Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2020

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

Restatement of Previously Issued Financial Statements

The Company has restated the accompanying consolidated financial statements for the year ended December 31, 2019 and the unaudited condensed consolidated financial statements for the three months ended December 31, 2019 and the three months ended and year-to-date periods ended March 31, 2020, June 30, 2020 and September 30, 2020.

The restatement reflects adjustments to correct an error related to the accounting treatment of certain earn out arrangements issued in connection with the 2019 business combination with TPG Pace Holdings Corp., a special purpose acquisition company, that were previously presented as equity. Because the number of Class A-1 common stock (the “contingent earnout shares”) the holder is entitled to under the agreement are dependent, in part, upon the occurrence of a change of control, which is not an input to the fair value of a fixed for fixed contract on equity shares, the Company determined that the contingent earnout share obligation should be presented as a liability and marked to fair value each period, not equity-classified as previously presented. The Company also concluded that Class A-2 common stock issued in the transaction does not represent an increase in equity due to the fact that such shares are not entitled to dividends, voting rights, or a stake in the Company in the case of liquidation.

Accordingly, the contingent earnout is now reflected as a liability at fair value on the Company’s consolidated balance sheets at December 31, 2020 and 2019, and the change in the fair value of such liability in each period is recognized as a gain or loss in the Company’s consolidated statements of operations and comprehensive (loss) income. The contingent earnout liability does not constitute indebtedness of the Company and will only be satisfied, if earned, by settlement in the Company’s Class A-1 common stock in a non-cash transaction. The existence of contingent earnout shares occurred as a result of the Company’s merger and reverse recapitalization occurring on November 20, 2019 and did not impact any reporting periods prior to the merger and reverse recapitalization transaction.

When presenting diluted earnings (loss) per share in the Company’s Form 10-K for the year ended December 31, 2019 and in the Company’s Form 10-Q filings for the 2020 quarterly periods, the shares issuable under the contingent earnout were considered for inclusion in the diluted share count in accordance with U.S. generally accepted accounting principles (“GAAP”). Since the shares issuable under the contingent earnout are contingently issuable shares that depend on future earnings or future market prices of the common stock or a change in control, the shares are excluded when computing diluted earnings (loss) per share unless the shares would be issuable if the reporting date was the end of the contingency period. Upon settlement, these shares are included in Class A-1 common stock in the Company’s basic EPS share count. Also, upon settlement, the liability would be extinguished and the fair value of the shares issued in settlement would be recorded as an increase in equity.

The impact of this correction to the applicable reporting periods for the financial statement line items impacted is as follows (in thousands, except per share data):

NC = No change to the "as reported" amounts

	December 31, 2019				March 31, 2020 (unaudited)				June 30, 2020 (unaudited)				September 30, 2020 (unaudited)
	As Reported		As Restated		As Reported		As Restated		As Reported		As Restated		As Reported		As Restated
Consolidated Balance Sheets:
Contingent earnout share liability	$	—	$	61,478	$	—	$	24,912	$	—	$	32,086	$	—	$	35,684
Total long-term liabilities	$	368,846	$	430,324	$	418,905	$	443,817	$	409,770	$	441,856	$	354,017	$	389,701
A-2 Common Stock	$	1	$	—	$	1	$	—	$	1	$	—	$	1	$	—
Additional paid-in capital	$	105,986	$	54,346	$	107,046	$	74,565	$	108,732	$	76,251	$	189,524	$	157,045
Accumulated deficit	$	(20,470)	$	(30,307)	$	(22,436)	$	(14,866)	$	(43,710)	$	(43,314)	$	(31,567)	$	(34,771)
Total stockholders' equity	$	85,525	$	24,047	$	84,619	$	59,707	$	65,031	$	32,945	$	157,967	$	122,283

