What changed in this filing

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Item 9A. Controls and Procedures

2022-03-01 compared with 2021-03-01 · 62 added, 18 removed, 146 unchanged (35% of the section changed)

11 unchanged sentences

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

During the year ended December 31, 2020, the Company identified inappropriate system access controls over the contract maintenance process.

These controls were not designed to prevent or detect unauthorized changes to contract information, which ultimately led the Company to conclude that this was a material weakness.

The Company remediated this control matter in the fourth quarter of 2020 through the implementation of additional detective, compensating controls over all entries to contract information, and we have tested these enhancements to our internal controls for operating effectiveness.

As of December 31, 2020, the aforementioned material weakness is considered to be remediated and did not lead to any adjustments to previously reported or current financial information.

Our internal control over financial reporting, specifically the review controls over the evaluation of complex, non-routine transactions, were previously determined to be insufficient to detect the proper accounting and reporting for the public warrants and private placement Warrants previously issued by Thunder Bridge, which were outstanding and recorded on our consolidated financial statements at the time of the Business Combination.

Management identified this error when the Securities and Exchange Commission issued a statement (the “Statement”) on the accounting and reporting considerations for warrants issued by special purpose acquisition companies on April 12, 2021.

The Statement addressed certain accounting and reporting considerations related to warrants of a kind similar to the Warrants.

This control deficiency resulted in the Company having to restate certain of our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020 and the quarterly periods included therein, and if not remediated, could have resulted in a material misstatement to future annual or interim consolidated financial statements that would not be prevented or detected.

Accordingly, management previously determined that this control deficiency constituted a material weakness during the quarter ended March 31, 2021.

Since the restatement, management has implemented remediation steps to address that material weakness and to improve our internal control over financial reporting.

Specifically, we expanded and improved our review process for complex securities and related accounting standards.

We have further improved this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.

As of September 30, 2021, the control deficiency related to the restatement had been remediated.

Our management, with the participation of our principal executive and principal financial and accounting officers, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in its 2013 Internal Control — Integrated Framework.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway

Commission (“COSO”) in its 2013 Internal Control — Integrated Framework.

Based on this assessment, our management has concluded that, as of December 31, 20 2 1 , our internal control over financial reporting is effective based on those criteria.

Management excluded BillingTree, Kontrol and Payix from its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2021 because those entities were acquired in business combinations in the past year.

BillingTree’s total assets (excluding goodwill and intangible assets related to the acquisitions which are a part of the Company’s existing control environment) and total revenue represented approximately 3.0% and 14.3%, respectively, of our consolidated total assets and total revenues, as of and for the year ended December 31, 2021.

Kontrol’s total assets (excluding goodwill and intangible assets related to the acquisitions which are a part of the Company’s existing control environment) and total revenue represented approximately 0.1% and 0.8%, respectively, of our consolidated total assets and total revenues, as of and for the year ended December 31, 2021.

Payix’s total assets (excluding goodwill and intangible assets related to the acquisitions which are a part of the Company’s existing control environment) and total revenue represented approximately 0.9% and 0.1%, respectively, of our consolidated total assets and total revenues, as of and for the year ended December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their Report of Independent Registered Certified Public Accounting Firm on Internal Control Over Financial Reporting which is included with the Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

Other than the remediation efforts relating to the material weakness described above, during the quarter ended December 31, 2020, no change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Act) occurred that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

During the quarter ended December 31, 2021, no change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Act) occurred that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

Information called for by Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K has been omitted as we intend to file with the SEC not later than 120 days after the end of our fiscal year ended December 31, 2021, an amendment to this Form 10-K or a definitive Proxy Statement pursuant to Regulation 14A promulgated under the Exchange Act relating to the Company’s annual meeting of stockholders to be held in 2022 (as applicable, the “Part III Filing”).

16 unchanged sentences

The following Consolidated Financial Statements of Repay Holdings Corporation and the Report of the Independent Registered Public Accounting Firm are included in Part II, Item 8 of this report.

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2020 and 2019

Consolidated Statements of Operations for the year ended December 31, 2020, the periods ended December 31, 2019 and July 10, 2019, and the year ended December 31, 2018

Consolidated Statements of Comprehensive Income for the year ended December 31, 2020, the periods ended December 31, 2019 and July 10, 2019, and the year ended December 31, 2018

Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2020, the periods ended December 31, 2019 and July 10, 2019, and the year ended December 31, 2018

Consolidated Statements of Cash Flows for the year ended December 31, 2020, the periods ended December 31, 2019 and July 10, 2019, and the year ended December 31, 2018

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)

Consolidated Balance Sheets as of D ecember 31, 2021 and 2020

Consolidated Statements of Operations for the years ended December 31, 2021 and 2020, and the periods ended December 31, 2019 and July 10, 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2021 and 2020, and the periods ended December 31, 2019 and July 10, 2019

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021 and 2020, and the periods ended December 31, 2019 and July 10, 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020, and the periods ended December 31, 2019 and July 10, 2019

Notes to Consolidated Financial Statements

9 unchanged sentences

001-38531), filed with the SEC on June 20, 2019).

Asset Purchase Agreement, dated as October 11, 2019, by and among Mesa Acquirer LLC, Repay Holdings, LLC, American Payment Services of Coeur D’Alene, LLC, North American Payment Solutions LLC, North American Payment Solutions Inc., David Ford and Phillip Heath (incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K (File No.

