarding expected benefits from the Business Combination and acquisitions, financial performance, business strategy, and future operations, which are subject to risks and uncertainties detailed in 'Part II, Item 1A Risk Factors' and may cause actual results to differ materially[6](index=6&type=chunk) [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's discussion and analysis for the reported period [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Repay Holdings Corporation, including the balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes explaining the company's nature of operations, accounting policies, business combinations, and other financial details for the reported periods [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheets (Unaudited) | (in $) | September 30, 2019 (Unaudited) | December 31, 2018 (Predecessor) | | :-------------------------------- | :----------------------------- | :------------------------------ | | **Assets** | | | | Cash and cash equivalents | 45,493,526 | 13,285,357 | | Accounts receivable | 12,636,396 | 5,979,247 | | Prepaid expenses and other | 4,075,814 | 817,212 | | Total current assets | 62,205,736 | 20,081,816 | | Property, plant and equipment, net | 1,485,207 | 1,247,149 | | Restricted cash | 11,555,559 | 9,976,701 | | Customer relationships, net | 231,461,182 | 62,528,880 | | Software, net | 65,523,119 | 5,170,748 | | Other intangible assets, net | 26,659,947 | 523,133 | | Goodwill | 369,927,511 | 119,529,202 | | Total noncurrent assets | 706,612,525 | 198,975,813 | | **Total assets** | **768,818,261** | **219,057,629** | | **Liabilities** | | | | Accounts payable | 8,742,117 | 2,909,378 | | Accrued expenses | 18,638,336 | 12,837,826 | | Current maturities of long-term debt | 5,250,000 | 4,900,000 | | Current tax receivable agreement | 2,231,575 | - | | Total current liabilities | 34,862,028 | 20,647,204 | | Long-term debt, net | 198,908,296 | 85,815,204 | | Line of credit | - | 3,500,000 | | Tax receivable agreement | 64,106,048 | - | | Deferred tax liability | 2,858,139 | - | | Other liabilities | 16,863 | 16,864 | | Total noncurrent liabilities | 265,889,346 | 89,332,068 | | **Total liabilities** | **300,751,374** | **109,979,272** | | **Equity** | | | | Total stockholders' equity | 254,208,586 | | | Equity attributable to noncontrolling interests | 213,858,301 | | | Members' Equity | | 109,078,357 | | **Total liabilities and equity** | **768,818,261** | **219,057,629** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income or loss over specific reporting periods Consolidated Statements of Operations (Unaudited) | (in $) | July 11, 2019 to Sep 30, 2019 (Successor) | July 1, 2019 to July 10, 2019 | Jan 1, 2019 to July 10, 2019 | Three Months Ended Sep 30, 2018 (Predecessor) | Nine Months Ended Sep 30, 2018 | | :----------------------------------- | :---------------------------------------- | :---------------------------- | :--------------------------- | :-------------------------------------------- | :----------------------------- | | **Revenue** | | | | | | | Processing and service fees | 24,609,417 | 2,431,239 | 49,401,082 | 20,316,928 | 60,785,117 | | Interchange and network fees | 12,546,350 | 1,475,928 | 29,988,744 | 11,974,980 | 35,369,642 | | **Total Revenue** | **37,155,767** | **3,907,167** | **79,389,826** | **32,291,908** | **96,154,759** | | **Operating Expenses** | | | | | | | Interchange and network fees | 12,546,350 | 1,475,928 | 29,988,744 | 11,974,980 | 35,369,642 | | Other costs of services | 7,050,567 | 565,276 | 12,574,244 | 6,332,224 | 20,302,152 | | Selling general and administrative | 21,002,624 | 34,069,143 | 51,201,322 | 6,103,913 | 21,008,801 | | Depreciation and amortization | 10,702,840 | 333,290 | 6,222,917 | 2,665,925 | 7,580,345 | | Change in fair value of contingent consideration | - | - | - | - | (1,000,000) | | **Total operating expenses** | **51,302,381** | **36,443,637** | **99,987,227** | **27,077,042** | **83,260,940** | | **Income (loss) from operations** | **(14,146,614)** | **(32,536,470)** | **(20,597,401)** | **5,214,866** | **12,893,819** | | **Other income (expense)** | | | | | | | Interest expense | (2,685,998) | (226,539) | (3,145,167) | (1,487,551) | (4,500,929) | | Change in fair value of tax receivable liability | (450,922) | - | - | - | - | | Other income (expense) | (1,315,932) | - | 38 | 23 | (1,127) | | **Total other income (expenses)** | **(4,452,852)** | **(226,539)** | **(3,145,129)** | **(1,487,528)** | **(4,502,056)** | | **Income (loss) before income tax expense** | **(18,599,466)** | **(32,763,009)** | **(23,742,530)** | **3,727,338** | **8,391,763** | | Income tax benefit (expense) | 2,719,402 | - | - | - | - | | **Net income (loss)** | **(15,880,064)** | **(32,763,009)** | **(23,742,530)** | **3,727,338** | **8,391,763** | | Less: Net income (loss) attributable to noncontrolling interests | (7,399,303) | | | | | | **Net income (loss) attributable to the Company** | **(8,480,761)** | **(32,763,009)** | **(23,742,530)** | **3,727,338** | **8,391,763** | | Earnings (loss) per Class A share: | | | | | | | Basic and diluted | (0.25) | | | | | | Weighted-average shares outstanding: | | | | | | | Basic and diluted | 34,326,127 | | | | | [Consolidated Statement of Changes in Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Outlines the changes in the company's equity accounts, including net income, contributions, and distributions Consolidated Statement of Changes in Equity (Unaudited) | (in $) | Total Equity (Predecessor) | | :----------------------- | :------------------------- | | Balance at December 31, 2017 | 104,051,883 | | Net income | 4,664,425 | | Contributions by members | - | | Stock based compensation | 431,721 | | Distribution to members | (1,360,159) | | Balance at June 30, 2018 | 107,787,870 | | Net income | 3,727,338 | | Contributions by members | - | | Stock based compensation | 198,501 | | Distribution to members | (2,383,667) | | Balance at September 30, 2018 | 109,330,042 | | Balance at December 31, 2018 | 109,078,357 | | Net income | 9,020,479 | | Contributions by members | - | | Stock based compensation | 250,783 | | Distribution to members | (6,904,991) | | Balance at June 30, 2019 | 111,444,628 | | Net loss | (32,763,009) | | Contributions by members | - | | Stock based compensation | 658,195 | | Distribution to members | - | | Balance at July 10, 2019 | 79,339,814 | | (in $) | Class A Common Stock (Shares) | Class A Common Stock (Amount) | Class V Common Stock (Shares) | Class V Common Stock (Amount) | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interests | | :----------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :------------------------- | :------------------ | :------------------------- | :----------------------- | | Balance at July 11, 2019 | 33,430,259 | 3,343 | 100 | 0 | 290,592,210 | (37,657,028) | 252,938,525 | 221,443,561 | | Release of Founder Shares | 1,482,500 | 148 | | | (148) | - | - | - | | Release of share awards vested under 2019 Plan | 575,301 | 58 | | | (58) | - | - | - | | Stock-based compensation | - | - | | | 9,750,822 | - | 9,750,822 | - | | Tax distribution from Hawk Parent | - | - | | | - | - | - | (185,957) | | Net loss | - | - | | | - | (8,480,761) | (8,480,761) | (7,399,303) | | Balance at September 30, 2019 (Successor) | 35,488,060 | 3,549 | 100 | 0 | 300,342,826 | (46,137,789) | 254,208,586 | 213,858,301 | [Consolidated Statement of Cash Flows](index=8&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities Consolidated Statement of Cash Flows (Unaudited) | (in $) | July 11, 2019 to Sep 30, 2019 (Successor) | Jan 1, 2019 to July 10, 2019 (Predecessor) | Sep 30, 2018 (Predecessor) | | :---------------------------------------- | :---------------------------------------- | :----------------------------------------- | :------------------------- | | **Cash flows from operating activities** | | | | | Net income (loss) | (15,880,064) | (23,742,530) | 8,391,763 | | Depreciation and amortization | 10,702,840 | 6,222,917 | 7,580,345 | | Stock based compensation | 9,750,822 | 908,978 | 630,222 | | Amortization of debt issuance costs | 223,761 | 215,658 | 305,552 | | Fair value change in tax receivable liability | 450,922 | - | - | | Deferred tax expense | (2,719,402) | - | - | | Change in accounts receivable | 247,912 | (4,614,620) | (1,157,087) | | Change in prepaid expenses and other | (3,089,306) | (73,533) | 1,781 | | Change in accounts payable | 2,914,452 | 1,297,035 | 233,108 | | Change in accrued expenses and other | 2,335,150 | 28,136,310 | (1,190,237) | | **Net cash provided by operating activities** | **4,937,087** | **8,350,215** | **14,795,447** | | **Cash flows from investing activities** | | | | | Purchases of property and equipment | (265,720) | (203,026) | (659,343) | | Purchases of software | (1,682,965) | (3,842,744) | (3,635,741) | | Acquisition of Hawk Parent, net of cash and restricted cash acquired | (242,599,551) | - | - | | Acquisition of TriSource, net of cash and restricted cash acquired | (58,958,915) | - | - | | **Net cash used in investing activities** | **(303,507,151)** | **(4,045,770)** | **(4,295,084)** | | **Cash flows from financing activities** | | | | | Change in line of credit | (3,500,000) | - | 3,000,000 | | Issuance of long-term debt | 210,000,000 | - | - | | Payments on long-term debt | (89,800,000) | (2,450,000) | (3,675,000) | | Private placement issuance of Class A Common Stock | 135,000,000 | - | - | | Repurchase of outstanding warrants | (38,700,000) | - | - | | Conversion of Thunder Bridge Class A ordinary shares to Class A Common Stock | 148,870,571 | - | - | | Distributions to Members | (185,957) | (6,904,991) | (3,743,826) | | Payment of loan costs | (6,065,465) | - | - | | **Net cash provided (used) by financing activities** | **355,619,149** | **(9,354,991)** | **(4,418,826)** | | **(Decrease) increase in cash, cash equivalents and restricted cash** | **57,049,085** | **(5,050,546)** | **6,081,537** | | Cash, cash equivalents and restricted cash at beginning of period | - | 23,262,058 | 13,091,172 | | **Cash, cash equivalents and restricted cash at end of period** | **57,049,085** | **18,211,512** | **19,172,709** | [Notes to the Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the consolidated financial statements [1. Nature of Operations](index=9&type=section&id=1.%20Nature%20of%20Operations) Describes Repay Holdings Corporation's business as an electronic transaction processing service provider and outlines key acquisitions - REPAY Holdings Corporation is a full-service provider of electronic transaction processing services, focusing on specific industry verticals[18](index=18&type=chunk) - On July 11, 2019, Thunder Bridge Acquisition, Ltd. completed a Business Combination with Hawk Parent Holdings LLC, resulting in Repay Holdings Corporation becoming the acquirer for accounting purposes and Hawk Parent as the accounting predecessor[19](index=19&type=chunk)[21](index=21&type=chunk) - On August 13, 2019, REPAY acquired TriSource Solutions, LLC, which provides back-end transaction processing services to independent sales organizations (ISO's)[22](index=22&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Explains the accounting principles used in preparing the financial statements and the company's status as an emerging growth company - The unaudited consolidated interim financial statements are prepared in accordance with GAAP and SEC Regulation S-X, Rule 10-01, and include all necessary adjustments for fair presentation[24](index=24&type=chunk)[25](index=25&type=chunk) - The consolidated financial statements include Repay Holdings Corporation and its majority-owned subsidiary Hawk Parent Holdings LLC and its subsidiaries[26](index=26&type=chunk) - Repay Holdings Corporation is an 'emerging growth company' and has elected not to use the extended transition period for complying with new or revised financial accounting standards[39](index=39&type=chunk)[3](index=3&type=chunk) - The company is currently assessing the impact of ASU 2016-02 (Leases) and ASU 2014-09 (Revenue from Contracts with Customers) on its consolidated financial statements, with effective dates for emerging growth companies in fiscal years beginning after December 15, 2020 and December 15, 2018, respectively[42](index=42&type=chunk)[43](index=43&type=chunk) [3. Earnings per share](index=12&type=section&id=3.%20Earnings%20per%20share) Details the calculation of basic and diluted earnings per share, including factors affecting dilutive effects - For the Successor period (July 11, 2019 to September 30, 2019), basic and diluted net loss per common share were the same at **$(0.25)** due to anti-dilutive effects of potential common stock equivalents[45](index=45&type=chunk)[46](index=46&type=chunk) Common Stock Equivalent Shares Excluded from Diluted EPS (Successor Period) | Item | Shares | | :------------------------------------------ | :------- | | Post-Merger Repay Units exchangeable for Class A common stock | 22,045,296 | | Earn-out Post-Merger Repay Units exchangeable for Class A common stock | 7,500,000 | | Dilutive warrants exercisable for Class A common stock | 1,160,053 | | Unvested restricted share awards of Class A common stock | 2,031,861 | | **Share equivalents excluded from earnings (loss) per share** | **32,737,210** | [4. Business combinations](index=13&type=section&id=4.%20Business%20combinations) Provides details on the accounting for the Hawk Parent Business Combination and the TriSource Solutions acquisition [Hawk Parent Holdings LLC](index=13&type=section&id=Hawk%20Parent%20Holdings%20LLC) Details the acquisition of Hawk Parent, including purchase consideration, goodwill recognized, and transaction expenses - The Business Combination of Thunder Bridge and Hawk Parent closed on July 11, 2019, with Thunder Bridge changing its name to Repay Holdings Corporation; Hawk Parent members received Class V common stock, Post-Merger Repay Units, cash, and contingent Earn-Out Units[48](index=48&type=chunk)[49](index=49&type=chunk) Preliminary Purchase Consideration for Hawk Parent Acquisition | Consideration Type | Amount ($) | | :----------------- | :--------- | | Cash Consideration | 260,811,062 | | Unit Consideration | 220,452,964 | | Contingent consideration | 12,300,000 | | Tax receivable agreement liability | 65,886,701 | | Net working capital adjustment | (396,737) | | **Total purchase price** | **559,053,990** | - Goodwill of **$340.3 million** was recognized, primarily due to Hawk Parent's strong market position and assembled workforce[57](index=57&type=chunk) - Transaction expenses related to the Business Combination were significant: **$1,212,589** for Successor (July 11-Sep 30, 2019) and **$34,761,354** for Predecessor (Jan 1-July 10, 2019)[58](index=58&type=chunk) [TriSource Solutions, LLC](index=16&type=section&id=TriSource%20Solutions%2C%20LLC) Details the acquisition of TriSource Solutions, including purchase consideration, goodwill recognized, and its contribution to revenue and net income - REPAY acquired TriSource Solutions, LLC on August 13, 2019, for approximately **$60 million** in cash, plus a performance-based earn-out of up to **$5 million**, providing REPAY with back-end transaction processing capabilities[59](index=59&type=chunk)[60](index=60&type=chunk) Preliminary Purchase Consideration for TriSource Acquisition | Consideration Type | Amount ($) | | :----------------- | :--------- | | Cash