For the quarterly period ended |
For the transition period from __________ to __________ |
(State or other jurisdiction of incorporation or organization) | (Address of Principal Executive Offices) / (Zip Code) | (I.R.S. Employer Identification No.) | ||||||||||||
( | ||||||||||||||
Registrant's telephone number, including area code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | o | Accelerated filer | o | ||||||||
x | Smaller reporting company | ||||||||||
Emerging growth company |
TABLE OF CONTENTS | ||||||||
AgileThought, Inc. - Quarterly Report on Form 10-Q | ||||||||
March 31, 2022 | ||||||||
Page | ||||||||
AgileThought, Inc. Unaudited Condensed Consolidated Balance Sheets |
(in thousands USD, except share data) | March 31, 2022 | December 31, 2021 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Current VAT receivables | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill and indefinite-lived intangible assets | |||||||||||
Finite-lived intangible assets, net | |||||||||||
Operating lease right of use assets, net | |||||||||||
Other noncurrent assets | |||||||||||
Total noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Other taxes payable | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Obligation for contingent purchase price | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Deferred tax liabilities, net | |||||||||||
Operating lease liabilities, net of current portion | |||||||||||
Warrant liability | |||||||||||
Other noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders' Equity | |||||||||||
Class A common stock $ | |||||||||||
Treasury stock, | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity attributable to the Company | |||||||||||
Noncontrolling interests | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
AgileThought, Inc. Unaudited Condensed Consolidated Statements of Operations |
Three Months Ended March 31, | |||||||||||
(in thousands USD, except share data) | 2022 | 2021 | |||||||||
Net revenues | $ | $ | |||||||||
Cost of revenue | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | |||||||||||
Depreciation and amortization | |||||||||||
Change in fair value of embedded derivative liabilities | ( | ||||||||||
Change in fair value of warrant liability | |||||||||||
Loss on debt extinguishment | |||||||||||
Equity-based compensation expense | |||||||||||
Restructuring expenses | |||||||||||
Other operating expenses, net | |||||||||||
Total operating expense | |||||||||||
(Loss) income from operations | ( | ||||||||||
Interest expense | ( | ( | |||||||||
Other income (expense) | ( | ||||||||||
Loss before income taxes | ( | ( | |||||||||
Income tax expense (benefit) | ( | ||||||||||
Net loss | ( | ( | |||||||||
Net income attributable to noncontrolling interests | |||||||||||
Net loss attributable to the Company | $ | ( | $ | ( | |||||||
Loss per share (Note 16): | |||||||||||
Basic and Diluted Class A common stock | $ | ( | $ | ( | |||||||
Weighted average number of shares: | |||||||||||
Basic and Diluted Class A common stock |
AgileThought, Inc. Unaudited Condensed Consolidated Statements of Comprehensive Loss |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Net loss | $ | ( | $ | ( | |||||||
Actuarial loss | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Comprehensive loss | ( | ( | |||||||||
Less: Comprehensive income attributable to noncontrolling interests | |||||||||||
Comprehensive loss attributable to the Company | $ | ( | $ | ( |
AgileThought, Inc. Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2022 and 2021 |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands USD, except share data) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net loss (income) | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Employee withholding taxes paid related to net share settlements | ( | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of public warrants | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2022 | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands USD, except share data) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||
AgileThought, Inc. Unaudited Condensed Consolidated Statements of Cash Flows |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Operating Activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||
Accretion of interest from convertible notes | |||||||||||
Gain on forgiveness of debt | ( | ( | |||||||||
Loss on debt extinguishment | |||||||||||
Provision for bad debt expense | ( | ||||||||||
Equity-based compensation | |||||||||||
Right-of-use asset amortization | |||||||||||
Foreign currency remeasurement | ( | ||||||||||
Deferred income tax provision | ( | ( | |||||||||
Obligations for contingent purchase price | |||||||||||
Embedded derivative liabilities | ( | ||||||||||
Warrant liability | |||||||||||
Amortization of debt issue costs | |||||||||||
Depreciation and amortization | |||||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Accounts payable | |||||||||||
Accrued liabilities | ( | ||||||||||
Deferred revenue | |||||||||||
Current VAT receivables and other taxes payable | ( | ||||||||||
Income taxes payable | ( | ( | |||||||||
Operating lease liabilities | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Investing activities | |||||||||||
Purchase of property, plant and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Repayments of borrowings | ( | ( | |||||||||
Proceeds from issuance of preferred shares | |||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rates on cash | ( | ( | |||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of the period | |||||||||||
Cash, cash equivalents and restricted cash at end of the period (1) | $ | $ | |||||||||
__________ | |||||||||||
(1) Amount of restricted cash at end of period | $ | $ | |||||||||
AgileThought, Inc. Notes to Unaudited Condensed Consolidated Financial Statements |
(in thousands USD) | Business Combination | ||||
Cash - LIVK trust and cash, net of redemptions | $ | ||||
Cash - PIPE Financing | |||||
Less: Transaction costs | ( | ||||
Net proceeds from the Business Combination | |||||
Less: Initial fair value of warrant liabilities recognized in the Business Combination | ( | ||||
Equity classification of Public Warrants | |||||
Surrender of related party receivables | ( | ||||
Debt conversion | |||||
Conversion of mezzanine equity(a) | |||||
Net adjustment to total equity from the Business Combination | $ |
Number of Shares | |||||
Class A ordinary shares of LIVK outstanding prior to the Business Combination | |||||
Less: redemption of LIVK's Class A ordinary shares | ( | ||||
Shares of LIVK's Class A ordinary shares | |||||
Shares held by LIVK's sponsor and its affiliates | |||||
Shares issued in the PIPE Financing | |||||
Shares issued to convert Legacy AgileThought's preferred stock to Class A common stock | |||||
Shares issued to Legacy AgileThought's common stock holders | |||||
Total shares of Class A common stock immediately after the Business Combination |
Fair Value Hierarchy Level | March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||
(in thousands USD) | Carry Amount | Fair Value | Carry Amount | Fair Value | |||||||||||||||||||||||||
Bank credit agreement | Level 3 | $ | $ | $ | $ | ||||||||||||||||||||||||
New Second Lien Facility | Level 3 |
(in thousands USD) | Contingent Purchase Price | ||||
Opening balance, December 31, 2021 | $ | ||||
Cash payments | |||||
Accrued interest on the contingent consideration | |||||
Effect of exchange rate fluctuations | |||||
Ending balance, March 31, 2022 | |||||
Less: Current portion | |||||
Obligation for contingent purchase price, net of current portion | $ |
(in thousands USD) | Private Placement Warrants | ||||
Beginning balance, January 1, 2022 | $ | ||||
Change in valuation inputs and other assumptions | |||||
Ending balance, March 31, 2022 | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Accounts receivables | $ | $ | |||||||||
Unbilled accounts receivables | |||||||||||
Other receivables | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Total accounts receivable, net | $ | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Income tax receivables | $ | $ | |||||||||
Prepaid expenses and other current assets | |||||||||||
Total prepaid expenses and other current assets | $ | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Accrued wages, vacation & other employee related items | $ | $ | |||||||||
Accrued interest | |||||||||||
Accrued incentive compensation | |||||||||||
Receipts not vouchered | |||||||||||
Accrued liabilities - Related Party | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Beginning balance, January 1 | $ | $ | |||||||||
Charges to expense | |||||||||||
Foreign currency translation | ( | ||||||||||
Ending balance | $ | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Computer equipment | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Furniture and equipment | |||||||||||
Computer software | |||||||||||
Transportation equipment | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
(in thousands USD) | LATAM | USA | Total | ||||||||||||||
December 31, 2021 | $ | $ | $ | ||||||||||||||
Foreign currency translation | |||||||||||||||||
March 31, 2022 | $ | $ | $ |
As of March 31, 2022 | |||||||||||||||||||||||||||||
(in thousands USD) | Gross Carrying Amount | Currency Translation Adjustment | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life (Years) | ||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | ( | ||||||||||||||||||||||||
Tradename | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
As of December 31, 2021 | |||||||||||||||||||||||||||||
(in thousands USD) | Gross Carrying Amount | Currency Translation Adjustment | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life (Years) | ||||||||||||||||||||||||
Customer relationships | $ | $ | ( | ( | $ | ||||||||||||||||||||||||
Tradename | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
Borrowings under bank revolving credit agreement, principal due Nov. 10, 2023 | $ | $ | |||||||||
Borrowings under bank credit agreement, principal due Nov. 10, 2023 | |||||||||||
Unamortized debt issuance costs and debt premium(a) | ( | ||||||||||
Borrowing under bank credit agreements, net of unamortized debt issuance costs | |||||||||||
Paycheck Protection Program loans, | |||||||||||
Subordinated promissory note payable with a related party, | |||||||||||
Subordinated debt, guaranteed by a related party, principal due July 26, 2022 | |||||||||||
Unamortized debt issuance costs(a) | ( | ( | |||||||||
Subordinated debt, guaranteed by a related party, net of unamortized debt issuance costs | |||||||||||
Borrowings under convertible note payable with a related party, | |||||||||||
Borrowings under convertible note payable with a related party, | |||||||||||
Unamortized debt issuance costs(a) | ( | ( | |||||||||
New Second Lien Facility, net of unamortized debt issuance costs | |||||||||||
Total debt | |||||||||||
Less: current portion of debt | |||||||||||
Long-term debt, net of unamortized debt issuance costs and current portion | $ | $ |
Computation Period Ending | Capital Expenditure Annual Limit | |||||||
March 31, 2022 Computation Periods ending June 30 and September 30, 2022 | $ | million | ||||||
December 31, 2022 and each Computation Period ending thereafter | $ | million |
Computation Period Ending | Fixed Charge Coverage Ratio to exceed | Total Leverage Ratio not to exceed | ||||||||||||
March 31, 2022 | Not Tested | |||||||||||||
June 30, 2022 and September 30, 2022 | ||||||||||||||
December 31, 2022 and each Computation Period ending thereafter |
Computation Period Ending | Fixed Charge Coverage Ratio to exceed | Total Leverage Ratio not to exceed | ||||||||||||
March 31, 2022 | Not Tested | |||||||||||||
June 30, 2022 and September 30, 2022 | ||||||||||||||
December 31, 2022 and each Computation Period ending thereafter |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Foreign exchange gain (loss) | $ | $ | ( | ||||||||
Forgiveness of PPP loans | |||||||||||
Other interest (expense) income | ( | ||||||||||
Other non-operating expense | ( | ( | |||||||||
Total other income (expense) | $ | $ | ( |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Income tax expense (benefit) | $ | $ | ( | ||||||||
Effective tax rates | ( | %) | % |
(in thousands USD) | Timing of Revenue Recognition | Three Months Ended March 31, | |||||||||||||||
Revenues by Contract Type | 2022 | 2021 | |||||||||||||||
Time and materials | over time | $ | $ | ||||||||||||||
Fixed price | over time | ||||||||||||||||
Total | $ | $ |
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
United States | $ | $ | |||||||||
Latin America | |||||||||||
Total | $ | $ |
(in thousands USD) | March 31, 2022 | December 31, 2021 | |||||||||
United States | $ | $ | |||||||||
Latin America | |||||||||||
Total long-lived assets | $ | $ |
(in thousands USD) | Organization Restructuring | ||||
Balance as of December 31, 2021 | $ | ||||
Restructuring charges | |||||
Payments | ( | ||||
Balance as of March 31, 2022 | $ |
Three Months Ended March 31, | |||||||||||
(in thousands USD, except share and loss per share data) | 2022 | 2021 | |||||||||
Net loss attributable to common stockholders - basic and diluted | $ | ( | $ | ( | |||||||
Weighted average number of common stock - basic and diluted | |||||||||||
Net loss per common stock - basic and diluted | $ | ( | $ | ( |
March 31, | |||||||||||
2022 | 2021 | ||||||||||
Public and private warrants | |||||||||||
Class A common stock held by administrative agent with restricted resale rights | |||||||||||
Unvested 2021 Plan awards for Class A shares with a service condition | |||||||||||
Unvested 2021 Plan awards for Class A shares with a service and market condition | |||||||||||
Unvested stock based compensation awards for Class A common stock with service and performance vesting conditions | |||||||||||
Unvested stock based compensation awards for Class A shares upon occurrence of liquidity event |
Number of Awards | Weighted Average Grant Date Fair Value | ||||||||||
Awards outstanding as of December 31, 2021 | $ | ||||||||||
Granted | |||||||||||
Forfeited / cancelled | ( | ||||||||||
Vested | ( | ||||||||||
Awards outstanding as of March 31, 2022 | $ | ||||||||||
Vested awards as of March 31, 2022 | $ | ||||||||||
Unvested awards as of March 31, 2022 | $ |
(in thousands USD) | Three Months Ended March 31, | ||||||||||
Supplemental disclosure of non-cash investing activities & cash flow information | 2022 | 2021 | |||||||||
Forgiveness of loans | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease liabilities | |||||||||||
Cash paid during the period for interest | |||||||||||
Fees due to creditor |
As of March 31, | As of December 31, | |||||||||||||||||||
Employees by Geography | 2022 | 2021 | 2021 | |||||||||||||||||
United States | 310 | 382 | 355 | |||||||||||||||||
Latin America | 2,320 | 1,941 | 2,315 | |||||||||||||||||
Total | 2,630 | 2,323 | 2,670 |
Three Months Ended March 31, | ||||||||||||||
Revenue by Geography (in thousands) | 2022 | 2021 | ||||||||||||
United States | $ | 28,998 | $ | 24,520 | ||||||||||
Latin America | 15,226 | 12,693 | ||||||||||||
Total | $ | 44,224 | $ | 37,213 |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||
Loss before income taxes | $ | (6,047) | $ | (4,443) | ||||||||||
Percent of Revenue for the Three Months Ended March 31, 2022 | ||||||||||||||
Client Concentration | 2022 | 2021 | ||||||||||||
Top client | 12.4 | % | 13.3 | % | ||||||||||
Top five clients | 42.4 | % | 49.3 | % | ||||||||||
Top ten clients | 61.5 | % | 68.6 | % | ||||||||||
Top twenty clients | 78.5 | % | 82.4 | % |
Twelve Months Ended March 31, 2022 | ||||||||||||||
Active Clients by Revenue | 2022 | 2021 | ||||||||||||
Over $5 Million | 9 | 6 | ||||||||||||
$2 – $5 Million | 9 | 9 | ||||||||||||
$1 – $2 Million | 11 | 12 | ||||||||||||
Less than $1 Million | 151 | 205 | ||||||||||||
Total | 180 | 232 |
Greater than $1 million | 29 | 27 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Gross Profit Margin | 31.3 | % | 29.5 | % | |||||||
Adjusted EBITDA (in thousands) | $ | 1,053 | $ | 1,927 | |||||||
Number of large active clients (at or above $1.0 million of revenue in prior 12-month period) as of end of period | 29 | 27 | |||||||||
Revenue concentration with top 10 clients as of end of period | 61.5 | % | 68.6 | % |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Net revenues | $ | 44,224 | $ | 37,213 | |||||||
Cost of revenue | 30,400 | 26,231 | |||||||||
Gross profit | 13,824 | 10,982 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 12,619 | 8,768 | |||||||||
Depreciation and amortization | 1,754 | 1,774 | |||||||||
Change in fair value of embedded derivative liabilities | — | (1,410) | |||||||||
Change in fair value of warrant liability | 478 | — | |||||||||
Loss on debt extinguishment | 7,136 | — | |||||||||
Equity-based compensation expense | 518 | 12 | |||||||||
Restructuring expenses | 753 | 10 | |||||||||
Other operating expenses, net | 621 | 635 | |||||||||
Total operating expenses | 23,879 | 9,789 | |||||||||
(Loss) income from operations | (10,055) | 1,193 | |||||||||
Interest expense | (3,313) | (4,328) | |||||||||
Other income (expense) | 7,321 | (1,308) | |||||||||
Loss before income tax | (6,047) | (4,443) | |||||||||
Income tax expense (benefit) | 251 | (608) | |||||||||
Net loss | (6,298) | (3,835) | |||||||||
Net loss attributable to noncontrolling interests | 49 | 30 | |||||||||
Net loss attributable to the Company | $ | (6,347) | $ | (3,865) |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net revenues | 100.0 | % | 100.0 | % | |||||||
Cost of revenue | 68.7 | % | 70.5 | % | |||||||
Gross profit | 31.3 | % | 29.5 | % | |||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 28.5 | % | 23.6 | % | |||||||
Depreciation and amortization | 4.0 | % | 4.8 | % | |||||||
Change in fair value of embedded derivative liabilities | — | % | (3.8) | % | |||||||
Change in fair value of warrant liability | 1.1 | % | — | % | |||||||
Loss on debt extinguishment | 16.1 | % | — | % | |||||||
Equity-based compensation expense | 1.2 | % | — | % | |||||||
Restructuring expenses | 1.7 | % | — | % | |||||||
Other operating expenses, net | 1.4 | % | 1.7 | % | |||||||
Total operating expenses | 54.0 | % | 26.3 | % | |||||||
(Loss) income from operations | (22.7) | % | 3.2 | % | |||||||
Interest expense | (7.5) | % | (11.6) | % | |||||||
Other income (expense) | 16.6 | % | (3.5) | % |
Loss before income tax | (13.7) | % | (11.9) | % | |||||||
Income tax expense (benefit) | 0.6 | % | (1.6) | % | |||||||
Net loss | (14.2) | % | (10.3) | % | |||||||
Net loss attributable to noncontrolling interests | 0.1 | % | 0.1 | % | |||||||
Net loss attributable to the Company | (14.4) | % | (10.4) | % |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands USD) | Mar 31 | Dec 31 | Sep 30 | June 30 | Mar 31 | Dec 31 | Sep 30 | June 30 | ||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 44,224 | $ | 42,095 | $ | 40,420 | $ | 38,940 | $ | 37,213 | $ | 34,474 | $ | 40,114 | $ | 42,742 | ||||||||||||||||||||||||||||||||||
Cost of revenue | 30,400 | 29,594 | 29,666 | 26,812 | 26,231 | 25,615 | 26,018 | 28,059 | ||||||||||||||||||||||||||||||||||||||||||
Gross profit | 13,824 | 12,501 | 10,754 | 12,128 | 10,982 | 8,859 | 14,096 | 14,683 | ||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 12,619 | 13,406 | 11,188 | 10,189 | 8,768 | 8,552 | 8,978 | 6,412 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,754 | 1,745 | 1,746 | 1,719 | 1,774 | 1,705 | 1,709 | 1,700 | ||||||||||||||||||||||||||||||||||||||||||
Change in fair value of contingent consideration obligations | — | — | — | (2,200) | — | (554) | (555) | (5,491) | ||||||||||||||||||||||||||||||||||||||||||
Change in fair value of embedded derivative liabilities | — | — | (1,884) | (1,112) | (1,410) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Change in fair value of warrant liabilities | 478 | (3,935) | (759) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Loss on debt extinguishment | 7,136 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | 518 | — | 6,469 | — | 12 | 31 | 55 | 56 | ||||||||||||||||||||||||||||||||||||||||||
Impairment charges | — | — | — | — | — | — | 7,565 | 9,134 | ||||||||||||||||||||||||||||||||||||||||||
Restructuring expenses (income) | 753 | 1,024 | (135) | 12 | 10 | 2,965 | 1,084 | 1,097 | ||||||||||||||||||||||||||||||||||||||||||
Other operating expenses (income), net | 621 | 774 | (96) | 472 | 635 | 3,293 | 3,205 | 212 | ||||||||||||||||||||||||||||||||||||||||||
Total operating expense | 23,879 | 13,014 | 16,529 | 9,080 | 9,789 | 15,992 | 22,041 | 13,120 | ||||||||||||||||||||||||||||||||||||||||||
(Loss) income from operations | (10,055) | (513) | (5,775) | 3,048 | 1,193 | (7,133) | (7,945) | 1,563 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | (3,313) | (4,340) | (4,065) | (3,724) | (4,328) | (4,490) | (4,400) | (3,984) | ||||||||||||||||||||||||||||||||||||||||||
Other income (expense) | 7,321 | (648) | (851) | 1,723 | (1,308) | 4,855 | 3,002 | 2,748 | ||||||||||||||||||||||||||||||||||||||||||
(Loss) Income before income taxes | (6,047) | (5,501) | (10,691) | 1,047 | (4,443) | (6,768) | (9,343) | 327 | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | $ | 251 | $ | 473 | $ | 96 | $ | 499 | $ | (608) | $ | (119) | $ | 1,012 | $ | 1,343 | ||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (6,298) | $ | (5,974) | $ | (10,787) | $ | 548 | $ | (3,835) | $ | (6,649) | $ | (10,355) | $ | (1,016) |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
(in thousands USD) | Mar 31 | Dec 31 | Sep 30 | June 30 | Mar 31 | Dec 31 | Sep 30 | June 30 | |||||||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (6,298) | $ | (5,974) | $ | (10,787) | $ | 548 | $ | (3,835) | $ | (6,649) | $ | (10,355) | $ | (1,016) | |||||||||||||||||||||||||||||||
Income tax expense (benefit) | 251 | 473 | 96 | 499 | (608) | (119) | 1,012 | 1,343 | |||||||||||||||||||||||||||||||||||||||
Interest expense, net | 3,308 | 4,336 | 4,045 | 3,701 | 4,305 | 4,463 | 4,365 | 3,959 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,754 | 1,745 | 1,746 | 1,719 | 1,774 | 1,705 | 1,709 | 1,700 | |||||||||||||||||||||||||||||||||||||||
EBITDA | (985) | 580 | (4,900) | 6,467 | 1,636 | (600) | (3,269) | 5,986 | |||||||||||||||||||||||||||||||||||||||
Change in fair value of contingent consideration obligations | — | — | — | (2,200) | — | (554) | (555) | (5,491) | |||||||||||||||||||||||||||||||||||||||
Change in fair value of embedded derivative liabilities | — | — | (1,884) | (1,112) | (1,410) | — | — | — | |||||||||||||||||||||||||||||||||||||||
Change in fair value of warrant liabilities | 478 | (3,935) | (759) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | 518 | — | 6,469 | — | 12 | 31 | 55 | 56 | |||||||||||||||||||||||||||||||||||||||
Impairment charges | — | — | — | — | — | — | 7,565 | 9,134 | |||||||||||||||||||||||||||||||||||||||
Restructuring expenses (income) | 753 | 1,024 | (135) | 12 | 10 | 2,965 | 1,084 | 1,097 | |||||||||||||||||||||||||||||||||||||||
Foreign exchange (gain) loss | (252) | 406 | 790 | (596) | 1,336 | (4,886) | (3,109) | (1,698) | |||||||||||||||||||||||||||||||||||||||
Loss (gain) on business dispositions | — | — | — | — | — | 271 | (129) | (1,252) | |||||||||||||||||||||||||||||||||||||||
Gain on debt extinguishment | (144) | — | — | (1,243) | (63) | (142) | — | — | |||||||||||||||||||||||||||||||||||||||
Transaction Costs | 9 | 716 | (177) | 467 | 328 | 3,557 | 2,579 | 210 | |||||||||||||||||||||||||||||||||||||||
Other expenses, net | 676 | 1,492 | (1) | (1) | 78 | 80 | (16) | (20) | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 1,053 | $ | 283 | $ | (597) | $ | 1,794 | $ | 1,927 | $ | 722 | $ | 4,205 | $ | 8,022 |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Net Revenues | $ | 44,224 | $ | 37,213 | 18.8 | % | |||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
United States | $ | 28,998 | $ | 24,520 | 18.3 | % | |||||||||||
Latin America | 15,226 | 12,693 | 20.0 | % | |||||||||||||
Total | $ | 44,224 | $ | 37,213 | 18.8 | % | |||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Time and materials | $ | 33,251 | $ | 30,541 | 8.9 | % | |||||||||||
Fixed price | 10,973 | 6,672 | 64.5 | % | |||||||||||||
Total | $ | 44,224 | $ | 37,213 | 18.8 | % | |||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Cost of revenue | $ | 30,400 | $ | 26,231 | 15.9 | % | |||||||||||
% of net revenues | 68.7 | % | 70.5 | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Selling, general and administrative expenses | $ | 12,619 | $ | 8,768 | 43.9 | % | |||||||||||
% of net revenues | 28.5 | % | 23.6 | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Depreciation and amortization | $ | 1,754 | $ | 1,774 | (1.1) | % | |||||||||||
% of net revenues | 4.0 | % | 4.8 | % |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Change in fair value of embedded derivative liabilities | $ | — | $ | (1,410) | (100.0) | % | |||||||||||
% of net revenues | — | % | (3.8) | % |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Change in fair value of warrant liability | $ | 478 | $ | — | 100.0 | % | |||||||||||
% of net revenues | 1.1 | % | — | % |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Loss on debt extinguishment | $ | 7,136 | $ | — | 100.0 | % | |||||||||||
% of net revenues | 16.1 | % | — | % |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Equity-based compensation expense | $ | 518 | $ | 12 | >1000.0 | % | |||||||||||
% of net revenues | 1.2 | % | — | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Restructuring expenses | $ | 753 | $ | 10 | >1000.0 | % | |||||||||||
% of net revenues | 1.7 | % | — | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Other operating expense, net | $ | 621 | $ | 635 | (2.2) | % | |||||||||||
% of net revenues | 1.4 | % | 1.7 | % |
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Interest expense | $ | (3,313) | $ | (4,328) | (23.5) | % | |||||||||||
% of net revenues | (7.5) | % | (11.6) | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Other income (expense) | $ | 7,321 | $ | (1,308) | (659.7) | % | |||||||||||
% of net revenues | 16.6 | % | (3.5) | % | |||||||||||||
Three Months Ended March 31, | % Change | ||||||||||||||||
2022 | 2021 | 2022 vs. 2021 | |||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Income tax expense (benefit) | $ | 251 | $ | (608) | (141.3) | % | |||||||||||
Effective income tax rate | (4.2) | % | 13.7 | % | |||||||||||||
Three Months Ended March 31, | |||||||||||
(in thousands USD) | 2022 | 2021 | |||||||||
Net loss | $ | (6,298) | $ | (3,835) | |||||||
Income tax expense (benefit) | 251 | (608) | |||||||||
Interest expense, net | 3,308 | 4,305 | |||||||||
Depreciation and amortization | 1,754 | 1,774 | |||||||||
EBITDA | (985) | 1,636 | |||||||||
Change in fair value of embedded derivative liability | — | (1,410) | |||||||||
Change in fair value of warrant liability | 478 | — | |||||||||
Equity-based compensation expense | 518 | 12 | |||||||||
Restructuring expenses1 | 753 | 10 | |||||||||
Foreign exchange (gain) loss2 | (252) | 1,336 | |||||||||