001-38531), filed with the SEC on October 15, 2019).

Securities Purchase Agreement, dated as February 10, 2020, by and among Repay Holdings, LLC and the direct and indirect owners of CDT Technologies, LTD.

4 unchanged sentences

001-38531), filed with the SEC on October 27, 2020).

Agreement and Plan of Merger, dated as of May 7, 2021, by and among BT Intermediate, LLC, Repay Holdings Corporation, Beckham Acquisition LLC, Beckham Merger Sub LLC and BillingTree Parent, L.P.

(incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K (File No.

001-38531), filed with the SEC on May 10, 2021).

Certificate of Corporate Domestication of Repay Holdings Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No.

6 unchanged sentences

001-38531), filed with the SEC on January 19, 2021).

Description of Registrant’s Securities (incorporated by reference to Exhibit 4.4 of the Company’s Form 10-K (File No.

001-38531), filed with the SEC on March 16, 2020).

Description of Registrant’s Securities.

Exchange Agreement, dated July 11, 2019, by and among the Company, Repay and the other holders of Class A units of Repay (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No.

13 unchanged sentences

001-38531), filed with the SEC on July 17, 2019).

Registration Rights Agreement, dated as of May 7, 2021, by and among Repay Holdings Corporation and BillingTree Parent, L.P.

(incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No.

001-38531), filed with the SEC on May 10, 2021).

Amended and Restated Revolving Credit Agreement, dated February 3, 2021, by and among Repay Holdings Corporation, Hawk Parent Holdings LLC, Truist Bank, as Administrative Agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No.

001-38531), filed with the SEC on February 5, 2021).

Limited Consent, Waiver and First Amendment to Amended and Restated Revolving Credit Agreement, dated June 15, 2021, by and among Repay Holdings Corporation, Hawk Parent Holdings LLC, Truist Bank, as administrative agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No.

001-38531), filed with the SEC on January 3, 2022).

Second Amendment to Amended and Restated Revolving Credit Agreement, dated December 29, 2021, by and among Repay Holdings Corporation, Hawk Parent Holdings LLC, Truist Bank, as Administrative Agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No.

001-38531), filed with the SEC on January 3, 2022).

Repay Holdings Corporation Omnibus Incentive Plan, effective as of July 11, 2019 (incorporated by reference to Exhibit 10.10 to the Company’s Form 8-K (File No.

5 unchanged sentences

333-229616), filed with the SEC on February 12, 2019).

Amendment No.

1 to Employment Agreement, dated March 1, 2021, between Repay Management Services LLC (as assignee of M & A Ventures, LLC) and John Morris (incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Employment Agreement, dated January 21, 2019, between M & A Ventures, LLC and Shaler Alias (incorporated by reference to Exhibit 10.25 of the Company’s Form S-4 (Registration No.

333-229616), filed with the SEC on February 12, 2019).

Amendment No.

1 to Employment Agreement, dated March 1, 2021, between Repay Management Services LLC (as assignee of M & A Ventures, LLC) and Shaler Alias (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Employment Agreement, dated January 21, 2019, between M & A Ventures, LLC and Timothy J.

1 unchanged sentence

333-229616), filed with the SEC on February 12, 2019).

Amendment No.

1 to Employment Agreement, dated March 1, 2021, between Repay Management Services LLC (as assignee of M & A Ventures, LLC) and Timothy J.

Murphy (incorporated by reference to Exhibit 10.15 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Employment Agreement dated September 1, 2019, between Repay Management Services LLC and Tyler B.

Dempsey (incorporated by reference to Exhibit 10.16 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Amendment No.

1 to Employment Agreement, dated March 1, 2021, between Repay Management Services LLC and Tyler B.

Dempsey (incorporated by reference to Exhibit 10.17 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Employment Agreement, dated January 21, 2019, between M & A Ventures, LLC and Michael F.

Jackson (incorporated by reference to Exhibit 10.29 of the Company’s Form S-4 (Registration No.

333-229616), filed with the SEC on February 12, 2019).

Amendment No.

1 to Employment Agreement, dated March 1, 2021, between Repay Management Services LLC (as assignee of M & A Ventures, LLC) and Michael F.

Jackson (incorporated by reference to Exhibit 10.19 to the Company’s Form 10-K/A (File No.

001-38531), filed with the SEC on April 23, 2021).

Repay Holdings Corporation Form of Restricted Stock Award Agreement (Time Vested) (incorporated by reference to Exhibit 10.17 to the Company’s Form 8-K (File No.

4 unchanged sentences

001-38531), filed with the SEC on November 14, 2019).

Repay Holdings Corporation Summary of Non-Employee Director Compensation, as of April 1, 2022.

Repay Holdings Corporation Form of Restricted Stock Award Agreement between the Company and the Grantee named therein (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No.

4 unchanged sentences

001-38531) filed with the SEC on April 17, 2020).

Repay Holdings Corporation Form of Restricted Stock Award Agreement (2022).

Subsidiaries of the registrant

43 unchanged sentences

Richard Thornburgh

/s/ Jeremy Schein

Jeremy Schein

/s/ Emnet Rios

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures