(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices, including zip code) | |||||
( | |||||
(Registrant’s telephone number, including area code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Large Accelerated Filer ☐ | Non-Accelerated Filer ☐ | |||||||
Smaller Reporting Company | Emerging Growth Company |
Item Number | Page | |||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 6. | 33 | |||||||
Item 1. | Financial Statements (unaudited) |
Assets | June 30, 2021 | December 31, 2020 | |||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable – net | |||||||||||
Inventories – net | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment – net | |||||||||||
Goodwill | |||||||||||
Intangible assets – net | |||||||||||
Lease right-of-use assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued salaries and benefits | |||||||||||
Accrued expenses | |||||||||||
Lease liabilities – current portion | |||||||||||
Customer deposits and deferred service revenue | |||||||||||
Total current liabilities | |||||||||||
Lease liabilities – net of current portion | |||||||||||
Deferred service revenue – noncurrent | |||||||||||
Long-term debt | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Product | $ | $ | $ | $ | |||||||||||||||||||
Service | |||||||||||||||||||||||
Contract | |||||||||||||||||||||||
Costs of sales: | |||||||||||||||||||||||
Product | |||||||||||||||||||||||
Service | |||||||||||||||||||||||
Contract | |||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Amortization of identifiable intangible assets | |||||||||||||||||||||||
Gain on insurance proceeds | ( | ||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Other expense – net | ( | ( | ( | ( | |||||||||||||||||||
Loss on extinguishment of debt | ( | ||||||||||||||||||||||
Interest expense – net | ( | ( | ( | ( | |||||||||||||||||||
Loss before provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Benefit from (provision for) income taxes | ( | ||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share (basic and diluted) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares outstanding (basic and outstanding) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income loss, net of applicable tax: | |||||||||||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Common Stock | Additional Paid in Capital | Accumulated deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Net issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of restricted stock awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for acquisition | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid in Capital | Accumulated deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Net issuance of restricted stock awards | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock for acquisition | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Equity component of redeemed 2024 convertible notes (net of deferred taxes of $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Equity component of issued 2026 convertible notes (net of deferred taxes of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Accretion of debt in interest expense | |||||||||||
Current expected credit losses | |||||||||||
Provision for obsolete inventory | |||||||||||
Stock-based compensation | |||||||||||
Loss on debt extinguishment | |||||||||||
Deferred income tax | ( | ( | |||||||||
Changes in operating assets and liabilities, net of acquisition: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ( | |||||||||
Other current assets | ( | ||||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued salaries and benefits | ( | ( | |||||||||
Accrued expenses | ( | ( | |||||||||
Customer deposits and deferred service revenue | ( | ( | |||||||||
Other long-term liabilities | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Settlement of working capital for acquisitions | |||||||||||
Cash paid for acquisition, net of cash acquired | ( | ||||||||||
Capital expenditures | ( | ( | |||||||||
Capitalization of software costs | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Principal payments of long-term debt | ( | ( | |||||||||
Payments for the extinguishment of notes payable | ( | ||||||||||
Proceeds from common stock issuance | |||||||||||
Payments for common stock issuance costs | ( | ||||||||||
Proceeds from debt issuance, net of original issue discount | |||||||||||