Gain on debt extinguishment3 | (144) | (63) | |||||||||
Transaction costs | 9 | 328 | |||||||||
Other expense, net4 | 676 | 78 | |||||||||
Adjusted EBITDA | $ | 1,053 | $ | 1,927 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net cash used in operating activities | $ | (5,111) | $ | (4,400) | |||||||
Net cash used in investing activities | (83) | (229) | |||||||||
Net cash used in financing activities | (669) | (2,004) | |||||||||
Payments Due By Period | |||||||||||||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Debt obligations | $ | 65,451 | $ | 11,282 | $ | 54,169 | $ | — | $ | — | |||||||||||||||||||
Operating lease obligations | 6,420 | 2,227 | 3,904 | 289 | — | ||||||||||||||||||||||||
Total | $ | 71,871 | $ | 13,509 | $ | 58,073 | $ | 289 | $ | — |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104* | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
+ | The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. | |||||||
# | Indicates management contract or compensatory plan or arrangement. | |||||||
* | Filed Herewith | |||||||
** | Furnished Herewith |
AGILETHOUGHT, INC. | ||||||||
By: | /s/ Amit Singh | |||||||
Amit Singh | ||||||||
Chief Financial Officer |
By: | /s/ Manuel Senderos Fernandez | |||||||
Manuel Senderos Fernandez | ||||||||
Chief Executive Officer |
By: | /s/ Amit Singh | |||||||
Amit Singh | ||||||||
Chief Financial Officer |
By: | /s/ Manuel Senderos Fernandez | |||||||
Manuel Senderos Fernandez | ||||||||
Chief Executive Officer |
By: | /s/ Amit Singh | |||||||
Amit Singh | ||||||||
Chief Financial Officer |
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Stockholders' Equity | ||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 210,000,000 | 210,000,000 |
Common stock issued (in shares) | 50,473,423 | 50,402,763 |
Treasury stock (in shares) | 198,740 | 181,381 |
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (6,298) | $ (3,835) |
Actuarial loss | 4 | 0 |
Foreign currency translation adjustments | 341 | (218) |
Comprehensive loss | (5,953) | (4,053) |
Less: Comprehensive income attributable to noncontrolling interests | 46 | 35 |
Comprehensive loss attributable to the Company | $ (5,999) | $ (4,088) |
Organization and Basis of Consolidation and Presentation |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Consolidation and Presentation | Organization and Basis of Consolidation and Presentation Organization AgileThought, Inc. (“AgileThought”) is a global provider of agile-first, end-to-end digital transformation services in the North American market using on-shore and near-shore delivery. The Company’s headquarters is in Irving, Texas. AgileThought’s Class A common stock is listed on the NASDAQ Capital Market (“NASDAQ”) under the symbol “AGIL.” On August 23, 2021 (the “Closing Date”), LIV Capital Acquisition Corp. (“LIVK”), a special purpose acquisition company, and AgileThought (“Legacy AgileThought”) consummated the transactions contemplated by the definitive agreement and plan of merger (“Merger Agreement”), dated May 9, 2021 (“Business Combination”). Pursuant to the terms, Legacy AgileThought merged with and into LIVK, whereupon the separate corporate existence of Legacy AgileThought ceased, with LIVK surviving such merger (the “Surviving Company”). On the Closing Date, the Surviving Company changed its name to AgileThought, Inc. (the “Company”, “AgileThought”, “we” or “us”). Basis of Consolidation and Presentation The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). For interim financial reporting not all disclosures normally required in annual Consolidated Financial Statements prepared in accordance with U.S. GAAP are required. The Business Combination was accounted for as a reverse capitalization in accordance with U.S. GAAP (the “Recapitalization”). Under this method of accounting, LIVK is treated as the acquired company and Legacy AgileThought is treated as the accounting acquirer for financial reporting purposes, resulting in no change in the carrying amount of the Company's assets and liabilities. The consolidated assets, liabilities and results of operations prior to the Recapitalization are those of Legacy AgileThought. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination. In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of normal and recurring nature, have been made for the interim periods reported. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. The balance sheet as of December 31, 2021 has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2021 that are included in our annual report on Form 10-K filed with the SEC on March 31, 2022 ("Annual Report"). All intercompany transactions and balances have been eliminated in consolidation. The ownership interest of noncontrolling investors of the Company's subsidiaries are recorded as noncontrolling interest. The Company evaluated subsequent events, if any, that would require an adjustment to the Company's Unaudited Condensed Consolidated Financial Statements or require disclosure in the notes to the Unaudited Condensed Consolidated Financial Statements through the date of issuance of the condensed consolidated financial statements. Where applicable, the notes to these Unaudited Condensed Consolidated Financial Statements have been updated to discuss all significant subsequent events which have occurred.
|
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Refer to Note 2, Summary of Significant Accounting Policies, within our annual Consolidated Financial Statements included in our Annual Report for the full listing of significant accounting policies. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements. Further, certain estimates and assumptions include the direct and indirect impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations. We make significant estimates with respect to intangible assets, goodwill, depreciation, amortization, income taxes, equity-based compensation, contingencies, fair value of assets and liabilities acquired, obligations related to contingent consideration in connection with business combinations, fair value of embedded derivative liabilities, and fair value of warrant liability. The economic impact of the pandemic on the Company’s business depends on its severity and duration, which in turn depend on highly uncertain factors such as the nature and extent of containment efforts, the spread and effects of variants, and the timing and efficacy of vaccines. The high level of uncertainty regarding this economic impact means that management’s estimates and assumptions are subject to change as the situation develops and new information becomes available. To the extent the actual results differ materially from these estimates and assumptions, the Company’s future financial statements could be materially affected. Fair Value Measurements The Company records fair value of assets and liabilities in accordance with Financial Accounting Standards Board’s (“FASB”) Account Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. ASC 820 includes disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reporting in one of three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are as follows: Level 1:Quoted prices for identical instruments in active markets. Level 2:Other valuations that include quoted prices for similar instruments in active markets that are directly or indirectly observable. Level 3:Valuations made through techniques in which one or more of its significant data are not observable. Goodwill Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased and is allocated to a reporting unit when the acquired business is integrated into the Company. Goodwill is not amortized but is tested for impairment annually on October 1st. The Company will also perform an assessment whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may be more than its recoverable amount. Under FASB guidance, management may first assess certain qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. When needed, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the quantitative test, we compare the fair value of the reporting unit with the respective carrying value. Management uses a combined income and public company market approach to estimate the fair value of each reporting unit. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit. This analysis requires significant assumptions, such as estimated future cash flows, long-term growth rate estimates, weighted average cost of capital, and market multiples. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. Intangible Assets The Company has customer relationships (finite-lived intangible assets) and trade names (finite-lived and indefinite-lived intangible assets) on its Unaudited Condensed Consolidated Balance Sheets. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed. We test for impairment when events or circumstances indicate the carrying value of a finite-lived intangible asset may not be recoverable. Consistent with other long-lived assets, if the carrying value is not determined to be recoverable, we calculate an impairment loss based on the excess of the asset’s carrying value over its fair value. The fair value is determined using the discounted cash flow approach of multi-period excess earnings. During the first quarter of 2021, the Company reassessed and changed the estimated economic life of a certain trade name from indefinite to finite-lived as a result of the shift in operations towards a global strategy as “One AgileThought.” As a result, the Company began amortizing a certain trade name using straight-line method over their average remaining economic life of five years. Indefinite-lived intangible assets are not amortized but are instead assessed for impairment annually on October 1st and as needed whenever events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An impairment loss is recognized if the asset’s carrying value exceeds its fair value. The Company uses the relief from royalty method to determine the fair value of its indefinite-lived intangible assets. Refer to Note 7, Goodwill and Intangible Assets, Net, for additional information. Embedded Derivative Liabilities The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company has evaluated the terms and features of its redeemable convertible preferred stock issued in February 2021 and identified two embedded derivatives requiring bifurcation from the underlying host instrument pursuant to ASC 815-15, Embedded Derivatives. Embedded derivatives met the criteria for bifurcation due to the instruments containing conversion options and mandatory redemption features that are not clearly and closely related to the host instrument. Embedded derivatives are bifurcated from the underlying host instrument and accounted for as separate financial instruments. Embedded derivatives are recognized at fair value, with changes in fair value during the period are recognized in "Change in fair value of embedded derivative liabilities" in the Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022 and in connection with the consummation of the Business Combination that occurred on August 23, 2021, the preferred stock was converted into common stock of the Company and the Embedded derivative ceased to exist. Refer to Note 4, Fair Value Measurements, for additional information. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded as liabilities. At the end of each reporting period, changes in fair value during the period are recognized in “Change in fair value of warrant liability” in the Company’s Unaudited Condensed Consolidated Statements of Operations. The Company will continue to adjust the warrant liability for changes in the fair value until the earlier of a) the exercise or expiration of the warrants or b) the redemption of the warrants. Our public warrants meet the criteria for equity classification and accordingly, are reported as a component of stockholders’ equity while our private warrants do not meet the criteria for equity classification and are thus classified as a liability. Accounting Pronouncements The authoritative bodies release standards and guidance, which are assessed by management for impact on the Company’s Unaudited Condensed Consolidated Financial Statements. Accounting Standards Updates (“ASUs”) not listed below were assessed and determined to be not applicable to the Company’s Unaudited Condensed Consolidated Financial Statements. The following standards were recently adopted by the Company: •In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform, that refined the scope of ASU No. 2020-04 and clarified some of its provisions. The amendments permit entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by the discounting transition. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities, including adoption in an interim period. This ASU was adopted by the Company during the second quarter of 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements. •In May 2021, the FASB issued ASU 2021-04, Earnings Per Share, Debt-Modifications and Extinguishments, Compensation-Stock Compensation, and Derivatives and Hedging-Contracts in Entity’s Own Equity. This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU is effective for fiscal years beginning after December 15, 2021 on a prospective basis. Early adoption is permitted for all entities, including adoption in an interim period. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements. •In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers. This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements.