	Year ended				Three Months Ended				Three Months Ended
	December 31, 2019				March 31, 2020				June 30, 2020
					(unaudited)				(unaudited)
	As Reported		As Restated		As Reported		As Restated		As Reported		As Restated
Consolidated Statement of Operations:
Amusement revenue	$	5,912	$	9,749	$	1,692	$	2,831	NC		NC
ATM fees and other revenue	$	7,837	$	8,311	$	1,961	$	2,057	NC		NC
Total net revenues	$	424,385	$	428,696	$	105,228	$	106,463	NC		NC
Cost of revenue (exclusive of depreciation and amortization expense shown below)	$	271,999	$	282,008	$	67,980	$	70,708	$	—	$	530
General and administrative	$	75,028	$	69,330	$	23,468	$	21,975	$	10,451	$	9,921
Total operating expenses	$	411,049	$	415,360	$	103,084	$	104,320	NC		NC
(Gain) loss on change in fair value of contingent earnout shares	$	—	$	9,837	$	—	$	(17,406)	$	—	$	7,174
(Loss) income before income tax (benefit) expense	$	(665)	$	(10,502)	$	(2,105)	$	15,301	$	(26,329)	$	(33,503)
Net (loss) income	$	(5,864)	$	(15,701)	$	(1,966)	$	15,440	$	(21,274)	$	(28,448)
(Loss) earnings per share:
Basic	$	(0.09)	$	(0.25)	$	(0.03)	$	0.20	$	(0.27)	$	(0.36)
Diluted	$	(0.09)	$	(0.25)	$	(0.03)	$	0.20	$	(0.27)	$	(0.36)

	Six Months Ended				Three Months Ended				Nine Months Ended
	June 30, 2020				September 30, 2020				September 30, 2020
	(unaudited)				(unaudited)				(unaudited)
	As Reported		As Restated		As Reported		As Restated		As Reported		As Restated
Consolidated Statements of Operations and Comprehensive (Loss) Income:
Amusement revenue	$	1,952	$	3,091	$	4,171	$	3,031	NC		NC
ATM fees and other revenue	$	2,080	$	2,177	$	2,526	$	2,431	NC		NC
Total net revenues	$	105,607	$	106,843	$	136,332	$	135,097	NC		NC
Cost of revenue (exclusive of depreciation and amortization expense shown below)	$	67,980	$	71,239	$	91,792	$	90,556	NC		NC
General and administrative	$	33,919	$	31,896	$	23,164	$	23,164	NC		NC
Total operating expenses	$	127,303	$	128,539	$	127,348	$	126,113	NC		NC
(Gain) loss on change in fair value of contingent earnout shares	$	—	$	(10,232)	$	—	$	3,599	$	—	$	(6,633)
(Loss) income before income tax (benefit) expense	$	(28,434)	$	(18,202)	$	5,550	$	1,951	$	(22,885)	$	(16,252)
Net (loss) income	$	(23,240)	$	(13,008)	$	12,143	$	8,544	$	(11,097)	$	(4,464)
Earnings (loss) per share:
Basic	$	(0.30)	$	(0.17)	$	0.15	$	0.10	$	(0.14)	$	(0.06)
Diluted	$	(0.30)	$	(0.17)	$	0.14	$	0.10	$	(0.14)	$	(0.06)

These errors had a non-cash impact, as such, the statement of cash flows for the year ended December 31, 2019 reflects an adjustment to net (loss) income and a corresponding adjustment for the (gain) loss on the change in fair value of the contingent earnout shares.

The Company also identified certain adjustments to properly classify amusement revenue, ATM fees and other revenue, cost of revenue, and general and administrative expense for the periods presented. This adjustment was identified in the third quarter of 2020 and an adjustment was recorded for the three months ended September 30, 2020 to properly state the year to date results. These amounts have been corrected in connection with this filing. The impacts for the December 31, 2019 period are summarized in the restatement tables above. We have also corrected 2018 for these errors and concluded the impact was not material to the year ended December 31, 2018 financial statements. The result of these corrections was to increase amusement revenue by $2.8 million, increase ATM fees and other revenue by $0.3 million, increase cost of revenue by $7.0 million and decrease general and administrative by $3.9 million. The corrections did not impact total operating (loss) income or net (loss) income for the year ended December 31, 2018.