Payments for debt issuance costs | ( | ||||||||||
Treasury stock acquired from employees upon vesting or forfeiture of restricted stock | ( | ( | |||||||||
Proceeds from exercise of stock options | |||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
Net (decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and equivalents at end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash taxes paid, net of refunds | |||||||||||
Capitalized software recorded in accounts payable | |||||||||||
Capital expenditures in accounts payable | |||||||||||
Tax withholding in accrued salaries and benefits related to treasury stock acquired from employees | |||||||||||
Common stock issued for acquisition | |||||||||||
Acquisition consideration not yet settled |
June 30, 2021 | December 31, 2020 | ||||||||||
Cash and cash equivalents | |||||||||||
Cash | $ | $ | |||||||||
Money market funds | |||||||||||
Total cash and cash equivalents | $ | $ |
(in thousands) | 2021 | 2020 | |||||||||
Beginning balance - January 1 | $ | $ | |||||||||
Acquired deferred revenue (Note 3) | |||||||||||
Recognition of deferred revenue | ( | ( | |||||||||
Deferral of revenue | |||||||||||
Ending balance - June 30 | $ | $ |
Next 12 Months | $ | ||||
Months 13-24 | |||||
Months 25-36 | |||||
Thereafter | |||||
TOTAL | $ |
Three months ended June 30, 2021 | |||||||||||||||||
Restaurant/Retail point in time | Restaurant/Retail over time | Government over time | |||||||||||||||
Hardware | $ | $ | $ | ||||||||||||||
Software | |||||||||||||||||
Service | |||||||||||||||||
Mission Systems | |||||||||||||||||
ISR Solutions | |||||||||||||||||
Product | |||||||||||||||||
TOTAL | $ | $ | $ |
Three months ended June 30, 2020 | |||||||||||||||||
Restaurant/Retail point in time | Restaurant/Retail over time | Government over time | |||||||||||||||
Hardware | $ | $ | $ | ||||||||||||||
Software | |||||||||||||||||
Service | |||||||||||||||||
Mission Systems | |||||||||||||||||
ISR Solutions | |||||||||||||||||
Product | |||||||||||||||||
TOTAL | $ | $ | $ |
Six months ended June 30, 2021 | |||||||||||||||||
Restaurant/Retail point in time | Restaurant/Retail over time | Government over time | |||||||||||||||
Hardware | $ | $ | $ | ||||||||||||||
Software | |||||||||||||||||
Service | |||||||||||||||||
Mission Systems | |||||||||||||||||
ISR Solutions | |||||||||||||||||
Product | |||||||||||||||||
TOTAL | $ | $ | $ |
Six months ended June 30, 2020 | |||||||||||||||||
Restaurant/Retail point in time | Restaurant/Retail over time | Government over time | |||||||||||||||
Hardware | $ | $ | $ | ||||||||||||||
Software | |||||||||||||||||
Service | |||||||||||||||||
Mission Systems | |||||||||||||||||
ISR Solutions | |||||||||||||||||
Product | |||||||||||||||||
TOTAL | $ | $ | $ |
(in thousands) | Purchase price allocation | ||||
Cash | $ | ||||
Accounts receivable | |||||
Property and equipment | |||||
Right of use lease assets | |||||
Developed technology | |||||
Customer relationships | |||||
Indemnification assets | |||||
Trade name | |||||
Prepaid and other acquired assets | |||||
Goodwill | |||||
Total assets | |||||
Accounts payable and accrued expenses | |||||
Deferred revenue | |||||
Loan payables | |||||
Right of use lease liabilities | |||||
Indemnification liabilities | |||||
Deferred taxes | |||||
Consideration paid | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2021 | December 31, 2020 | ||||||||||
Government segment: | |||||||||||
Billed | $ | $ | |||||||||
Advanced billings | ( | ||||||||||
Restaurant/Retail segment: | |||||||||||
Accounts receivable - net | $ | $ |
(in thousands) | 2021 | 2020 | |||||||||
Beginning Balance - January 1 | $ | $ | |||||||||
Provisions | |||||||||||
Write-offs | ( | ( | |||||||||
Recoveries | ( | ||||||||||
Ending Balance - June 30 | $ | $ |
(in thousands) | June 30, 2021 | December 31, 2020 | |||||||||
Finished goods | $ | $ | |||||||||
Work in process | |||||||||||
Component parts | |||||||||||
Service parts | |||||||||||
Inventories, net | $ | $ |
(in thousands) | June 30, 2021 | December 31, 2020 | Estimated useful life | ||||||||||||||
Acquired and internally developed software costs | $ | $ | |||||||||||||||
Customer relationships | |||||||||||||||||
Trade names | |||||||||||||||||
Non-competition agreements | |||||||||||||||||
Less accumulated amortization | ( | ( | |||||||||||||||