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Business Combination |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination As discussed in Note 1, Organization and Basis of Consolidation and Presentation, the Company consummated the Business Combination on August 23, 2021, pursuant to the Merger Agreement dated May 9, 2021. In connection with the Business Combination, the following occurred: • On August 20, 2021, LIVK changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware by deregistering as an exempted company in the Cayman Islands and domesticating and continuing as a corporation formed under the laws of the State of Delaware. As a result, each of LIVK’s issued and outstanding Class A ordinary shares and Class B ordinary shares automatically converted by operation of law, on a one-for-one basis, into shares of Class A common stock. Similarly, all of LIVK’s outstanding warrants became warrants to acquire shares of Class A common Stock. •LIVK entered into subscription agreements with certain investors pursuant to which such investors collectively subscribed for 2,760,000 shares of the Company's Class A common stock at $10.00 per share for aggregate proceeds of $27,600,000 (the “PIPE Financing”). •Holders of 7,479,065 of LIVK’s Class A ordinary shares originally sold in LIVK's initial public offering, or 93% of the shares with redemption rights, exercised their right to redeem their shares for cash at a redemption price of approximately $10.07 per share, for an aggregate redemption amount of $75.3 million. •The Business Combination was effected through the merger of Legacy AgileThought with and into LIVK, whereupon the separate corporate existence of Legacy AgileThought ceased and LIVK was the surviving corporation. •On the Closing Date, the Company changed its name from LIV Capital Acquisition Corp. to AgileThought, Inc. •An aggregate of 34,557,480 shares of Class A common stock were issued to holders of Legacy AT common stock and 2,000,000 shares of Class A common stock were issued to holders of Legacy AT preferred stock as merger consideration. •After adjusting its embedded derivative liabilities to fair value, upon conversion of the preferred stock, the Company's embedded derivative liabilities were extinguished during the third quarter of 2021. Refer to Note 4, Fair Value Measurements, for additional information. •The Company's private placement warrants meet the criteria for liability classification. For additional information on our warrants, refer to Note 14, Warrants, and Note 4, Fair Value Measurements. The following table reconciles the elements of the Business Combination to the additional paid-in capital in the Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2021:
_________________ (a)Relates to the transfer from mezzanine equity to permanent equity of the preferred contribution received from LIV Capital on February 02, 2021, which was considered part of the PIPE financing and upon the transaction close, was reclassified to permanent equity of the Company. The number of shares of Class A common stock issued immediately following the consummation of the Business Combination:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The carrying amount of assets and liabilities including cash, cash equivalents, and restricted cash, accounts receivable and accounts payable approximated their fair value as of March 31, 2022, and December 31, 2021, due to the relative short maturity of these instruments. Long-term Debt Our debt is not actively traded and the fair value estimate is based on discounted estimated future cash flows or a fair value in-exchange assumption, which are significant unobservable inputs in the fair value hierarchy. As such, these estimates are classified as Level 3 in the fair value hierarchy. The following table summarizes our instruments where fair value differs from carrying value:
The above table excludes our revolving credit facility, subordinated promissory note payable and subordinated zero-coupon loan as these balances approximate fair value due to the short-term nature of our borrowings. The above table also excludes our Paycheck Protection Program loans (“PPP loans”) as the carrying value of the Company’s PPP loans approximates fair value based on the current yield for debt instruments with similar terms. Refer to Note 8, Long-term Debt, for additional information. Contingent Purchase Price The Company carries its obligations for contingent purchase price at fair value. The Company recorded the acquisition-date fair value of these contingent liabilities based on the likelihood of contingent earn-out payments and stock issuances subject to the underlying agreement terms. This estimate is classified as Level 3 in the fair value hierarchy. The significant unobservable inputs used in the fair value of the Company’s obligation for contingent purchase price was the discount rate, growth assumptions, and earnings thresholds. After December 31, 2021, the Company subsequently adjusted its contingent purchase price obligation based on payments, accrued interest and exchange rate fluctuations. The following table provides a roll-forward of the obligations for contingent purchase price:
Warrant Liability As of March 31, 2022, the Company has private placement warrants, which are liability classified, as discussed in Note 14, Warrants. The Company's private placement warrants are classified as Level 3 of the fair value hierarchy due to use of significant inputs that are unobservable in the market. Private placement warrants are fair valued using the Black-Scholes model, which require a risk-free rate assumption based upon constant-maturity treasury yields. Other significant inputs and assumptions in the model are the stock price, exercise price, volatility, and term or maturity. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. The following table presents the changes in the fair value of private warrant liability at March 31, 2022:
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Balance Sheet Details |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details | Balance Sheet Details The following table provides detail of selected balance sheet items:
The following table is a rollforward of the allowance for doubtful accounts:
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consist of the following:
Depreciation expense was $0.2 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. The Company did not recognize any impairment expense related to property and equipment for the three months ended March 31, 2022 or 2021.
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Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The Company performs an assessment each year to test goodwill and indefinite-lived intangible assets for impairment, or more frequently in certain circumstances where impairment indicators arise. The following table presents changes in the goodwill balances as of March 31, 2022:
Summary of our finite-lived intangible assets is as follows:
In 2021, the Company changed the estimated life of a certain tradenames from indefinite to finite-lived and began amortizing it over the average remaining economic life of five years (See Note 2, Summary of Significant Accounting Policies). No impairment charges were recognized related to finite-lived intangible assets during the three months ended March 31, 2022 and 2021. The Company’s indefinite-lived intangible assets relate to trade names acquired in connection with business combinations. The trade names balance was $16.4 million and $16.3 million as of March 31, 2021 and December 31, 2021, respectively. No impairment charges were recognized related to infinite-lived intangible assets during the three months ended March 31, 2022 and 2021.
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Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Long-term debt as of March 31, 2022 and December 31, 2021 consists of the following:
_________________ (a)Debt issuance costs are presented as a reduction of the Company’s debt in the Unaudited Condensed Consolidated Balance Sheets. $0.4 million and $0.3 million of debt issuance cost amortization was charged to interest expense for the three months ended March 31, 2022 and 2021. Debt premium of $0.7 million was recognized upon extinguishment of debt and is presented as an addition to the Company's debt in the Unaudited Condensed Consolidated Balance Sheet. Credit Agreements In 2018, the Company entered into a revolving credit agreement with Monroe Capital Management Advisors LLC that permits the Company to borrow up to $1.5 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing limit to $5.0 million. Interest is paid monthly and calculated as LIBOR plus a margin of 8.0% to 9.0%, based on the Total Leverage Ratio as calculated in the most recent Compliance Certificate. An additional 2.0% interest may be incurred during periods of loan covenant default. At March 31, 2022, the interest rate was 10.0%. The Company must pay an annual commitment fee of 0.5% on the unused portion of the commitment. At March 31, 2022 and December 31, 2021, the Company had no availability under this facility. In 2018, the Company entered into a term loan credit agreement with Monroe Capital Management Advisors LLC (“First Lien Facility”) that permits the Company to borrow up to $75.0 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing amount to $98.0 million. Interest is paid monthly and calculated as LIBOR plus a margin of 8.0% to 9.0%, based on the Total Leverage Ratio as calculated in the most recent Compliance Certificate. An additional 2.0% interest may be incurred during periods of loan covenant default. At March 31, 2022, the interest rate was 10.0%. Principal payments of $0.6 million are due quarterly until maturity, at which time the remaining outstanding balance is due. Based on amendment dated February 2, 2021, the Company shall pay, in place of the first two regular quarterly principal installments of 2021, from February 2021 through and including July 2021, monthly principal installments of $1.0 million on the last business day of each of these six calendar months. On March 22, 2021, the Company used $20.0 million from proceeds of issuance of preferred stock to partially pay the First Lien Facility. Refer to Note 15, Stockholders’ Equity, for additional information on issuance of preferred stock. On June 24, 2021, an amendment was signed to modify the debt covenants for the periods June 30, 2021 and thereafter. In addition to the covenant modifications, the amendment also established the deferral of the monthly $1.0 million principal payments previously due in April and May, along with the $1.0 million payments due in June and July to September 30, 2021. As a result, the regular quarterly principal installments resumed, and the First Lien lenders charged a $4.0 million fee paid upon the end of the term loan in exchange for the amended terms. The amendment resulted in a debt modification, thus the fees payable to the First Lien lenders were capitalized and were being amortized over the remaining life of the First Lien Facility. On September 30, 2021, the Company entered into an amendment to extend the due date of the $4.0 million in principal payments previously due for April, May, June and July, from September 30, 2021 to October 15, 2021. On October 14, 2021, the Company entered into an amendment to extend the due date from October 15, 2021 to October 29, 2021. On October 29, 2021, the Company entered into an amendment to further extend the due date from October 29, 2021 to November 19, 2021. On November 15, 2021, the Company entered into an amendment to reset the First Lien Facility’s Total Leverage Ratio and Fixed Charge Coverage Ratio covenants for the quarterly periods of September 30, 2021 to December 31, 2022. On November 29, 2021, the Company made a $20.0 million principal prepayment, which included the $4.0 million principal payment that was originally due September 30, 2021. The Company made this payment with proceeds from the New Second Lien Facility (defined below). Furthermore, on December 29, 2021, the Company issued 4,439,333 shares of Class A Common Stock to the administrative agent for the First Lien Facility (the “First Lien Shares”), which subject to certain terms and regulatory restrictions, may sell the First Lien Shares upon the earlier of August 29, 2022 and an event of default and apply the proceeds to the outstanding