Consideration | 60,034,000 | | Contingent consideration | 2,250,000 | | **Total purchase price** | **62,284,000** | - Goodwill of **$29.7 million** was recognized for TriSource, attributed to its market position and assembled workforce[63](index=63&type=chunk) - Since acquisition, TriSource contributed **$3,440,678** to revenue and **$170,874** to net income for the period July 11, 2019 to September 30, 2019[64](index=64&type=chunk) [Pro Forma Financial Information (Unaudited)](index=18&type=section&id=Pro%20Forma%20Financial%20Information%20%28Unaudited%29) Presents hypothetical financial results as if the Hawk Parent and TriSource acquisitions occurred at an earlier date Pro Forma Financial Information (Unaudited) | (in $ thousands) | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | 44,182,943 | 38,396,483 | 132,946,950 | 113,973,450 |\ | Net loss | (14,360,187) | (5,997,998) | (22,112,665) | (21,465,282) |\ | Net loss attributable to non-controlling interests | (5,850,340) | (2,443,584) | (9,008,700) | (8,744,956) |\ | Net loss attributable to the Company | (8,509,847) | (3,554,414) | (13,103,965) | (12,720,326) |\ | Loss per Class A share - basic and diluted | (0.25) | (0.11) | (0.38) | (0.38) | - The pro forma financial information gives effect to the Hawk Parent Business Combination and TriSource Acquisition as if they occurred on January 1, 2018, reflecting adjustments for stock issuance, debt, intangible assets, and excluding acquisition-related costs[65](index=65&type=chunk) [5. Property and equipment](index=18&type=section&id=5.%20Property%20and%20equipment) Details the company's property and equipment assets, including their net carrying value and depreciation expense Property and Equipment, Net | (in $) | September 30, 2019 (Successor) | December 31, 2018 (Predecessor) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Furniture, fixtures, and office equipment | 850,944 | 893,287 | | Computers | 589,375 | 600,139 | | Leasehold improvements | 209,011 | 310,520 | | Total | 1,649,330 | 1,803,946 | | Less: Accumulated depreciation and amortization | 164,123 | 556,797 | | **Net Property and Equipment** | **1,485,207** | **1,247,149** | - Depreciation expense for property and equipment was **$164,123** for the Successor period (July 10-Sep 30, 2019) and **$282,303** for the Predecessor period (Jan 1-July 10, 2019)[67](index=67&type=chunk) [6. Intangible assets](index=19&type=section&id=6.%20Intangible%20assets) Provides a breakdown of the company's indefinite-lived and definite-lived intangible assets, along with their amortization schedules - The Company holds **$20,800,000** in indefinite-lived intangible assets (trade names) as of September 30, 2019, arising from the Hawk Parent and TriSource acquisitions[69](index=69&type=chunk) Definite-Lived Intangible Assets (September 30, 2019) | Asset Type | Gross Carrying Value ($) | Accumulated Amortization ($) | Net Carrying Value ($) | Weighted Average Useful Life (Years) | | :------------------------ | :----------------------- | :--------------------------- | :--------------------- | :----------------------------------- | | Customer relationships | 236,500,000 | 5,038,817 | 231,461,183 | 9.79 | | Channel relationships | 3,000,000 | 66,935 | 2,933,065 | 9.78 | | Software costs | 70,632,965 | 5,109,846 | 65,523,119 | 2.78 | | Non-competition agreements | 3,250,000 | 323,118 | 2,926,882 | 1.80 | | **Total** | **313,382,965** | **10,538,717** | **302,844,248** | **8.13** | - Amortization expense for definite-lived intangible assets was **$10,538,717** for the Successor period (July 11-Sep 30, 2019)[69](index=69&type=chunk) Estimated Future Amortization Expense | Year Ending December 31, | Estimated Future Amortization Expense ($) | | :----------------------- | :---------------------------------------- | | 2019 | 12,279,830 | | 2020 | 49,119,322 | | 2021 | 48,389,953 | | 2022 | 36,500,761 | | 2023 | 23,950,000 | | 2024 | 23,950,000 | | Thereafter | 108,654,382 | [7. Borrowings](index=20&type=section&id=7.%20Borrowings) Details the company's debt structure, including the termination of the prior credit agreement and the terms of the new credit facility - The Predecessor's Prior Credit Agreement was terminated upon the Business Combination, and the outstanding revolving loan balance of **$3,500,000** was settled[71](index=71&type=chunk)[72](index=72&type=chunk) - The Company entered into a New Credit Agreement on July 11, 2019, providing a revolving credit facility, term loan A, and delayed draw term loan, collateralized by substantially all assets, with an interest rate of **5.26%** at September 30, 2019[73](index=73&type=chunk)[74](index=74&type=chunk) Total Borrowings Under Credit Facilities | (in $) | September 30, 2019 (Successor) | December 31, 2018 (Predecessor) | | :-------------------------------- | :----------------------------- | :------------------------------ | | Term Loan | 170,000,000 | 63,750,000 | | Delayed Draw Term Loan | 40,000,000 | 28,500,000 | | Revolving Credit Facility | - | 3,500,000 | | Total borrowings under credit facility | 210,000,000 | 95,750,000 | | Less: Current maturities of long-term debt | 5,250,000 | 4,900,000 | | Less: Long-term loan debt issuance cost | 5,841,704 | 1,534,796 | | **Total non-current borrowings** | **198,908,296** | **89,315,204** | - The Successor incurred **$2,462,237** in interest expense on Term Loans from July 11 to September 30, 2019[76](index=76&type=chunk) [8. Commitments and contingencies](index=21&type=section&id=8.%20Commitments%20and%20contingencies) Outlines the company's future minimum lease payments under noncancelable operating leases Future Minimum Lease Payments Under Noncancelable Operating Leases (as of September 30, 2019) | Year Ended | Amounts ($) | | :--------- | :---------- | | 2019 | 354,770 | | 2020 | 842,684 | | 2021 | 606,477 | | 2022 | 255,105 | | 2023 | 103,868 | | Thereafter | - | | **Total** | **2,162,904** | [9. Related party transactions](index=21&type=section&id=9.%20Related%20party%20transactions) Reports on management fees paid to a related party and transaction costs incurred on behalf of related parties - The Predecessor paid management fees to Corsair Capital LLC of **$10,753** (July 1-10, 2019) and **$210,753** (Jan 1-July 10, 2019)[78](index=78&type=chunk) - The Successor incurred **$630,455** in transaction costs on behalf of related parties (July 11-Sep 30, 2019), while the Predecessor incurred **$6,762,601** (Jan 1-July 10, 2019)[79](index=79&type=chunk) [10. Share based compensation](index=22&type=section&id=10.%20Share%20based%20compensation) Describes the company's 2019 Omnibus Incentive Plan and details the activity and unrecognized expense for restricted stock awards - The 2019 Omnibus Incentive Plan, effective July 11, 2019, reserved **7,326,728** shares of Class A common stock for equity-based awards[81](index=81&type=chunk) Restricted Stock Awards (RSAs) and Restricted Stock Units (RSUs) Activity (July 11 - Sep 30, 2019) | Activity | Class A Common Stock | Weighted Average Grant Date Fair Value ($) | | :------------------------ | :------------------- | :--------------------------------------- | | Unvested at July 11, 2019 | - | | | Granted | 3,000,229 | 11.73 | | Forfeited | 152,976 | 11.82 | | Vested | 575,301 | 11.64 | | **Unvested at September 30, 2019** | **2,271,952** | **11.75** | - Unrecognized compensation expense for unvested RSAs and RSUs was **$25,453,313** at September 30, 2019, to be recognized over **5.35 years**[83](index=83&type=chunk) - Predecessor profit interest units (**9,171 units**) automatically vested upon the Business Combination, with an estimated fair value of **$658,195** for July 1-10, 2019[84](index=84&type=chunk) [11. Taxation](index=23&type=section&id=11.