Internally developed software costs not yet ready for its intended use | |||||||||||||||||
Trademarks, trade names (non-amortizable) | |||||||||||||||||
$ | $ |
2021, remaining | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
(in thousands) | |||||
Beginning balance - December 31, 2020 | $ | ||||
Punchh Acquisition | |||||
Ending balance - June 30, 2021 | $ |
(in thousands) | 2024 Notes | 2026 Notes | Owl Rock Credit Agreement | ||||||||||||||
Principal amount of notes outstanding | $ | $ | $ | ||||||||||||||
Unamortized discount and unamortized debt issuance cost | ( | ( | ( | ||||||||||||||
Total long-term portion of notes payable | $ | $ | $ |
Three months ended June 30, | |||||||||||
(in thousands) | 2021 | 2020 | |||||||||
Contractual interest expense | $ | $ | |||||||||
Amortization of debt issuance costs and discount | |||||||||||
Total interest expense | $ | $ |
Six months ended June 30, | |||||||||||
(in thousands) | 2021 | 2020 | |||||||||
Contractual interest expense | $ | $ | |||||||||
Amortization of debt issuance costs and discount | |||||||||||
Total interest expense | $ | $ |
2021, remaining | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
Expected term | |||||
Risk free interest rate | % | ||||
Expected volatility | % | ||||
Expected dividend yield | None | ||||
Fair value (per warrant) | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Cost of sales - contracts | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
(in thousands, except for exercise price) | Options outstanding | Weighted average exercise price | |||||||||
Outstanding at January 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Exercised | ( | ||||||||||
Canceled/forfeited | ( | ||||||||||
Outstanding at June 30, 2021 | $ |
Weighted average expected term | |||||
Weighted average risk-free interest rate | % | ||||
Weighted average expected volatility | % | ||||
Expected dividend yield | None | ||||
Estimated fair value (per share) | $ |
(in thousands, except for award value) | Restricted Stock Awards | Weighted average award value | |||||||||
Outstanding at January 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Canceled/forfeited | ( | ||||||||||
Outstanding at June 30, 2021 | $ |
(in thousands, except for award value) | RSU Awards | Weighted average award value | |||||||||
Outstanding at January 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Canceled/forfeited | ( | ||||||||||
Outstanding at June 30, 2021 | $ |
(in thousands) | Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net Revenues: | |||||||||||||||||||||||
Restaurant/Retail | $ | $ | $ | $ | |||||||||||||||||||
Government | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Operating loss: | |||||||||||||||||||||||
Restaurant/Retail | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Government | |||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
Total | ( | ( | ( | ( | |||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Loss on extinguishment of debt | ( | ||||||||||||||||||||||
Loss before benefit from income taxes | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Depreciation, amortization and accretion: | |||||||||||||||||||||||
Restaurant/Retail | $ | $ | $ | $ | |||||||||||||||||||
Government | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Capital expenditures including software costs: | |||||||||||||||||||||||
Restaurant/Retail | $ | $ | $ | $ | |||||||||||||||||||
Government | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Revenues by country: | |||||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Other Countries | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(in thousands) | June 30, 2021 | December 31, 2020 | |||||||||
Restaurant/Retail | $ | $ | |||||||||
Government | |||||||||||
Other | |||||||||||
Total | $ | $ |
(in thousands) | June 30, 2021 | December 31, 2020 | |||||||||
United States | $ | $ | |||||||||
Other Countries | |||||||||||
Total | $ | $ |
(in thousands) | June 30, 2021 | December 31, 2020 | |||||||||
Restaurant/Retail | $ | $ | |||||||||
Government | |||||||||||
Total | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Restaurant/Retail reporting segment: | |||||||||||||||||||||||
Dairy Queen | % | % | % | % | |||||||||||||||||||
Yum! Brands, Inc. | % | % | % | % | |||||||||||||||||||
Government reporting segment: | |||||||||||||||||||||||