balance of the loan. Subject to regulatory restrictions, the Company may issue additional First Lien Shares from time to time to reduce the amount of debt for purposes of the Total Leverage Ratio to the extent necessary to comply with such financial ratio. In addition, the Company agreed to issue warrants to the administrative agent to purchase $7.0 million worth of the Company’s Class A Common Stock for nominal consideration. The warrants will be issued on the date that all amounts under the First Lien Facility have been paid in full. In addition, the Company may be required to pay the First Lien lenders cash to the extent that we cannot issue some or all of the warrants due to regulatory restrictions. The First Lien lenders charged an additional $2.9 million fee paid upon the end of the term loan in exchange for the amended terms. On November 22, 2021, the Company entered into an amendment that requires sixty percent (60%) of proceeds from equity issuances be used to repay the outstanding balance on the First Lien Facility. On December 27, 2021, the Company closed a follow on stock offering resulting in $21.8 million of net proceeds, of which $13.7 million was used as payment of the outstanding principal and interest balances for the First Lien Facility. On March 30, 2022, the Company entered into an amendment with the First Lien and Second Lien Facility Lenders to waive the Fixed Charge Coverage Ratio for March 31, 2022. In addition, the Total Leverage Ratio covenant for the quarterly period of March 31, 2022 was reset. As consideration for entering into this amendment, the Company agreed to pay the First Lien Facility’s administrative agent a fee equal to $500,000. The fee shall be fully earned as of March 30, 2022 and shall be due and payable upon the end of the term loan. However, the fee shall be waived in its entirety if final payment in full occurs prior to or on May 30, 2022. This modification triggered by this new amendment was determined to be substantially different to the old instrument, therefore the modification was accounted for as an extinguishment and the debt instrument was adjusted to fair value as of the March 31, 2022. The Company recognized a loss on debt extinguishment of $7.1 million in the Unaudited Condensed Consolidated Statement of Operations. At March 31, 2022, total fees payable at the end of the term loan, including fees recognized from prior amendments, totaled $7.4 million. These fees are recognized in Other noncurrent liabilities in the Unaudited Condensed Consolidated Balance Sheet. Second Lien Facility On July 18, 2019, the Company entered into separate credit agreements with Nexxus Capital and Credit Suisse (“the Creditors”) that permits the Company to borrow $12.5 million from each bearing 13.73% interest. On January 31, 2020, the agreements were amended to increase the borrowing amount by $2.05 million under each agreement. Interest is capitalized every six months and is payable when the note is due. Immediately prior to the Business Combination, the Creditors exercised their option to convert their combined $38.1 million of debt outstanding (including interest) into 115,923 shares of the Company's Class A ordinary shares, which were converted into the Company's Class A common stock as a result of the Business Combination. Concurrently with the conversion, the Company amortized the remaining $0.1 million of unamortized debt issuance costs and recognized incremental interest expense in the Unaudited Condensed Consolidated Statements of Operations. New Second Lien Facility On November 22, 2021, the Company entered into a new Second Lien Facility (the “New Second Lien Facility”) with Nexxus Capital and Credit Suisse (both of which are existing AgileThought shareholders and have representation on AgileThought’s Board of Directors), Manuel Senderos, Chief Executive Officer and Chairman of the Board of Directors, and Kevin Johnston, Global Chief Operating Officer. The New Second Lien Facility provides for a term loan facility in an initial aggregate principal amount of approximately $20.7 million, accruing interest at a rate per annum from 11.00% for the US denominated loan and 17.41% for the Mexican Peso denominated Loan. The New Second Lien Facility has an original maturity date of March 15, 2023. If the First Lien Facility remains outstanding on December 15, 2022, the maturity date of the New Second Lien Facility will be extended to May 10, 2024. The New Second Lien Facility also includes an option for the Company to extend the maturity date an additional 18 months. The Company recognized $0.9 million in debt issuance costs with the issuance. Each lender under the New Second Lien Facility has the option to convert all or any portion of its outstanding loans into AgileThought Class A Common Stock on or after December 15, 2022 or earlier, upon our request, at a conversion price equal to the closing price of one share of our Class A Common Stock on the trading day immediately prior to the conversion date. The amounts outstanding under the New Second Lien Facility will only convert into up to 2,098,545 shares of our Class A Common Stock and will only convert at a price per share equal to the then-current market value. On December 27, 2021, Manuel Senderos and Kevin Johnston exercised the conversion options for their respective loan amounts of $4.5 million and $0.2 million, respectively. See Note 15, Stockholders’ Equity, for additional information. Paycheck Protection Program Loans On April 30, 2020 and May 1, 2020, the Company received PPP loans through four of its subsidiaries for a total amount of $9.3 million. The PPP loans bear a fixed interest rate of 1% over a two-year term, are guaranteed by the United States federal government, and do not require collateral. The loans may be forgiven, in part or whole, if the proceeds are used to retain and pay employees and for other qualifying expenditures. The Company submitted its forgiveness applications to the Small Business Administration (“SBA”) between November 2020 and January 2021. The monthly repayment terms were established in the notification letters with the amount of loan forgiveness. On December 25, 2020, $0.1 million of a $0.2 million PPP loan was forgiven. On March 9, 2021, $0.1 million of a $0.3 million PPP loan was forgiven. On June 13, 2021, $1.2 million of a $1.2 million PPP loan was forgiven. On January 19, 2022, $7.3 million of a $7.6 million PPP loan was forgiven resulting in a remaining PPP Loan balance of $0.3 million of which $0.1 million is due within the next year. The remaining payments will be made quarterly until May 2, 2025. All loan forgiveness was recognized in Other income (expense), net of the Unaudited Condensed Consolidated Statements of Operations. Subordinated Promissory Note On June 24, 2021, the Company entered into a credit agreement with AGS Group LLC (“AGS Group”) for a principal amount of $0.7 million. The principal amount outstanding under this agreement matures on December 20, 2021 (“Original Maturity Date”) and was extended until May 19, 2022 (“Extended Maturity Date”). Interest is due and payable in arrears on the Original Maturity Date at a 14.0% per annum until and including December 20, 2021 and at 20.0% per annum from the Original Maturity Date to the Extended Maturity Date calculated on the actual number of days elapsed. Exitus Capital Subordinated Debt On July 26, 2021, the Company agreed with existing lenders and Exitus Capital (“Subordinated Creditor”) to enter into a zero-coupon subordinated loan agreement with Exitus Capital in an aggregate principal amount equal to $3.7 million (“Subordinated Debt”). No periodic interest payments are made and the loan was due on January 26, 2022, with an option to extend up to two additional six month terms. Net loan proceeds totaled $3.2 million, net of $0.5 million in debt discount. Payment of any and all of the Subordinated Debt shall be subordinate of all existing senior debt. In the event of any liquidation, dissolution, or bankruptcy proceedings, all senior debt shall first be paid in full before any distribution shall be made to the Subordinated Creditor. The loan is subject to a 36% annual interest moratorium if full payment is not made upon the maturity date. On January 25, 2022, the Company exercised the option to extend the loan an additional six months to July 26, 2022. The Company recognized an additional $0.5 million in debt issuance costs related to the loan extension. Financial Covenants The First Lien Facility and New Second Lien Facility establish the following financial covenants for the consolidated group: Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio applies to the consolidated group. For each Computation Period, it is the ratio of (a) EBITDA (as defined in the credit agreement) minus permitted tax distributions (or other provisions for taxes based on income) made during the Computation Period, minus all unfinanced capital expenditures made thereby in such Computation Period to (b) fixed charges (as defined in the credit agreement). Capital Expenditures. Requires the Company’s aggregate capital expenditures in any fiscal year to not exceed the capital expenditures limit for that fiscal year. Total Leverage Ratio. The Total Leverage Ratio applies to the consolidated group and is determined in accordance with US GAAP. It is calculated as of the last day of any Computation Period as the ratio of (a) total debt (as defined in credit agreement) to (b) EBITDA for the Computation Period ending on such day. The Company received a waiver for the Fixed Charge Coverage Ratio and was compliant with all other debt covenants as of March 31, 2022. The capital expenditure annual limits in place as of March 31, 2022 are:
The covenants requirements in place for the First Lien Facility as of March 31, 2022 are:
The covenants requirements in place for the New Second Lien Facility as of March 31, 2022 are:
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Other Income (Expense) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) | Other Income (Expense) Items included in other income (expense) in the Unaudited Condensed Consolidated Statements of Operations are as follows:
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Income Taxes |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income tax expense (benefit) and effective income tax rate were as follows for the periods indicated:
The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. For the three months ended March 31, 2022, the Company reported a tax expense of $0.3 million on a pretax loss of $6.0 million which resulted in an effective tax rate of (4.2)%. The Company’s effective tax rate differs from the U.S. statutory rate of 21% due to the mix of earnings in international jurisdictions with relatively higher tax rates and losses incurred in jurisdictions for which no tax benefit is recognized. For the three months ended March 31, 2021, the Company reported a tax benefit of $0.6 million on a pretax loss of $4.4 million, which resulted in an effective tax rate of 13.7%. The Company’s effective tax rate differs from the U.S. Statutory rate of 21% primarily due to discrete tax items recorded in the first quarter primarily related to provision to return adjustments and losses incurred in jurisdictions for which no tax benefit is recognized.
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Net Revenues |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenues | Net Revenues Disaggregated revenues by contract type and the timing of revenue recognition are as follows:
Liabilities by contract related to contracts with customers As of March 31, 2022 and December 31, 2021, deferred revenues were $2.4 million and $1.8 million, respectively. During the three months ended March 31, 2022 and 2021, the Company recognized revenue of $1.4 million and $0.7 million, respectively, that was deferred in the previous period. Major Customers The Company derived 13% of its revenues for the three months ended March 31, 2022 from one significant customer, as well as 13%, 11% and 11% of our revenues for the three months March 31, 2021 from three significant customers. Sales to these customers occur at multiple locations and the Company believes that the loss of these customers would have only a short- term impact on our operating results. There is risk, however, that the Company would not be able to identify and access a replacement market at comparable margins.