%20Taxation) Explains the company's tax structure, effective tax rate, deferred tax assets and liabilities, and the tax receivable agreement liability - Repay Holdings Corporation is taxed as a corporation, while Hawk Parent is treated as a partnership for U.S. federal income tax purposes[85](index=85&type=chunk) - The Company's effective tax rate for July 11-September 30, 2019, was **14.6%**, resulting in an income tax benefit of **$2,719,402**, primarily due to the operating loss and non-taxable portion of Hawk Parent's earnings attributable to noncontrolling interests[86](index=86&type=chunk)[88](index=88&type=chunk) - A deferred tax asset (DTA) and offsetting deferred tax liability (DTL) of **$5,577,541** were recognized due to the Merger, with a **100%** valuation allowance on the DTA[87](index=87&type=chunk) - As of September 30, 2019, the Company had a tax receivable agreement liability of **$66,337,623**, representing projected obligations under the TRA[93](index=93&type=chunk) [12. Subsequent events](index=24&type=section&id=12.%20Subsequent%20events) Reports on significant events occurring after the reporting period, including unit issuances, share releases, a swap transaction, and a new acquisition - On October 1, 2019, Hawk Parent issued **3,750,000** additional Post-Merger Repay Units due to the Class A common stock price exceeding **$12.50**[95](index=95&type=chunk) - On October 2, 2019, **1,482,500** shares of Class A common stock held by Thunder Bridge Acquisition, LLC were released from escrow[95](index=95&type=chunk) - On October 1, 2019, the Company entered into a swap transaction with Regions Bank for a notional amount of **$140,000,000**, making fixed payments against 3-month LIBOR floating payments[97](index=97&type=chunk) - On October 14, 2019, the Company announced the acquisition of APS Payments for up to **$60 million**, including an earn-out, financed by cash and New Credit Agreement borrowings[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of Repay Holdings Corporation's financial condition and results of operations, covering revenue and expense components, period-over-period comparisons, non-GAAP financial measures, liquidity, capital resources, and recent acquisitions. It highlights the impact of the Business Combination and the TriSource acquisition on the company's financial performance [Overview](index=25&type=section&id=Overview) Describes REPAY's business model as an integrated payment processing solution provider and highlights key operating metrics like card payment volume - REPAY provides integrated payment processing solutions to industry-oriented vertical markets, leveraging its proprietary technology platform to simplify electronic payments[101](index=101&type=chunk) - Card payment volume is a key operating metric, with the company processing approximately **$2.6 billion** in Q3 2019 (**40% QoQ growth**) and **$7.3 billion** in the nine months ended September 30, 2019 (**33% period-over-period growth**)[102](index=102&type=chunk) [Business Combination](index=25&type=section&id=Business%20Combination) Explains the accounting treatment of the Business Combination, where Repay Holdings Corporation became the acquirer and Hawk Parent the predecessor - The Business Combination closed on July 11, 2019, with Repay Holdings Corporation as the accounting acquirer and Hawk Parent as the accounting Predecessor, leading to financial statements presented on different bases due to the acquisition method of accounting[103](index=103&type=chunk) [Key Factors Affecting Our Business](index=26&type=section&id=Key%20Factors%20Affecting%20Our%20Business) Identifies critical elements influencing the company's performance, such as payment volume, customer acquisition, acquisitions, technology, and economic conditions - Key factors impacting the business include card payment volume, ability to attract new merchants, successful integration of acquisitions (TriSource, APS Payments), offering competitive payment technology, and general economic conditions[105](index=105&type=chunk)[109](index=109&type=chunk) - The acquisition of TriSource Solutions, LLC on August 14, 2019, for up to **$65 million**, is expected to provide back-end transaction processing capabilities[105](index=105&type=chunk) [Key Components of Our Revenues and Expenses](index=26&type=section&id=Key%20Components%20of%20Our%20Revenues%20and%20Expenses) Breaks down the primary sources of revenue and categories of expenses, including volume-based fees and operational costs - Revenues are primarily derived from volume-based payment processing fees (discount fees) and fixed transaction/service fees, with discount fees including processing, service, interchange, and payment network fees[106](index=106&type=chunk) - Expenses include interchange and network fees (pass-through), other costs of services (commissions, third-party processing), selling, general and administrative (salaries, share-based compensation, professional fees), depreciation and amortization, and interest expense[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Provides a comparative analysis of the company's financial performance across different reporting periods [Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018](index=27&type=section&id=Three%20Months%20Ended%20September%2030%2C%202019%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202018) Compares the company's financial results for the three-month periods, highlighting revenue and expense changes - Total revenue for the combined three months ended September 30, 2019, increased by **$8.8 million** (**27.2%**) to **$41.1 million**, driven by new customers, existing customer growth, and the TriSource acquisition (approx. **$3.4 million** incremental revenue)[113](index=113&type=chunk) - Selling, general and administrative expenses for the combined three months ended September 30, 2019, increased by **$49.0 million** (**802.2%**) to **$55.1 million**, primarily due to one-time Business Combination expenses[117](index=117&type=chunk) - Depreciation and amortization expenses increased by **$8.4 million** (**314.0%**) to **$11.0 million**, mainly due to fair value adjustments to intangibles from the Business Combination and TriSource acquisition[119](index=119&type=chunk) - Interest expense increased by **$1.4 million** (**95.8%**) to **$2.9 million**, due to a higher average outstanding principal balance under the New Credit Agreement[120](index=120&type=chunk) - The Company recorded an income tax benefit of **$2.7 million** for the Successor Period due to operating loss from Business Combination expenses[124](index=124&type=chunk) [Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018](index=29&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202019%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202018) Compares the company's financial results for the nine-month periods, detailing revenue and expense trends - Total revenue for the combined nine months ended September 30, 2019, increased by **$20.4 million** (**21.2%**) to **$116.5 million**, driven by new customers, existing customer growth, and the TriSource acquisition (approx. **$3.4 million** incremental revenue)[125](index=125&type=chunk) - Other costs of services decreased by **$0.7 million** (**3.3%**) to **$19.6 million**, despite higher processing volume, due to improvements in processing infrastructure and reduced reliance on third-party vendors[127](index=127&type=chunk) - Selling, general and administrative expenses increased by **$51.2 million** (**243.7%**) to **$72.2 million**, primarily due to one-time Business Combination expenses[128](index=128&type=chunk) - Depreciation and amortization expenses increased