U.S. Department of Defense | % | % | % | % | |||||||||||||||||||
All Others | % | % | % | % | |||||||||||||||||||
% | % | % | % |
Contingency Type | Maximum Payout (undiscounted) (in thousands) | Fair Value | Valuation Technique | Unobservable Inputs | Weighted Average or Range | |||||||||||||||||||||||||||
Revenue-based payments | $ | $ | Monte Carlo | Revenue volatility | % | |||||||||||||||||||||||||||
Discount rate | % | |||||||||||||||||||||||||||||||
Projected year(s) of payment | 2021-2022 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended June 30, | $ | % | |||||||||||||||||||||
(in thousands) | 2021 | 2020 | variance | variance | |||||||||||||||||||
Restaurant/Retail | |||||||||||||||||||||||
Hardware | $ | 23,355 | $ | 12,129 | $ | 11,226 | 93 | % | |||||||||||||||
Software | 15,100 | 5,977 | 9,123 | 153 | % | ||||||||||||||||||
Services | 12,669 | 9,527 | 3,142 | 33 | % | ||||||||||||||||||
Total Restaurant Retail | $ | 51,124 | $ | 27,633 | $ | 23,491 | 85 | % | |||||||||||||||
Government | |||||||||||||||||||||||
Intelligence, Surveillance, and Reconnaissance | $ | 9,284 | $ | 9,741 | $ | (457) | (5) | % | |||||||||||||||
Mission Systems | 8,338 | 8,088 | 250 | 3 | % | ||||||||||||||||||
Product Services | 204 | 229 | (25) | (11) | % | ||||||||||||||||||
Total Government | $ | 17,826 | $ | 18,058 | $ | (232) | (1) | % | |||||||||||||||
Total Net Revenue | $ | 68,950 | $ | 45,691 | $ | 23,259 | 51 | % |
Six Months Ended June 30, | $ | % | |||||||||||||||||||||
(in thousands) | 2021 | 2020 | variance | variance | |||||||||||||||||||
Restaurant/Retail | |||||||||||||||||||||||
Hardware | $ | 41,190 | $ | 30,266 | $ | 10,924 | 36 | % | |||||||||||||||
Software | 22,976 | 12,921 | 10,055 | 78 | % | ||||||||||||||||||
Services | 23,542 | 21,855 | 1,687 | 8 | % | ||||||||||||||||||
Total Restaurant Retail* | $ | 87,708 | $ | 65,042 | $ | 22,666 | 35 | % | |||||||||||||||
Government | |||||||||||||||||||||||
Intelligence, Surveillance, and Reconnaissance | $ | 18,831 | $ | 18,514 | $ | 317 | 2 | % | |||||||||||||||
Mission Systems | 16,469 | 16,535 | (66) | — | % | ||||||||||||||||||
Product Services | 409 | 332 | 77 | 23 | % | ||||||||||||||||||
Total Government | $ | 35,709 | $ | 35,381 | $ | 328 | 1 | % | |||||||||||||||
Total Net Revenue | $ | 123,417 | $ | 100,423 | $ | 22,994 | 23 | % |
(in thousands) | Payments due by period | ||||||||||||||||||||||||||||
Total | Less Than 1 Year | 1-3 Years | 4-5 Years | More Than 5 Years | |||||||||||||||||||||||||
Operating lease obligations | $ | 5,186 | $ | 1,864 | $ | 2,541 | $ | 781 | $ | — | |||||||||||||||||||
Other purchase obligations | 32,207 | 31,592 | 615 | — | — | ||||||||||||||||||||||||
Debt obligations | 367,435 | 13,519 | 40,633 | 313,283 | — | ||||||||||||||||||||||||
$ | 404,828 | $ | 46,975 | $ | 43,789 | $ | 314,064 | $ | — |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6. | Exhibits |
Exhibit Number | Incorporated by reference into this Quarterly Report on Form 10-Q | Date Filed or Furnished | ||||||||||||
Exhibit Description | Form | Exhibit No. | ||||||||||||
2.1* | Form 8-K (File No. 001-09720) | 2.1 | 4/8/2021 | |||||||||||
3.1 | 10-K | 3.1 | 3/16/2021 | |||||||||||
3.2 | 10-Q | 4.1 | 5/11/2020 | |||||||||||
10.1 | Form 8-K (File No. 001-09720) | 10.1 | 4/8/2021 | |||||||||||
10.2* | Form 8-K (File No. 001-09720) | 10.2 | 4/8/2021 | |||||||||||
10.3* | Form 8-K (File No. 001-09720) | 10.3 | 4/8/2021 | |||||||||||
10.4 | Common Stock Purchase Warrant, dated April 8, 2021, in favor of PAR Act III, LLC. of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended | Form 8-K (File No. 001-09720) | 10.7 | 4/8/2021 | ||||||||||
10.5 | S-8 (File No. 333-255214) | 99.1 | 4/13/2021 | |||||||||||
10.6 | S-8 (File No. 333-255214) | 99.2 | 4/13/2021 | |||||||||||
10.7 | S-8 (File No. 333-255214) | 99.3 | 4/13/2021 | |||||||||||
10.8 | S-8 (File No. 333-255214) | 99.4 | 4/13/2021 | |||||||||||
10.9 | S-8 (File No. 333-256915) | 99.5 | 6/9/2021 | |||||||||||
31.1 | Filed herewith | |||||||||||||
31.2 | Filed herewith | |||||||||||||
32.1 | Furnished herewith | |||||||||||||
32.2 | Furnished herewith | |||||||||||||
101.INS | XBRL Instance Document | Filed herewith | ||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | ||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | Filed herewith |
PAR TECHNOLOGY CORPORATION | ||||||||