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Segment Reporting and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information The Company operates as a single operating segment. The Company's chief operating decision maker is the CEO, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. The following table presents the Company's geographic net revenues based on the geographic market where revenues are accumulated, as determined by customer location:
The following table presents certain of our long-lived assets by geographic area, which includes property and equipment, net and operating lease right of use assets, net:
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring Restructuring expenses consist of costs associated with the ongoing reorganization of our business operations and expense re-alignment efforts. In November 2021, we communicated efforts to streamline our operating model further by reducing layers of management and reducing our cost structure. These restructuring efforts included consolidating the Chief Revenue Officer’s responsibilities with the Global Chief Operating Officer position, consolidating span of control of sales managers from eight to four, and a reduction of underutilized bench personnel. The Company exited employees in the last half of the three months ended December 31, 2021. During the first quarter of 2022 the Company incurred additional restructuring costs related to additional terminations and consolidation of our marketing department. The remainder of restructuring expenses are expected to be completed within the third quarter of 2022. The following table summarizes the Company’s restructuring activities included in accrued liabilities:
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Warrants |
3 Months Ended |
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Mar. 31, 2022 | |
Warrants Disclosure [Abstract] | |
Warrants | Warrants The Company reviewed the accounting for both its public warrants and private warrants and determined that its public warrants should be accounted for as equity while the private warrants should be accounted for as liabilities in the Unaudited Condensed Consolidated Balance Sheets. In connection with the Business Combination, each public and private placement warrant of LIVK was assumed by the Company and represents the right to purchase one share of the Company's Class A common stock upon exercise of such warrant. The fair value of private placement warrants was remeasured as of March 31, 2022. During the first quarter of 2022, the Company recognized a loss of $0.5 million on private placement warrants to reflect the change in fair value. Refer to Note 4, Fair Value Measurements, for additional information. As of March 31, 2022, there were 8,049,980 public warrants and 2,811,250 private placement warrants outstanding. As part of LIVK's initial public offering, 8,050,000 public warrants (“Public Warrants”) were sold. The Public Warrants entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants became exercisable when the Company completed an effective registration statement. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. Additionally, LIVK consummated a private placement of 2,811,250 warrants (“Private Placement Warrants”). The Private Placement Warrants entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of the Business Combination. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. The Company filed a Form S-1 to register the shares issuable upon exercise of the Public Warrants which was declared effective on September 27, 2021. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Once the warrants become exercisable, the Company may redeem the Public Warrants: •in whole and not in part; •at a price of $0.01 per warrant; •upon not less than 30 days’ prior written notice of redemption to each warrant holder and if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and •if, and only if, there is a current registration statement in effect with respect to the Class A common stock underlying such warrants. If and when the Public Warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
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Stockholders’ Equity |
3 Months Ended |
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Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity As a result of the Business Combination, the Company authorized two classes of common stock: Class A common stock and preferred stock. Class A Common Stock As of March 31, 2022, the Company has 210,000,000 shares of Class A common stock authorized, and 50,473,423 shares issued and outstanding. Class A common stock has par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote per share. On December 21, 2021, AgileThought, Inc. entered into an underwriting agreement with A.G.P./Alliance Global Partners as representatives of the underwriters (the “Underwriters”), relating to the sale and issuance of 3,560,710 shares of the Company’s Class A common stock. The offering price to the public of the shares was $7.00 per share, and the Underwriters agreed to purchase the shares from the Company pursuant to the underwriting agreement at a price of $6.51 per share. The Company’s net proceeds from the offering were approximately $21.8 million. On December 27, 2021, the Company issued 461,236 shares of Class A Common Stock (the “Conversion Shares”) to Mr. Senderos and Mr. Johnston upon conversion of their loans under the New Second Lien Facility in the amount of $4,500,000 and $200,000, respectively. Mr. Senderos received 441,409 Conversion Shares, and Mr. Johnston received 19,827 Conversion Shares. On December 28, 2021, the Company issued 4,439,333 shares of Class A Common Stock to the administrative agent for the First Lien Facility in accordance with the amendment dated November 15, 2021. As these common shares have been issued to and are held by the lender, and are contingently returnable to the Company under certain conditions, such shares are considered as issued and outstanding on the Company’s balance sheet, but are not included in earnings per share calculations for all periods presented. See Note 9, Long-Term Debt, for further information. On January 27, 2022, the Company issued 2,228,000 Restricted Stock Units ("RSU") to senior employees and directors under the 2021 Equity Incentive Plan, of which 228,000 RSUs are subject to a service vesting condition and 2,000,000 RSUs are subject to time and market vesting requirement. See Note 17, Equity-based Arrangements, for further information. Preferred Stock Under the Company's certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock having par value of $0.0001 per share. The Company's Board of Directors has the authority to issue shares of preferred stock in one or more series and to determine preferences, privileges, and restrictions, including voting rights, of those shares. As of March 31, 2022, no shares were issued and outstanding. Prior to the Business Combination, the Company had three classes of equity: Class A ordinary shares, Class B ordinary shares and redeemable convertible preferred stock. Legacy Class A and Class B Shares As of December 31, 2020, the capital stock is represented by 431,682 Class A Shares and 37,538 Class B Shares. Holders of Class A Shares were entitled to one vote per share and Holders of Class B Shares are not entitled to vote. The common shares have no preemptive, subscription, redemption or conversion rights. In connection with the Business Combination, the Company converted it's Class A and Class B ordinary shares outstanding into shares of the Company's Class A common stock. As of March 31, 2022, no shares of Class A and Class B ordinary shares were outstanding. Redeemable Convertible Preferred Stock On February 2, 2021, LIV Capital Acquisition Corp (“LIVK”), related parties to LIVK (and together with LIVK, the “Equity Investors”) and the Company entered into an equity contribution agreement. Per the agreement, the Equity Investors purchased 2 million shares of a newly created class of preferred stock at a purchase price of $10 per share for an aggregate purchase price of $20 million. The redeemable convertible preferred stock would be redeemable for an amount in cash equal to the greater of $15 per share (the “Required Price”), or $10 per share of redeemable convertible preferred stock plus 18% interest if the Business Combination did not occur (defined in the agreement as the “Required Return”), other than as a result of LIVK’s failure to negotiate in good faith or failure to satisfy or perform any of its obligations under the merger agreement. Additionally, the redeemable convertible preferred stock would be convertible into common shares of the Company either on a one to one basis in the event of the closing of the merger agreement, or if the merger agreement were terminated and the Company subsequently consummated an initial public offering, into a number of common shares of the Company equal to the Required Return divided by 0.9, or $16.6667, multiplied by the price at which the shares of voting common stock of the Company are initially priced in such initial public offering. The redeemable convertible preferred stock had no voting and dividend rights until converted into common stock and had a liquidation preference equal to the amount of the Required Return. The Company concluded that because the redemption and conversion features of the Preferred Stock were outside of the control of the Company, the instrument was recorded as temporary or mezzanine equity in accordance with the provisions of Accounting Series Release No. 268, Presentation in Financial Statements of Redeemable Preferred Stocks. In connection with the Business Combination, all redeemable convertible preferred stock was converted into shares of Class A common stock on a one for one basis. As of March 31, 2022, no shares of redeemable convertible preferred stock were outstanding.
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Loss Per Share |
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Loss Per Share | Loss Per Share The following table sets forth the computation of basic and diluted net loss per share, retroactively restated based on the Business Combination, attributable to common stockholders:
The following table presents securities that are excluded from the computation of diluted net loss per common stock as of the periods presented because including them would have been antidilutive:
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Equity-based Arrangements |
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Equity-based Arrangements | Equity-based Arrangements The Company has granted various equity-based awards to its employees and board members as described below. The Company issues, authorized but unissued shares, for the settlement of equity-based awards. 2021 Equity Incentive Plan In connection with the Business Combination, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) on August 18, 2021, which became effective immediately upon the Closing. The 2021 Plan provides the Company with flexibility to use various equity-based incentive awards as compensation tools to motivate and retain the Company’s workforce. The Company initially reserved 5,283,216 shares of Class A common stock for the issuance of awards under the 2021 Equity Plan. The number of shares of Class A common stock available for issuance under the 2021 Plan automatically increases on the first day of each calendar year, beginning January 1, 2022 and ending on and including January 1, 2031, in an amount equal to 5% of the total number of shares of Class A common stock outstanding on December 31 of the preceding year; provided that the Board may act prior to January 1 of a given year to provide that the increase of such year will be a lesser amount of shares of Class A common stock. On January 27, 2022, the Company issued 2,228,000 Restricted Stock Units ("RSU") to senior employees and directors, of which 228,000 RSUs are subject to a service vesting condition and 2,000,000 RSUs are subject to service and market vesting requirements. The awards subject to the service vesting requirements will vest over a three year period until 2023. The portion of the awards related to the 2021 service period immediately vested on the grant date. The remaining awards vest and are expensed on a graded basis each year. The grant date fair value for the service vested RSUs under the 2021 Equity Plan was approximately $1.0 million. On January 27, 2022, 87,999 RSUs subject to service vesting conditions vested, of which 13,462 were withheld for taxes. Expense during the three months ended March 31, 2022 related to the service vested RSUs was $0.4 million. The Company also cancelled 10,000 awards during the three months ended March 31, 2022. The awards subject to both a service and market vesting condition will vest over a period of 6-10 years. The market condition is met if the volume-weighted average stock price reaches the specified stock price during the specified period. The grant date fair value for these RSUs was approximately $4.3 million. The Company recognized $0.1 million of expense during the three months ended March 31, 2022 using straight line amortization. Employee Stock Purchase Plan In connection with the Business Combination, on August 18, 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “ESPP”) for the issuance of up to a total of 1,056,643 shares of Class A common stock. The number of shares reserved for issuance will automatically increase on January 1 of each calendar year, from January 1, 2022 through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, and (ii) the number of shares equal to 200% of the initial share reserve, unless a smaller number of shares may be determined by the Board. The purchase price of Class A Common Stock will be 85% of the lesser of the fair market value of Class A Common Stock on the first trading date or on the date of purchase. No purchases have been made under the ESPP during the three months ended March 31, 2022. 2020 Equity Plan On August 4, 2020, the Company adopted the 2020 Equity Plan with the intent to encourage and retain certain of the Company’s senior employees, as well as board members. Pursuant to the 2020 Equity Plan, senior employees may receive up to 7,465 of Class A RSUs subject to time-based vesting and the occurrence of a liquidity event while board members may receive up to 300 Class A RSUs subject to time-based vesting. The awards were granted on August 4, 2020 and generally vest ratably over a three-year service period on each successive August 4th. The grant date fair value for the RSUs under the 2020 Equity Plan was approximately $5.8 million. On May 9, 2021, the Company announced the acceleration of 1,372 performance-based RSUs that the Board previously granted which covered shares of the Company’s Class A common stock pursuant to the Company’s 2020 Equity Plan. The liquidity requirement of the accelerated of RSU's was removed per the Board approval on August 19, 2021. The acceleration of RSUs became effective immediately prior to the Business Combination. During the year ended December 31, 2021, the Company recognized $1.0 million of equity-based compensation expense related to acceleration of RSUs pursuant to the 2020 Equity Plan. On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 4,921 RSUs. The RSU cancellation agreements were effective immediately prior to the Business Combination. Additionally, the remaining 1,472 RSUs were forfeited. Additionally, concurrently with the Business Combination, the Company granted additional fully vested stock awards covering shares of Class A common stock pursuant to the 2020 Equity Incentive Plan. The compensation expense related to this award recognized during the August 2021 was $5.5 million. AgileThought, LLC PIP In connection with the AgileThought, LLC acquisition in July 2019, the Company offered a performance incentive plan (“AT PIP”) to key AgileThought, LLC employees. Pursuant to the AT PIP, participants may receive up to an aggregate of 3,150 Class A shares based on the achievement of certain EBITDA -based performance metrics during each of the fiscal years as follows: up to 1,050 shares for 2020, up to 1,050 shares for 2021, and up to 1,050 shares for 2022. The EBITDA-based performance metrics were not met in 2021 or 2020 and the related awards were cancelled. The AT PIP was cancelled in August 2021. 4th Source Performance Incentive Plan On November 15, 2018, the Company acquired 4th Source and offered shares to key 4th Source employees under a Performance Incentive Plan (“the 4th Source PIP”). Pursuant to the 4th Source PIP, participants may receive up to an aggregate of 8,394 shares based on the achievement of certain EBITDA-based performance metrics during each of the fiscal years as follows: up to 3,222 shares for 2019, up to 4,528 shares for 2020, and up to 644 shares for 2021. The EBITDA-based performance metric was not met in 2021 and the related PSUs were cancelled. The 4th Source PIP was cancelled in August 2021. AgileThought Inc. Management Performance Share Plan In 2019, the Company adopted the Management Performance Share Plan, which provides for the issuance of PSUs. These awards representing an aggregate of 1,232 Class A shares vest upon the occurrence of a liquidity event, attainment of certain performance metrics and service-based vesting criteria. On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 1,232 RSUs pursuant to the 2019 AN Management Compensation Plan. The RSU cancellation agreements were effective immediately prior to the Business Combination. 2017 AN Management Stock Compensation Plan On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 1,880 RSUs pursuant to the 2017 AN Management Compensation Plan. The RSU cancellation agreements were effective immediately prior to the Business Combination. The following table summarizes all of our equity-based awards activity for the plans described above:
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Commitment and Contingencies |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesThe Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe these actions will have a material, adverse effect on the Company’s Unaudited Condensed Consolidated Balance Sheets, Unaudited Condensed Consolidated Statements of Operations or Unaudited Condensed Consolidated Statements of Cash Flows. As of March 31, 2022 and December 31, 2021, the Company had labor lawsuits in process, whose resolution is pending. As of March 31, 2022 and December 31, 2021, the Company has recorded liabilities for labor lawsuits and/or litigation of $1.5 million and $1.4 million, respectively. |
Supplemental Cash Flows |
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Supplemental Cash Flows | Supplemental Cash Flows The following table provides detail of non-cash activity and cash flow information:
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Subsequent Events |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsManagement has evaluated all subsequent events until May 13, 2022, when the unaudited condensed consolidated financial statements were issued. Accordingly, where applicable, the notes to these unaudited condensed consolidated financial statements have been updated and adjustments to the Company's unaudited condensed consolidated financial statements have been reflected. |
Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). For interim financial reporting not all disclosures normally required in annual Consolidated Financial Statements prepared in accordance with U.S. GAAP are required. The Business Combination was accounted for as a reverse capitalization in accordance with U.S. GAAP (the “Recapitalization”). Under this method of accounting, LIVK is treated as the acquired company and Legacy AgileThought is treated as the accounting acquirer for financial reporting purposes, resulting in no change in the carrying amount of the Company's assets and liabilities. The consolidated assets, liabilities and results of operations prior to the Recapitalization are those of Legacy AgileThought. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination. In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of normal and recurring nature, have been made for the interim periods reported. Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. The balance sheet as of December 31, 2021 has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2021 that are included in our annual report on Form 10-K filed with the SEC on March 31, 2022 ("Annual Report"). All intercompany transactions and balances have been eliminated in consolidation. The ownership interest of noncontrolling investors of the Company's subsidiaries are recorded as noncontrolling interest. The Company evaluated subsequent events, if any, that would require an adjustment to the Company's Unaudited Condensed Consolidated Financial Statements or require disclosure in the notes to the Unaudited Condensed Consolidated Financial Statements through the date of issuance of the condensed consolidated financial statements. Where applicable, the notes to these Unaudited Condensed Consolidated Financial Statements have been updated to discuss all significant subsequent events which have occurred.