by **$9.3 million** (**123.3%**) to **$16.9 million**, mainly due to fair value adjustments to intangibles from the Business Combination and TriSource acquisition[130](index=130&type=chunk) - Interest expense increased by **$1.3 million** (**29.6%**) to **$5.8 million**, due to a higher average outstanding principal balance under the New Credit Agreement and Prior Credit Agreement[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) Explains and reconciles non-GAAP financial measures like Adjusted EBITDA and Adjusted Net Income, used for evaluating operational performance - Adjusted EBITDA and Adjusted Net Income are non-GAAP measures used by management to evaluate operating results, excluding certain non-cash and non-recurring charges[135](index=135&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (Three Months Ended September 30) | (in $ thousands) | 2019 (Pro Forma) | 2018 (Predecessor) | | :------------------------------------------ | :--------------- | :----------------- | | Net income (loss) | (41,390) | 3,727 | | Add: Interest expense | 2,913 | 1,488 | | Add: Depreciation and amortization | 3,783 | 2,666 | | Less: Income tax (benefit) | (2,719) | — | | **EBITDA** | **(37,414)** | **7,881** | | Add: Loss on extinguishment of debt | 1,316 | - | | Add: Non-cash change in fair value of assets and liabilities | 451 | - | | Add: Share-based compensation expense | 10,409 | 199 | | Add: Transaction expenses | 35,017 | 995 | | Add: Management Fees | 11 | 100 | | Add: Legacy commission related charges | 1,877 | - | | Add: Employee recruiting costs | 18 | - | | Add: Other taxes | 32 | 7 | | Add: Strategic initiative costs | 80 | 7 | | Add: Other non-recurring charges | 114 | 12 | | **Adjusted EBITDA** | **11,910** | **9,201** | Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (Nine Months Ended September 30) | (in $ thousands) | 2019 (Pro Forma) | 2018 (Predecessor) | | :------------------------------------------ | :--------------- | :----------------- | | Net income (loss) | (32,369) | 8,392 | | Add: Interest expense | 5,831 | 4,501 | | Add: Depreciation and amortization | 9,673 | 7,580 | | Less: Income tax (benefit) | (2,719) | - | | **EBITDA** | **(19,585)** | **20,473** | | Add: Loss on extinguishment of debt | 1,316 | 1 | | Add: Non-cash change in fair value of contingent consideration | - | (1,000) | | Add: Non-cash change in fair value of assets and liabilities | 451 | - | | Add: Share-based compensation expense | 10,660 | 630 | | Add: Transaction expenses | 37,513 | 2,155 | | Add: Management Fees | 211 | 300 | | Add: Legacy commission related charges | 2,427 | 4,168 | | Add: Employee recruiting costs | 33 | 146 | | Add: Other taxes | 259 | 201 | | Add: Strategic initiative costs | 296 | 79 | | Add: Other non-recurring charges | 114 | (67) | | **Adjusted EBITDA** | **33,695** | **27,087** | Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Three Months Ended September 30) | (in $ thousands) | 2019 (Pro Forma) | 2018 (Predecessor) | | :------------------------------------------ | :--------------- | :----------------- | | Net income (loss) | (41,390) | 3,727 | | Add: Amortization of Acquisition-Related Intangibles | 2,525 | 1,980 | | Add: Loss on extinguishment of debt | 1,316 | - | | Add: Non-cash change in fair value of assets and liabilities | 451 | - | | Add: Share-based compensation expense | 10,409 | 199 | | Add: Transaction expenses | 35,017 | 995 | | Add: Management Fees | 11 | 100 | | Add: Legacy commission related charges | 1,877 | - | | Add: Employee recruiting costs | 18 | - | | Add: Strategic initiative costs | 80 | 7 | | Add: Other non-recurring charges | 114 | 12 | | **Adjusted Net Income** | **10,428** | **7,020** | | Shares of Class A common stock outstanding (on an as-converted basis) | 57,531,359 | | | Adjusted Net income per share | 0.18 | | Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Nine Months Ended September 30) | (in $ thousands) | 2019 (Pro Forma) | 2018 (Predecessor) | | :------------------------------------------ | :--------------- | :----------------- | | Net income (loss) | (32,369) | 8,392 | | Add: Amortization of Acquisition-Related Intangibles | 6,485 | 5,939 | | Add: Loss on extinguishment of debt | 1,316 | 1 | | Add: Non-cash change in fair value of contingent consideration | - | (1,000) | | Add: Non-cash change in fair value of assets and liabilities | 451 | - | | Add: Share-based compensation expense | 10,660 | 630 | | Add: Transaction expenses | 37,513 | 2,155 | | Add: Management Fees | 211 | 300 | | Add: Legacy commission related charges | 2,427 | 4,168 | | Add: Employee recruiting costs | 33 | 146 | | Add: Strategic initiative costs | 296 | 79 | | Add: Other non-recurring charges | 114 | (67) | | **Adjusted Net Income** | **27,136** | **20,743** | | Shares of Class A common stock outstanding (on an as-converted basis) | 57,531,359 | | | Adjusted Net income per share | 0.47 | | - Adjusted EBITDA increased by **29.4%** to **$11.9 million** for the three months ended September 30, 2019, and by **24.4%** to **$33.7 million** for the nine months ended September 30, 2019, compared to prior periods[153](index=153&type=chunk)[154](index=154&type=chunk) - Adjusted Net Income increased by **48.5%** to **$10.4 million** for the three months ended September 30, 2019, and by **30.8%** to **$27.1 million** for the nine months ended September 30, 2019, compared to prior periods[153](index=153&type=chunk)[154](index=154&type=chunk) - Net income decreased significantly due to one-time expenses from the Business Combination and TriSource acquisition[155](index=155&type=chunk) [Seasonality](index=37&type=section&id=Seasonality) Discusses the typical seasonal fluctuations in the company's transaction volumes and revenues - The company experiences seasonal fluctuations, with volumes and revenues typically increasing in the first quarter due to consumer tax refunds and increased repayment activity[156](index=156&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its short-term and long-term financial obligations, including cash position and borrowing capacity - As of September 30, 2019, the company had **$45.5 million** in cash and cash equivalents and **$10.0 million** in available borrowing capacity under the New Credit Agreement[157](index=157&type=chunk) - Primary cash needs include working capital, technology investment, acquisitions, debt payments, and tax distributions, with expected cash flow from operations and existing liquidity deemed sufficient for the next twelve months[157](index=157&type=chunk) - The company is a holding company dependent on distributions from subsidiaries, which may be restricted by law or contractual agreements[158](index=158&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) Summarizes the company's cash generation and usage across operating, investing, and financing activities Summary of Cash Flows (in $ thousands) | Activity | July 11, 2019 to Sep 30, 2019 (Successor) | Jan 1, 2019 to July 10, 2019 (Predecessor) | Three Months Ended Sep 30, 2018 (Predecessor) | | :-------------------------------- | :---------------------------------------- | :----------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | 4,937 | 8,350 | 14,795 | | Net cash used in investing activities | (303,507) | (4,046) | (4,295) | | Net cash provided (used) by financing activities | 355,619 | (9,355) | (4,419) | - Net cash used in investing activities was **$303.5 million** in the Successor Period, primarily due to the Hawk Parent Business Combination and TriSource acquisition[163](index=163&type=chunk) - Net cash provided by financing activities was **$355.6 million** in the Successor Period, driven by **$210.0 million** in new long-term debt, **$135.0 million** from