(Registrant) | ||||||||
Date: | August 9, 2021 | /s/ Bryan A. Menar | ||||||
Bryan A. Menar | ||||||||
Chief Financial and Accounting Officer | ||||||||
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of PAR Technology Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 9, 2021 | /s/ Savneet Singh | ||||
Savneet Singh | |||||
Chief Executive Officer & President | |||||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of PAR Technology Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 9, 2021 | /s/ Bryan A. Menar | ||||
Bryan A. Menar | |||||
Chief Financial and Accounting Officer | |||||
(Principal Financial Officer) |
(i) | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 9, 2021 | ||
/s/ Savneet Singh | ||
Savneet Singh | ||
Chief Executive Officer & President | ||
(Principal Executive Officer) |
(i) | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 9, 2021 | ||
/s/ Bryan A. Menar | ||
Bryan A. Menar | ||
Chief Financial and Accounting Officer | ||
(Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Shareholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock per value (in dollars per share) | $ 0.02 | $ 0.02 |
Common stock authorized (in shares) | 58,000,000 | 58,000,000 |
Common stock issued (in shares) | 26,998,216 | 22,982,955 |
Common stock outstanding (in shares) | 25,848,889 | 21,917,357 |
Treasury stock at cost (in shares) | 1,149,327 | 1,065,598 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Net revenues: | ||||
Revenue | $ 68,950 | $ 45,691 | $ 123,417 | $ 100,423 |
Costs of sales: | ||||
Cost of sales | 53,847 | 36,612 | 98,114 | 80,297 |
Gross margin | 15,103 | 9,079 | 25,303 | 20,126 |
Operating expenses: | ||||
Selling, general and administrative | 22,946 | 10,049 | 37,483 | 21,476 |
Research and development | 8,643 | 4,538 | 14,452 | 9,403 |
Amortization of identifiable intangible assets | 489 | 210 | 764 | 420 |
Gain on insurance proceeds | 0 | 0 | (4,400) | 0 |
Operating expenses | 32,078 | 14,797 | 48,299 | 31,299 |
Operating loss | (16,975) | (5,718) | (22,996) | (11,173) |
Other expense – net | (341) | (139) | (392) | (764) |
Loss on extinguishment of debt | 0 | 0 | 0 | (8,123) |
Interest expense – net | (4,937) | (2,111) | (7,097) | (4,083) |
Loss before provision for income taxes | (22,253) | (7,968) | (30,485) | (24,143) |
Benefit from (provision for) income taxes | 12,297 | (1,008) | 12,258 | 4,257 |
Net loss | $ (9,956) | $ (8,976) | $ (18,227) | $ (19,886) |
Net loss per share, basic (in dollars per share) | $ (0.39) | $ (0.49) | $ (0.77) | $ (1.10) |
Net loss per share, diluted (in dollars per share) | $ (0.39) | $ (0.49) | $ (0.77) | $ (1.10) |
Weighted average shares outstanding, basic (in shares) | 25,484 | 18,244 | 23,716 | 18,092 |
Weighted average shares outstanding, diluted (in shares) | 25,484 | 18,244 | 23,716 | 18,092 |
Product | ||||
Net revenues: | ||||
Revenue | $ 23,939 | $ 12,333 | $ 42,495 | $ 30,967 |
Costs of sales: | ||||
Cost of sales | 18,487 | 9,982 | 33,372 | 24,887 |
Service | ||||
Net revenues: | ||||
Revenue | 27,185 | 15,300 | 45,213 | 34,075 |
Costs of sales: | ||||
Cost of sales | 18,940 | 9,912 | 31,635 | 22,558 |
Contract | ||||
Net revenues: | ||||
Revenue | 17,826 | 18,058 | 35,709 | 35,381 |
Costs of sales: | ||||
Cost of sales | $ 16,420 | $ 16,718 | $ 33,107 | $ 32,852 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (9,956) | $ (8,976) | $ (18,227) | $ (19,886) |
Other comprehensive income loss, net of applicable tax: | ||||
Foreign currency translation adjustments | 355 | 158 | 53 | 359 |
Comprehensive loss | $ (9,601) | $ (8,818) | $ (18,174) | $ (19,527) |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Payments for common stock issuance costs | $ 4,300 | $ 4,314 | $ 0 | |
Convertible Notes | Convertible Senior Notes due 2024 | ||||
Convertible notes conversion discount, taxes | $ 1,800 | |||
Issuance cost, equity component | 1,100 | 1,100 | ||
Convertible Notes | Convertible Senior Notes Due 2026 | ||||
Convertible notes conversion discount, taxes | 6,200 | $ 4,400 | ||
Issuance cost, equity component | $ 900 | $ 900 | $ 900 |