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Use of Estimates | Use of EstimatesThe preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements. Further, certain estimates and assumptions include the direct and indirect impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations. We make significant estimates with respect to intangible assets, goodwill, depreciation, amortization, income taxes, equity-based compensation, contingencies, fair value of assets and liabilities acquired, obligations related to contingent consideration in connection with business combinations, fair value of embedded derivative liabilities, and fair value of warrant liability. The economic impact of the pandemic on the Company’s business depends on its severity and duration, which in turn depend on highly uncertain factors such as the nature and extent of containment efforts, the spread and effects of variants, and the timing and efficacy of vaccines. The high level of uncertainty regarding this economic impact means that management’s estimates and assumptions are subject to change as the situation develops and new information becomes available. To the extent the actual results differ materially from these estimates and assumptions, the Company’s future financial statements could be materially affected. |
Fair Value Measurements | Fair Value Measurements The Company records fair value of assets and liabilities in accordance with Financial Accounting Standards Board’s (“FASB”) Account Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. ASC 820 includes disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reporting in one of three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are as follows: Level 1:Quoted prices for identical instruments in active markets. Level 2:Other valuations that include quoted prices for similar instruments in active markets that are directly or indirectly observable. Level 3:Valuations made through techniques in which one or more of its significant data are not observable.
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Goodwill | Goodwill Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased and is allocated to a reporting unit when the acquired business is integrated into the Company. Goodwill is not amortized but is tested for impairment annually on October 1st. The Company will also perform an assessment whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may be more than its recoverable amount. Under FASB guidance, management may first assess certain qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. When needed, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the quantitative test, we compare the fair value of the reporting unit with the respective carrying value. Management uses a combined income and public company market approach to estimate the fair value of each reporting unit. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit. This analysis requires significant assumptions, such as estimated future cash flows, long-term growth rate estimates, weighted average cost of capital, and market multiples. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.
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Intangible Assets | Intangible Assets The Company has customer relationships (finite-lived intangible assets) and trade names (finite-lived and indefinite-lived intangible assets) on its Unaudited Condensed Consolidated Balance Sheets. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed. We test for impairment when events or circumstances indicate the carrying value of a finite-lived intangible asset may not be recoverable. Consistent with other long-lived assets, if the carrying value is not determined to be recoverable, we calculate an impairment loss based on the excess of the asset’s carrying value over its fair value. The fair value is determined using the discounted cash flow approach of multi-period excess earnings. During the first quarter of 2021, the Company reassessed and changed the estimated economic life of a certain trade name from indefinite to finite-lived as a result of the shift in operations towards a global strategy as “One AgileThought.” As a result, the Company began amortizing a certain trade name using straight-line method over their average remaining economic life of five years. Indefinite-lived intangible assets are not amortized but are instead assessed for impairment annually on October 1st and as needed whenever events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An impairment loss is recognized if the asset’s carrying value exceeds its fair value. The Company uses the relief from royalty method to determine the fair value of its indefinite-lived intangible assets.
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Embedded Derivative Liabilities | Embedded Derivative Liabilities The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company has evaluated the terms and features of its redeemable convertible preferred stock issued in February 2021 and identified two embedded derivatives requiring bifurcation from the underlying host instrument pursuant to ASC 815-15, Embedded Derivatives. Embedded derivatives met the criteria for bifurcation due to the instruments containing conversion options and mandatory redemption features that are not clearly and closely related to the host instrument. Embedded derivatives are bifurcated from the underlying host instrument and accounted for as separate financial instruments. Embedded derivatives are recognized at fair value, with changes in fair value during the period are recognized in "Change in fair value of embedded derivative liabilities" in the Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022 and in connection with the consummation of the Business Combination that occurred on August 23, 2021, the preferred stock was converted into common stock of the Company and the Embedded derivative ceased to exist.
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Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded as liabilities. At the end of each reporting period, changes in fair value during the period are recognized in “Change in fair value of warrant liability” in the Company’s Unaudited Condensed Consolidated Statements of Operations. The Company will continue to adjust the warrant liability for changes in the fair value until the earlier of a) the exercise or expiration of the warrants or b) the redemption of the warrants. Our public warrants meet the criteria for equity classification and accordingly, are reported as a component of stockholders’ equity while our private warrants do not meet the criteria for equity classification and are thus classified as a liability.
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Accounting Pronouncements | Accounting Pronouncements The authoritative bodies release standards and guidance, which are assessed by management for impact on the Company’s Unaudited Condensed Consolidated Financial Statements. Accounting Standards Updates (“ASUs”) not listed below were assessed and determined to be not applicable to the Company’s Unaudited Condensed Consolidated Financial Statements. The following standards were recently adopted by the Company: •In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform, that refined the scope of ASU No. 2020-04 and clarified some of its provisions. The amendments permit entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by the discounting transition. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities, including adoption in an interim period. This ASU was adopted by the Company during the second quarter of 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements. •In May 2021, the FASB issued ASU 2021-04, Earnings Per Share, Debt-Modifications and Extinguishments, Compensation-Stock Compensation, and Derivatives and Hedging-Contracts in Entity’s Own Equity. This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU is effective for fiscal years beginning after December 15, 2021 on a prospective basis. Early adoption is permitted for all entities, including adoption in an interim period. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements. •In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers. This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements.
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Business Combination (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Combination | The following table reconciles the elements of the Business Combination to the additional paid-in capital in the Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2021:
_________________ (a)Relates to the transfer from mezzanine equity to permanent equity of the preferred contribution received from LIV Capital on February 02, 2021, which was considered part of the PIPE financing and upon the transaction close, was reclassified to permanent equity of the Company. The number of shares of Class A common stock issued immediately following the consummation of the Business Combination:
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Fair Value Measurements (Tables) |
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Summary of Fair Value Instruments | The following table summarizes our instruments where fair value differs from carrying value:
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Schedule of Roll-Forward of Fair Value Liabilities | The following table provides a roll-forward of the obligations for contingent purchase price:
The following table presents the changes in the fair value of private warrant liability at March 31, 2022:
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Balance Sheet Details (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Balance Sheet Items | The following table provides detail of selected balance sheet items:
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Schedule of Allowance for Doubtful Accounts | The following table is a rollforward of the allowance for doubtful accounts:
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Property and Equipment, Net (Tables) |
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Schedule of Property and Equipment, Net | Property and equipment, net consist of the following:
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Goodwill and Intangible Assets, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill | The following table presents changes in the goodwill balances as of March 31, 2022:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Finite-Lived Intangible Assets | Summary of our finite-lived intangible assets is as follows:
|
Long-term Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt as of March 31, 2022 and December 31, 2021 consists of the following:
_________________ (a)Debt issuance costs are presented as a reduction of the Company’s debt in the Unaudited Condensed Consolidated Balance Sheets. $0.4 million and $0.3 million of debt issuance cost amortization was charged to interest expense for the three months ended March 31, 2022 and 2021. Debt premium of $0.7 million was recognized upon extinguishment of debt and is presented as an addition to the Company's debt in the Unaudited Condensed Consolidated Balance Sheet. The capital expenditure annual limits in place as of March 31, 2022 are:
The covenants requirements in place for the First Lien Facility as of March 31, 2022 are:
The covenants requirements in place for the New Second Lien Facility as of March 31, 2022 are:
|
Other Income (Expense) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Income (Expense) | Items included in other income (expense) in the Unaudited Condensed Consolidated Statements of Operations are as follows:
|
Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Expense (Benefit) and Effective Income Tax Rate | Income tax expense (benefit) and effective income tax rate were as follows for the periods indicated:
|
Net Revenues (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenues by Contract Type and Timing of Revenue Recognition | Disaggregated revenues by contract type and the timing of revenue recognition are as follows:
|
Segment Reporting and Geographic Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Geographic Net Revenues and Long-Lived Assets | The following table presents the Company's geographic net revenues based on the geographic market where revenues are accumulated, as determined by customer location:
The following table presents certain of our long-lived assets by geographic area, which includes property and equipment, net and operating lease right of use assets, net:
|
Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||
Summary of Restructuring Activities | The following table summarizes the Company’s restructuring activities included in accrued liabilities:
|
Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share, retroactively restated based on the Business Combination, attributable to common stockholders:
|
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Schedule of Potential Shares of Antidilutive Common Stock | The following table presents securities that are excluded from the computation of diluted net loss per common stock as of the periods presented because including them would have been antidilutive:
|
Equity-based Arrangements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Equity-Based Awards Activity | The following table summarizes all of our equity-based awards activity for the plans described above:
|
Supplemental Cash Flows (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Detail of Non-Cash Activity and Cash Flow Information | The following table provides detail of non-cash activity and cash flow information:
|
Summary of Significant Accounting Policies (Details) - derivative |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Feb. 28, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Number of embedded derivatives identified | 2 | ||
Tradename | |||
Finite-Lived Intangible Assets [Line Items] | |||
Averaging remaining economic life | 5 years | 5 years |
Business Combination - Narrative (Details) |
Aug. 20, 2021
USD ($)
$ / shares
shares
|
Dec. 21, 2021
$ / shares
|
---|---|---|
Class A | ||
