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].
CF ACQUISITION(CFFE) - 2025 Q1 - Quarterly Report