private placement, and **$148.9 million** from the Business Combination, partially offset by debt repayments and warrant repurchases[165](index=165&type=chunk) [Indebtedness](index=39&type=section&id=Indebtedness) Details the company's debt structure, including the new credit agreement and compliance with financial covenants - The Prior Credit Agreement was terminated upon the Business Combination, and a new **$230.0 million** Credit Agreement was entered into on July 11, 2019, comprising a **$170.0 million** term loan, a **$40.0 million** delayed draw term loan, and a **$20.0 million** revolving credit facility[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - As of September 30, 2019, term loan borrowings were **$204.2 million** (net of deferred issuance costs), with no outstanding revolver borrowings, and the company was in compliance with financial covenants[172](index=172&type=chunk) [Tax Receivable Agreement](index=39&type=section&id=Tax%20Receivable%20Agreement) Explains the company's obligations under the Tax Receivable Agreement and its potential impact on liquidity - The Company entered into a Tax Receivable Agreement (TRA) upon the Business Combination, obligating it to pay **100%** of certain tax benefits realized from increases in tax basis due to exchanges of Post-Merger Repay Units[173](index=173&type=chunk) - The TRA liability is expected to be substantial and could exceed actual tax benefits, potentially impacting liquidity, and may be accelerated under certain conditions[174](index=174&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) [Critical Accounting Policies and Recently Issued Accounting Pronouncements](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Recently%20Issued%20Accounting%20Pronouncements) Refers to previously disclosed information regarding key accounting policies and new standards - Information on critical accounting policies and recent accounting pronouncements is incorporated by reference from previous SEC filings[177](index=177&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of material off-balance sheet arrangements for the reported periods - The company did not have any material off-balance sheet arrangements as of September 30, 2019 (Successor) or December 31, 2018 (Predecessor)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including inflation, interest rate fluctuations, and foreign currency exchange rates, and their potential impact on financial condition and results of operations [Effects of Inflation](index=40&type=section&id=Effects%20of%20Inflation) Discusses the historical and potential future impact of inflation on the company's revenues and cost of services - The effects of inflation on revenues and cost of services have not been significant to date, but future impacts are not assured[179](index=179&type=chunk) [Interest Rate Risk](index=40&type=section&id=Interest%20Rate%20Risk) Analyzes the company's exposure to interest rate fluctuations on its floating-rate debt and the potential impact of LIBOR phase-out - The company is exposed to interest rate risk on its floating-rate debt, where a **1.0%** increase or decrease in interest rates on borrowings under the New Credit Agreement would change cash interest expense by approximately **$2.1 million** per annum[180](index=180&type=chunk) - The phase-out of LIBOR by the end of 2021 introduces uncertainty regarding future interest payment obligations[182](index=182&type=chunk) [Foreign Currency Exchange Rate Risk](index=40&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) Assesses the company's exposure to foreign currency exchange rate fluctuations - Invoices are denominated in U.S. dollars, and the company does not expect significant foreign currency transaction risk[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section outlines the company's disclosure controls and procedures, the evaluation of their effectiveness, and changes in internal control over financial reporting, particularly in light of the recent Business Combination [Controls and Procedures](index=41&type=section&id=Controls%20and%20Procedures) Describes the company's system of disclosure controls and procedures designed to ensure timely and accurate financial reporting - The company maintains disclosure controls and procedures to ensure timely and accurate reporting of information required by the Securities Exchange Act of 1934[184](index=184&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports on the effectiveness of the company's disclosure controls and procedures as evaluated by management - As of September 30, 2019, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[185](index=185&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Discusses any material changes in the company's internal control over financial reporting during the reporting period - During the quarter ended September 30, 2019, Hawk Parent's internal controls became the company's internal controls following the Business Combination, and the company is actively designing and implementing internal controls commensurate with its expanded operations[186](index=186&type=chunk) [PART II – OTHER INFORMATION](index=42&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [ITEM 1. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that the company is involved in legal actions arising from normal business activities but does not believe any currently pending proceedings will have a material adverse effect on its business or financial condition - The company is a defendant in legal actions from normal business activities but does not anticipate a material adverse effect on its business, prospects, financial condition, cash flows, or results of operations from currently pending proceedings[188](index=188&type=chunk) [ITEM 1A. RISK FACTORS](index=42&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section details significant risks that could materially harm the company's business, financial condition, liquidity, and results of operations, categorized into risks related to the business, the Business Combination, and the Class A Common Stock [Risks Related to Our Business](index=42&type=section&id=Risks%20Related%20to%20Our%20Business) Details various operational and market risks that could negatively impact the company's business and financial performance - The payment processing industry is highly competitive, with many larger competitors, which could adversely affect fees, margins, and customer relationships[191](index=191&type=chunk)[193](index=193&type=chunk) - Unauthorized disclosure of merchant or consumer data (e.g., through security breaches) could lead to significant fines, litigatio