Business Acquisition [Line Items] | ||
Conversion ratio | 1 | |
Sale of stock, price per share (in dollars per share) | $ / shares | $ 7.00 | |
Stock repurchased during period (in shares) | 7,479,065 | |
Shares with redemption rights (as a percent) | 93.00% | |
Stock repurchased during period (in dollars per share) | $ / shares | $ 10.07 | |
Stock repurchased during period | $ | $ 75,300,000 | |
Class A | Legacy AT Common Stock Holders | ||
Business Acquisition [Line Items] | ||
Number of shares issued (in shares) | 34,557,480 | |
Class A | Legacy AT Preferred Stock Holders | ||
Business Acquisition [Line Items] | ||
Number of shares issued (in shares) | 2,000,000 | |
PIPE Financing | ||
Business Acquisition [Line Items] | ||
Number of shares issued (in shares) | 2,760,000 | |
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10.00 | |
Aggregate proceeds from transaction | $ | $ 27,600,000 |
Fair Value Measurements - Summary of Fair Value Instruments (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Carry Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Bank credit agreement | $ 31,270 | $ 31,882 |
New Second Lien Facility | 17,069 | 16,120 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Bank credit agreement | 31,947 | 31,897 |
New Second Lien Facility | $ 17,068 | $ 16,214 |
Fair Value Measurements - Schedule of Roll-Forward of Contingent Purchase Price Obligations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Less: Current portion | $ 9,026 | $ 8,791 |
Obligation for contingent purchase price, net of current portion | 0 | |
Fair Value, Inputs, Level 3 | Contingent Purchase Price Obligation | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 8,791 | |
Cash payments | 0 | |
Accrued interest on the contingent consideration | 180 | |
Effect of exchange rate fluctuations | 55 | |
Ending balance | $ 9,026 |
Fair Value Measurements - Schedule of Changes in Fair Value of Warrant Liabilities (Details) - Fair Value, Inputs, Level 3 - Private Placement Warrants $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 2,137 |
Change in valuation inputs and other assumptions | 478 |
Ending balance | $ 2,615 |
Balance Sheet Details - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 2,501 | $ 8,463 | ||
Restricted cash | 212 | 177 | $ 169 | |
Total cash, cash equivalents and restricted cash | $ 2,713 | $ 8,640 | $ 2,689 | $ 9,432 |
Balance Sheet Details - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivables | $ 19,834 | $ 19,173 |
Unbilled accounts receivables | 17,295 | 11,716 |
Other receivables | 741 | 686 |
Allowance for doubtful accounts | (193) | (188) |
Total accounts receivable, net | $ 37,677 | $ 31,387 |
Balance Sheet Details - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Income tax receivables | $ 2,554 | $ 2,369 |
Prepaid expenses and other current assets | 5,444 | 5,121 |
Total prepaid expenses and other current assets | $ 7,998 | $ 7,490 |
Balance Sheet Details - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued wages, vacation & other employee related items | $ 3,980 | $ 2,387 |
Accrued interest | 312 | 381 |
Accrued incentive compensation | 87 | 654 |
Receipts not vouchered | 6,512 | 5,872 |
Accrued liabilities - Related Party | 0 | 17 |
Other accrued liabilities | 951 | 467 |
Total accrued liabilities | $ 11,842 | $ 9,778 |
Balance Sheet Details - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance, January 1 | $ 188 | $ 267 |
Charges to expense | 3 | 10 |
Foreign currency translation | 2 | (4) |
Ending balance | $ 193 | $ 273 |
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 10,262 | $ 10,375 |
Less: accumulated depreciation | (7,414) | (7,268) |
Property and equipment, net | 2,848 | 3,107 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,191 | 4,210 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,247 | 2,179 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,365 | 1,691 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,432 | 2,240 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 27 | $ 55 |
Property and Equipment, Net - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 200,000 | $ 300,000 |
Impairment expense | $ 0 | $ 0 |
Goodwill and Intangible Assets, Net - Schedule of Changes in Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 70,345 |
Foreign currency translation | 497 |
Ending balance | 70,842 |
LATAM | |
Goodwill [Roll Forward] | |
Beginning balance | 39,651 |
Foreign currency translation | 497 |
Ending balance | 40,148 |
USA | |
Goodwill [Roll Forward] | |
Beginning balance | 30,694 |
Foreign currency translation | 0 |
Ending balance | $ 30,694 |
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Goodwill [Line Items] | |||
Finite-lived intangible assets impairment | $ 0 | $ 0 | |
Indefinite-lived intangible assets impairment | 0 | $ 0 | |
Tradename | |||
Goodwill [Line Items] | |||
Indefinite-lived intangible assets | $ 16,400,000 | $ 16,300,000 | |
Tradename | |||
Goodwill [Line Items] | |||
Averaging remaining economic life | 5 years | 5 years |
Long-term Debt - Subordinated Promissory Note (Details) - Related Party Subordinated Promissory Note Payable Due December 12, 2021 - Subordinated Debt - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
Dec. 21, 2021 |
Dec. 20, 2021 |
Jun. 24, 2021 |
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 0.7 | ||||
Stated interest rate (as a percent) | 20.00% | 20.00% | 20.00% | 14.00% |
Long-term Debt - Exitus Capital Subordinated Debt (Details) - Exitus Capital Subordinated Debt - Subordinated Debt |
Jul. 26, 2021
USD ($)
payment_term
|
Jan. 25, 2022
USD ($)
|
---|---|---|
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 3,700,000 | |
Additional payment terms | payment_term | 2 | |
Additional payment terms period | 6 months | |
Proceeds from loans | $ 3,200,000 | |
Debt discount | $ 500,000 | |
Annual interest moratorium (as a percent) | 36.00% | |
Debt issuance costs | $ 500,000 |
Other Income (Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Other Income and Expenses [Abstract] | ||
Foreign exchange gain (loss) | $ 252 | $ (1,336) |
Forgiveness of PPP loans | 7,280 | 63 |
Other interest (expense) income | (5) | 23 |
Other non-operating expense | (206) | (58) |
Total other income (expense) | $ 7,321 | $ (1,308) |
Income Taxes - Schedule of Income Tax Expense (Benefit) and Effective Income Tax Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 251 | $ (608) |
Effective tax rates (as a percent) | (4.20%) | 13.70% |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 251 | $ (608) |
Pretax income (loss) | $ (6,047) | $ (4,443) |
Effective tax rates (as a percent) | (4.20%) | 13.70% |
Net Revenues - Schedule of Disaggregated Revenues by Contract Type and Timing of Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 44,224 | $ 37,213 |
Time and materials | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 33,251 | 30,541 |
Fixed price | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 10,973 | $ 6,672 |
Net Revenues - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Concentration Risk [Line Items] | |||
Deferred revenue | $ 2,426 | $ 1,789 | |
Recognition of previously deferred revenue | $ 1,400 | $ 700 | |
Revenue Benchmark | Customer Concentration Risk | Customer One | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 13.00% | 13.00% | |
Revenue Benchmark | Customer Concentration Risk | Customer Two | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 11.00% | ||
Revenue Benchmark | Customer Concentration Risk | Customer Three | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 11.00% |
Segment Reporting and Geographic Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
operating_segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Reporting and Geographic Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 44,224 | $ 37,213 | |
Long-Lived Assets | 8,488 | $ 9,541 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 28,998 | 24,520 | |
Long-Lived Assets | 5,119 | 5,837 | |
Latin America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 15,226 | $ 12,693 | |
Long-Lived Assets | $ 3,369 | $ 3,704 |
Restructuring - Narrative (Details) |
1 Months Ended |
---|---|
Nov. 30, 2021
position
| |
Restructuring and Related Activities [Abstract] | |
Number of positions prior to consolidation | 8 |
Number of positions upon consolidation | 4 |
Restructuring - Summary of Restructuring Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 753 | $ 10 |
Organization Restructuring | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 552 | |
Restructuring charges | 753 | |
Payments | (814) | |
Ending balance | $ 491 |
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Aug. 20, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Warrants Disclosure [Abstract] | |||
Number of securities called by each warrant or right (in shares) | 1 | 1 | |
Warrant liability, number of securities called by each warrant or right (in shares) | 1 | 1 | |
Change in fair value of warrant liability | $ 478 | $ 0 | |
Warrants outstanding (in shares) | 8,050,000 | 8,049,980 | |
Warrant liability, warrants outstanding (in shares) | 2,811,250 | 2,811,250 | |
Exercise price of warrants or rights (in dollars per share) | $ 11.50 | ||
Expiration term of warrants | 5 years | ||
Warrant liability, exercise price (in dollars per share) | $ 11.50 | ||
Period following business combination | 30 days | ||
Redemption price per share (in dollars per share) | $ 0.01 | ||
Minimum prior written notice of redemption period | 30 days | ||
Warrant redemption, stock price trigger (in dollars per share) | $ 18.00 | ||
Trading days within trading day period | 20 days | ||
Trading day period | 30 days |
Stockholders’ Equity - Redeemable Convertible Preferred Stock (Details) $ / shares in Units, $ in Millions |
Feb. 02, 2021
USD ($)
vote
$ / shares
shares
|
Mar. 31, 2022
shares
|
May 09, 2021 |
---|---|---|---|
Temporary Equity [Line Items] | |||
Number of shares issued (in shares) | shares | 2,000,000 | ||
Redemption price (in dollars per share) | $ 10 | ||
Aggregate purchase price | $ | $ 20 | ||
Conversion of redeemable convertible preferred stock into common shares (in shares) | 1 | 1 | |
Redeemable convertible preferred stock conversion ratio | 0.9 | ||
Redeemable convertible preferred stock (in dollars per share) | $ 16.6667 | ||
Redeemable convertible preferred stock, votes per share | vote | 0 | ||
Redeemable convertible preferred stock outstanding (in shares) | shares | 0 | ||
Temporary Equity, Redemption Term One | |||
Temporary Equity [Line Items] | |||
Redemption price (in dollars per share) | $ 15 | ||
Temporary Equity, Redemption Term Two | |||
Temporary Equity [Line Items] | |||
Redemption price (in dollars per share) | $ 10 | ||
Additional interest (as a percent) | 18.00% |
Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Net loss attributable to common stockholders - basic | $ (6,347) | $ (3,865) |
Net loss attributable to common stockholders - diluted | $ (6,347) | $ (3,865) |
Weighted average number of common stock - basic (in shares) | 46,022,767 | 34,557,480 |
Weighted average number of common stock - diluted (in shares) | 46,022,767 | 34,557,480 |
Net loss per common stock - basic (in dollars per share) | $ (0.14) | $ (0.11) |
Net loss per common stock - diluted (in dollars per share) | $ (0.14) | $ (0.11) |
Equity-based Arrangements - Employee Stock Purchase Plan (Details) - Employee Stock - Employee Stock Purchase Plan |
Aug. 18, 2021
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance of awards (in shares) | 1,056,643 |
Total number of shares of capital stock outstanding (as a percent) | 1.00% |
Initial share reserve (as a percent) | 200.00% |
Purchase price of common stock (as a percent) | 85.00% |
Equity-based Arrangements - AgileThought, LLC PIP (Details) - Performance Shares - AgileThought, LLC PIP |
Jul. 31, 2019
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 3,150 |
Share-Based Payment Award, Performance Period One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 1,050 |
Share-Based Payment Award, Performance Period Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 1,050 |
Share-Based Payment Award, Performance Period Three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 1,050 |
Equity-based Arrangements - 4th Source Performance Incentive Plan (Details) - Performance Shares - 4th Source Performance Incentive Plan |
Nov. 15, 2018
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 8,394 |
Share-Based Payment Award, Performance Period One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 3,222 |
Share-Based Payment Award, Performance Period Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 4,528 |
Share-Based Payment Award, Performance Period Three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 644 |
Equity-based Arrangements - AgileThought Inc. Management Performance Share Plan (Details) - Performance Shares - AgileThought Inc. Management Performance Share Plan - shares |
3 Months Ended | |
---|---|---|
Aug. 16, 2021 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 1,232 | |
Cancelled in period (in shares) | 1,232 |
Equity-based Arrangements - 2017 AN Management Stock Compensation Plan (Details) |
3 Months Ended |
---|---|
Aug. 16, 2021
shares
| |
Restricted Stock Units (RSUs) | 2017 AN Management Stock Compensation Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cancelled in period (in shares) | 1,880 |
Equity-based Arrangements - AT PIP (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Share-based Payment Arrangement [Abstract] | |
Unrecognized stock-based compensation | $ 4.4 |
Weighted-average recognition period of unrecognized stock-based compensation expense | 7 years 1 month 6 days |
Commitment and Contingencies (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Liabilities for labor lawsuits and litigation | $ 1.5 | $ 1.4 |
Supplemental Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Supplemental disclosure of non-cash investing activities & cash flow information | ||
Forgiveness of loans | $ 7,280 | $ 63 |
Right-of-use assets obtained in exchange for operating lease liabilities | 77 | 450 |
Cash paid during the period for interest | 932 | 2,428 |
Fees due to creditor | $ 500 | $ 0 |