Basis of Presentation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements (“financial statements”) of PAR Technology Corporation through its consolidated subsidiaries (collectively, the “Company”, “PAR”, “we”, “us” or “our Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements as promulgated by the Securities and Exchange Commission (“SEC”). In the opinion of management, the Company's financial statements include all normal and recurring adjustments necessary in order to make the financial statements not misleading and to provide a fair presentation of the Company's financial results for the interim period included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (this “Quarterly Report”). Interim results are not necessarily indicative of results for the full year or any future periods. The information included in this Quarterly Report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 16, 2021 (“2020 Annual Report”). The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, the measurement of liabilities and equity recognized for outstanding convertible notes, valuation allowances for receivables, inventories, and measurement of contingent consideration at fair value. Actual results could differ from these estimates. The Company's estimates are subject to uncertainties, including those associated with the ongoing COVID-19 pandemic, which cannot be predicted. There can be no assurance that the COVID-19 pandemic will not have a material adverse effect on the Company's estimates. The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail segment provides point-of-sale (“POS”) software and hardware, loyalty software, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. The financial statements also include corporate operations, which are comprised of enterprise-wide functional departments. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a remaining maturity of three months or less, to be cash equivalents, including money market funds. The Company maintained bank balances that, at times, exceeded the federally insured limit during the six months ended June 30, 2021. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts. Cash and cash equivalents consist of the following (in thousands):
Gain on Insurance Proceeds During the first quarter of 2021, the Company received $4.4 million of insurance proceeds in connection with the settlement of a legacy claim; there were no additional insurance proceeds were received during the three months ended June 30, 2021. Other Long-Term Liabilities Other long-term liabilities represent amounts owed to employees that participate in the Company’s deferred compensation plan and the long-term portion of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) deferred payroll taxes. The amount owed to employees participating in the deferred compensation plan was $2.8 million at June 30, 2021 and December 31, 2020. Additionally, indemnification and net deferred tax liabilities resulting from the Punchh Acquisition of approximately $6.0 million and $2.5 million, respectively, are presented within other long-term liabilities. (See “Note 3 — Acquisition” for additional information.) Under the CARES Act employers can defer payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. As permitted under the CARES Act, the Company deferred payment of the employer portion of social security taxes through the end of 2020. As of June 30, 2021 and December 31, 2020, the Company deferred a total of $2.8 million of payroll taxes during 2020, to be paid equally in the fourth quarters of 2021 and 2022. The current portion of the deferred payroll taxes was $1.4 million at June 30, 2021 and December 31, 2020 and was included within accrued salaries and benefits and $1.4 million in other long-term liabilities on the consolidated balance sheet. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various requirements related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021, and the application of the standard had no material impact on the Company's financial statements for the six months ended June 30, 2021. Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to reduce the number of accounting models for convertible debt instruments and convertible preferred stock, and amend guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company is currently assessing the impact of this standard on its financial statements. With the exception of the standards discussed above, there were no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended June 30, 2021 that are of significance or potential significance to the Company.