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Thunder Bridge Acquisition, Ltd. as of June 30, 2019, including balance sheets, statements of operations, changes in shareholders' equity, and cash flows, with notes on accounting and the proposed Repay business combination [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2019, total assets were **$266.5 million**, primarily **$266.4 million** in trust account cash and marketable securities, with **$11.9 million** in liabilities and **$5.0 million** in shareholders' equity Condensed Consolidated Balance Sheet Highlights (as of June 30, 2019) | Balance Sheet Item | June 30, 2019 (Unaudited) ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,005 | $108,818 | | Cash and marketable securities held in Trust Account | $266,436,421 | $263,254,659 | | **Total Assets** | **$266,494,276** | **$263,494,089** | | **Liabilities & Equity** | | | | Total Liabilities | $11,931,622 | $10,010,747 | | Ordinary shares subject to possible redemption | $249,562,653 | $248,483,332 | | Total Shareholders' Equity | $5,000,001 | $5,000,010 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2019, the company reported **$1.1 million** net income, driven by **$1.8 million** interest income and **$1.4 million** unrealized gains, offsetting **$2.1 million** operating expenses Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2018 ($) | | :--- | :--- | :--- | :--- | | Loss from operations | $(1,098,216) | $(2,102,450) | $(40,699) | | Interest income | $1,570,916 | $1,772,169 | $6,369 | | Unrealized gains on marketable securities | $89,000 | $1,409,593 | $29,682 | | **Net income (loss)** | **$561,700** | **$1,079,312** | **$(4,648)** | [Condensed Consolidated Statement of Changes in Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) For the six months ended June 30, 2019, total shareholders' equity remained stable at **$5.0 million**, with **$1.1 million** net income offset by reclassification to ordinary shares subject to redemption - Shareholders' equity remained flat at approximately **$5.0 million** from December 31, 2018, to June 30, 2019, with net income of **$1.1 million** offset by a change in the value of ordinary shares subject to possible redemption[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2019, net cash used in operating activities was **$666,679**, offset by **$561,866** from financing, resulting in a **$104,813** net decrease in cash and a period-end balance of **$4,005** Cash Flow Summary for the Six Months Ended June 30, 2019 | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net cash used in operating activities | $(666,679) | | Net cash used in investing activities | $0 | | Net cash provided by financing activities | $561,866 | | **Net change in cash and cash equivalents** | **$(104,813)** | | Cash and cash equivalents at end of period | $4,005 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's SPAC formation, public offering, accounting policies, and the proposed Repay merger, including consideration, PIPE financing, and warrant amendments - The company is a Cayman Islands exempted company formed to effect a business combination and has until December 21, 2019, to do so[20](index=20&type=chunk)[31](index=31&type=chunk) - On January 21, 2019, the Company entered into a Merger Agreement with Hawk Parent Holdings, LLC ("Repay") for a business combination, after which the company will be renamed "Repay Holdings Corporation"[86](index=86&type=chunk) - The merger consideration for Repay is **$580.65 million**, subject to adjustments, to be paid in a mix of cash and Post-Merger Repay Units[87](index=87&type=chunk) - To support the transaction, the company secured a **$135 million** PIPE (Private Investment in Public Equity) financing at **$10.00** per share[103](index=103&type=chunk) - The company is proposing a Warrant Amendment where each warrant will become exercisable for one-quarter of a share, and holders will receive **$1.50** in cash per warrant, requiring approval from 65% of public warrant holders[111](index=111&type=chunk)[114](index=114&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's status as a blank check company, the proposed Repay merger, including agreement terms, PIPE financing, and warrant amendments, and highlights a **$2.2 million** working capital deficit and reliance on Sponsor loans, raising going concern doubts - The company is a blank check company with the primary purpose of effecting a business combination, focusing on the pending merger with Repay[121](index=121&type=chunk)[124](index=124&type=chunk) - As of June 30, 2019, the company had only **$4,005** in cash available for operations and a working capital deficit of **$2.2 million**[153](index=153&type=chunk)[155](index=155&type=chunk) - The company has borrowed **$561,866** from its Sponsor under a promissory note to fund working capital deficiencies and transaction costs, raising substantial doubt about its ability to continue as a going concern without completing the business combination[154](index=154&type=chunk)[155](index=155&type=chunk) - The company has no off-balance sheet arrangements, and its primary contractual obligation is a deferred underwriting commission of **$9.7 million**, payable upon completion of a business combination[156](index=156&type=chunk)[159](index=159&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has not engaged in hedging activities and expects minimal market risk, as Trust Account funds are invested in short-term U.S. government treasury bills or money market funds, with no material interest rate exposure - The company's exposure to market risk is minimal, with Public Offering proceeds held in the Trust Account invested in U.S. government treasury bills with maturities of 180 days or less or in money market funds[173](index=173&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2019, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[175](index=175&type=chunk) - There were no changes in the company's internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[176](index=176&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings to disclose - The company has no legal proceedings to report[178](index=178&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2018 Annual Report on Form 10-K have occurred, with additional business combination risks disclosed in the Form S-4 registration statement - No material changes to risk factors from the Annual Report on Form 10-K for fiscal year 2018 have occurred, and additional risks related to the business combination are disclosed in the Form S-4 registration statement[179](index=179&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the use of **$260.6 million** Public Offering proceeds placed in the Trust Account and the planned **$135 million** PIPE Investment of Class A ordinary shares at **$10.00** per share for the business combination - From its Public Offering and Private Placement, the company placed **$260.6 million** into the Trust Account, with cash held outside the Trust Account at **$4,005** as of June 30, 2019[184](index=184&type=chunk) - On May 9, 2019, the company entered into subscription agreements for a PIPE Investment to sell **$135 million** of Class A ordinary shares at **$10.00** per share, contingent on the closing of the business combination[185](index=185&type=chunk) [Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[188](index=188&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[189](index=189&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) The company reports no other information - None[189](index=189&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report, including amendments to the Merger Agreement, Sponsor Letter Agreement, and officer certifications - Exhibits filed include the Third Amendment to the Agreement and Plan of Merger, the Second Amendment to the Sponsor Letter Agreement, and various officer certifications[191](index=191&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the quarter ended March 31, 2019, show total assets of approximately $265 million, primarily held in the Trust Account, with a net income of $517,612 driven by non-operating gains [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position as of March 31, 2019, highlighting total assets of **$265 million** and liabilities, with a significant portion of shares subject to redemption Balance Sheet Highlights (as of March 31, 2019 vs. December 31, 2018) | Metric | March 31, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $159,379 | $108,818 | | Cash and marketable securities held in Trust Account | $264,776,505 | $263,254,659 | | **Total Assets** | **$265,024,959** | **$263,494,089** | | Total current liabilities | $1,334,005 | $320,747 | | Deferred underwriting fee payable | $9,690,000 | $9,690,000 | | **Total Liabilities** | **$11,024,005** | **$10,010,747** | | Ordinary shares subject to possible redemption | $249,000,953 | $248,483,332 | | **Total Shareholders' Equity** | **$5,000,001** | **$5,000,010** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's financial performance for the three months ended March 31, 2019, showing a net income of **$517,612** primarily from non-operating gains Statement of Operations (For the Three Months Ended March 31) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Formation costs and other operating expenses | $(1,004,234) | $(60) | | Loss from operations | $(1,004,234) | $(60) | | Interest income | $201,253 | - | | Unrealized gains on marketable securities | $1,320,593 | - | | **Net income (loss)** | **$517,612** | **$(60)** | | Basic and diluted loss available to ordinary shares | $(0.12) | $(0.00) | [Condensed Consolidated Statement of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) Outlines changes in shareholders' equity for the three months ended March 31, 2019, reflecting stability at **$5.0 million** despite net income - For the three months ended March 31, 2019, **Total Shareholders' Equity** remained stable at approximately **$5.0 million**. The net income of **$517,612** was offset by a corresponding change in the value of ordinary shares subject to possible redemption[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows for the three months ended March 31, 2019, indicating negative operating cash flow offset by financing activities Cash Flow Summary (For the Three Months Ended March 31, 2019) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(266,305) | | Net cash provided by financing activities | $316,866 | | **Net change in cash and cash equivalents** | **$50,561** | | Cash and cash equivalents at beginning of period | $108,818 | | **Cash and cash equivalents at end of period** | **$159,379** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of the company's accounting policies, significant transactions, and financial position, including its blank check status and proposed merger - The Company is a blank check company formed to effect a Business Combination and has until **December 21, 2019**, to do so, or it will be required to liquidate[22](index=22&type=chunk)[34](index=34&type=chunk) - On **January 21, 2019**, the Company entered into a Merger Agreement with Repay. The agreement was subsequently amended on **May 9, 2019**, to, among other things, reduce the merger consideration to **$580.65 million** and arrange for a **$135 million PIPE investment**[94](index=94&type=chunk)[103](index=103&type=chunk)[107](index=107&type=chunk) - As part of the amended merger transaction, the Company is proposing a Warrant Amendment that would make each warrant exercisable for **one-quarter of a share** and provide a **$1.50 cash payment per warrant**. This requires approval from **65% of public warrantholders**[116](index=116&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) - The Company's Sponsor has provided a promissory note for up to **$600,000** for working capital, of which **$316,866** was advanced as of **March 31, 2019**. These conditions raise substantial doubt about the company's ability to continue as a going concern if the business combination is not completed[60](index=60&type=chunk)[73](index=73&type=chunk)[37](index=37&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company is a blank check company with its primary activity focused on completing its proposed business combination with Repay, reporting net income from trust account investments while facing a working capital deficit - The company entered into a definitive Merger Agreement with Repay on **January 21, 2019**, and subsequently amended the agreement on **May 9, 2019**. The amendments reduced the base merger consideration from **$600 million** to **$580.65 million** and introduced a **$135 million PIPE investment**[127](index=127&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - For **Q1 2019**, the company had a net income of **$517,612**, a significant change from a net loss of **$60** in **Q1 2018**. This income was generated from the Trust Account and was not from operations, which incurred a loss of **$1,085,551**[143](index=143&type=chunk) - As of **March 31, 2019**, the company had only **$159,379** in cash outside the Trust Account and a working capital deficit of **$1,085,551**. It is funding its operations through advances from its Sponsor, with **$316,866** borrowed under a promissory note[149](index=149&type=chunk)[150](index=150&type=chunk) - Management has expressed substantial doubt about the company's ability to continue as a going concern due to its limited funds and working capital deficit, should the proposed business combination fail[151](index=151&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is limited to interest rate risk on short-term U.S. government treasury investments held in its Trust Account, with no material exposure due to their short maturities - The net proceeds from the IPO and private placement warrants are held in a Trust Account and invested in short-term U.S. government treasury obligations[169](index=169&type=chunk) - The company has not engaged in any hedging activities and does not expect to. The short-term nature of its investments minimizes material exposure to interest rate risk[168](index=168&type=chunk)[169](index=169&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2019, concluding they were effective with no material changes to internal controls over financial reporting - An evaluation of disclosure controls and procedures as of **March 31, 2019**, led the CEO and CFO to conclude they were effective[171](index=171&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the most recently completed fiscal quarter[172](index=172&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings - There are no legal proceedings to report[174](index=174&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018, with additional risks related to its proposed business combination disclosed in its Registration Statement on Form S-4 - No material changes have occurred to the risk factors previously disclosed in the **2018 Form 10-K**[175](index=175&type=chunk) - Investors are directed to the Registration Statement on **Form S-4** for risks associated with the proposed business combination[175](index=175&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details the proceeds from its Public Offering in June 2018, which generated total gross proceeds of approximately **$258 million**, with **$260.6 million** placed in the Trust Account and **$1.17 million** retained for operating expenses - The company's Public Offering and over-allotment exercise generated total gross proceeds of approximately **$258 million** (**$225 million + $33 million**)[176](index=176&type=chunk)[177](index=177&type=chunk) - Net proceeds of **$260,580,000** were placed in the Trust Account, while approximately **$1,169,015** was retained for working capital[180](index=180&type=chunk) [Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[181](index=181&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[182](index=182&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company reports no other information - None[182](index=182&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed, primarily related to the proposed business combination with Repay, including amendments to the Merger Agreement and forms for the PIPE investment and Warrant Agreement amendment - Key exhibits filed include the Second Amendment to the Agreement and Plan of Merger and the form of Subscription Agreement for the PIPE Investment, both dated **May 9, 2019**[184](index=184&type=chunk)