|
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company's revenue is derived from software as a service (“SaaS”), hardware and software sales, software activation, hardware support, installations, maintenance and professional services. Accounting Standards Codification (“ASC”) Topic 606: Revenue from Contracts with Customers requires the Company to distinguish and measure performance obligations under customer contracts. Contract consideration is allocated to all performance obligations within the arrangement or contract. Performance obligations that are determined not to be distinct are combined with other performance obligations until the combined unit is determined to be distinct and that combined unit is then recognized as revenue over time or at a point in time depending on when control is transferred. The Company evaluated the potential performance obligations within its Restaurant/Retail segment and evaluated whether each performance obligation met the ASC Topic 606 criteria to be considered a distinct performance obligation. Revenue in the Restaurant/Retail segment is recognized at a point in time for software, hardware and installations. Revenue on these items are recognized when the customer obtains control of the asset. This generally occurs upon delivery and acceptance by the customer or upon installation or delivery to a third party carrier for onward delivery to customer. Additionally, revenue in the Restaurant/Retail segment relating to SaaS, the Company's Advanced Exchange hardware service program, its on-site support and other services is recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance obligations. The Company’s support services are stand-ready obligations that are provided over the life of the contract, generally 12 months. The Company offers installation services to its customers for hardware and software for which the Company primarily hires third-party contractors to install the equipment on the Company's behalf. The Company pays third party contractors an installation service fee based on an hourly rate agreed to by the Company and contractor. When third party installers are used, the Company determines whether the nature of its performance obligations is to provide the specified goods or services itself (principal) or to arrange for a third-party to provide the goods or services (agent). In the Company's customer arrangements, the Company is primarily responsible for providing a good or service, has inventory risk before the good or service is transferred to the customer, and discretion in establishing prices; as a result, the Company has concluded that it is the principal in the arrangement and records installation revenue on a gross basis. The support services associated with hardware and software sales are “stand-ready obligations” satisfied over time on the basis that the customer consumes and receives a benefit from having access to the Company's support resources, when and as needed, throughout the contract term. For this reason, the support services are recognized ratably over the contract term since the Company satisfies its obligation to stand ready by performing these services each day. Contracts typically require payment within 30 to 90 days from the shipping date or installation date, depending on the Company's terms with the customer. The primary method used to estimate a stand-alone selling price, is the price that the Company charges for the particular good or service sold by the Company separately under similar circumstances to similar customers. The Company determines stand-alone selling prices as follows: hardware, software and software activation (one-time fee at the initial offering of software or SaaS) performance obligations are recognized at a stand-alone selling price based on the price at which the Company sells the particular good or service separately in similar circumstances and to similar customers. The stand-alone selling price for all other performance obligations, including: pass-through hardware, such as terminals, printers, or card readers; hardware support (referred to as Advanced Exchange), installation, maintenance, software upgrades, and professional services (project management) is recognized by using an expected cost plus margin. The Company's revenue in the Government segment is recognized over time as control is generally transferred continuously to its customers. Revenue generated by the Government segment is predominantly related to services; provided, however, revenue is also generated through the sale of materials, software, hardware, and maintenance. For the Government segment cost plus fixed fee contract portfolio, revenue is recognized over time using costs incurred to date to measure progress toward satisfying the Company's performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and general and administrative expenses. Profit is recognized on the fixed fee portion of the contract as costs are incurred and invoiced. Long-term fixed price contracts involve the use of judgment to estimate the total contract revenue and costs. For long-term fixed price contracts, the Company estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete the contract, and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include: labor productivity and availability; the complexity of the work to be performed; and the performance of subcontractors. Revenue and profit in future periods of contract performance are recognized using the aforesaid assumptions, and adjusting the estimate of costs to complete a contract. Once the services provided are determined to be distinct or not distinct, the Company evaluates how to allocate the transaction price. Generally, the Government segment does not sell the same good or service to similar customers and the contract performance obligations are unique to each government solicitation. The performance obligations are typically not distinct. In cases where there are distinct performance obligations, the transaction price would be allocated to each performance obligation on a ratable basis based upon the stand-alone selling price of each performance obligation. Cost plus margin is used for the cost plus fixed fee contract portfolios as well as the fixed price and time and materials contracts portfolios to determine the stand-alone selling price. In the Government segment, when determining revenue recognition, the Company analyzes whether its performance obligations under Government contracts are satisfied over a period of time or at a point in time. In general, the Company's performance obligations are satisfied over a period of time; however, there may be circumstances where the latter or both scenarios could apply to a contract. The Company usually expects payment within 30 to 90 days from satisfaction of its performance obligation. None of the Company's contracts as of June 30, 2021 or June 30, 2020 contained a significant financing component. Performance Obligations Outstanding The Company's performance obligations outstanding represent the transaction price of firm, non-cancellable orders, with expected delivery dates to customers after June 30, 2021 and 2020, respectively, for work that has not yet been performed. The activity of outstanding performance obligations as it relates to customer deposits and deferred service revenue is as follows:
The above table excludes customer deposits of $1.7 million and $1.5 million for the six months ended June 30, 2021 and 2020, respectively. The majority of the deferred revenue balances above relate to professional services, maintenance agreements, and software licenses. These balances are recognized on a straight-line basis over the life of the contract, with the majority of the balance to be recognized within the next twelve months. In the Restaurant/Retail segment most performance obligations relate to service and support contracts, approximately 71% of which the Company expects to fulfill within one year. The Company expects to fulfill 100% of support and service contracts within 60 months. At June 30, 2021 and December 31, 2020, transaction prices allocated to future performance obligations were $18.1 million and $11.1 million, respectively. During the three months ended June 30, 2021 and 2020, the Company recognized revenue of $8.8 million and $3.6 million, respectively, which are included in contract liabilities at the beginning of each such period. During the six months ended June 30, 2021 and 2020, the Company recognized revenue of $11.4 million and $7.7 million, respectively, which are included in contract liabilities at the beginning of each such period. In the Government segment, the value of existing contracts at June 30, 2021, net of amounts relating to work performed to that date, was approximately $141.2 million, of which $32.1 million was funded, and at December 31, 2020, net of amounts relating to work performed to that date, was approximately $150.5 million, of which $27.8 million was funded. The value of existing contracts in the Government segment, net of amounts relating to work performed at June 30, 2021, are expected to be recognized as revenue over time as follows (in thousands):
Disaggregated Revenue The Company disaggregates revenue from contracts with customers by major product line for each of its reporting segments because the Company believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregation of revenue is as follows (in thousands):
The Company has reclassified the prior year information in the above table to conform to the current year presentation; Restaurant/Retail of $27.6 million is presented across hardware, software and service, and ISR solutions of $9.9 million is presented across ISR solutions and product.
The Company has reclassified the prior year information in the above table to conform to the current year presentation; Restaurant/Retail of $65.0 million is presented across hardware, software and service, and ISR solutions of $18.8 million is presented across ISR solutions and product. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred because the amortization period would be less than one year or the total amount of commissions is immaterial. Commissions are recorded in selling, general and administrative expenses. The Company elected to exclude from the transaction price measurement, all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (for example, sales, use, value added, and some excise taxes).
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Acquisition |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition On April 8, 2021 (the “Closing Date”), the Company, ParTech, Inc., and Sliver Merger Sub, Inc., a wholly owned subsidiary of ParTech, Inc. (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Punchh Inc. (“Punchh”), and Fortis Advisors LLC, solely in its capacity as the initial Stockholder Representative. Pursuant to the Merger Agreement, on April 8, 2021, Merger Sub merged with and into Punchh (the “Merger”), with Punchh surviving the Merger and becoming a wholly owned subsidiary of the Company (“Punchh Acquisition”). Punchh is a leader in SaaS-based customer loyalty and engagement solutions. With this acquisition, the Company offers its customers a unified commerce cloud platform with Brink POS cloud software for front-of-house, Data Central for back-office cloud software, PAR Pay and PAR Payment Services for payment solutions, and Punchh for loyalty and engagement software. In connection with the Merger, the Company paid former Punchh equity holders approximately $509.6 million (including holders of vested options and warrants) consisting of approximately (i) $400.9 million in cash (the “Cash Consideration”), and (ii) 1,493,130 shares of the Company's common stock, in each case subject to certain adjustments (including customary adjustments for Punchh cash, debt, debt-like items, and net working capital at closing) for 100% of the equity interests in Punchh. An additional 101,072 shares of the Company's common stock are reserved for options granted as replacement awards for fully vested unexercised awards assumed in connection with the Merger. Further, the Company incurred acquisition related expenses of approximately $3.4 million. Consideration for total common shares issued and reserved of 1,594,202 was determined using a fair value share price of $68.00 (“Equity Consideration”), representing total Equity Consideration of $108.7 million. Approximately $1.1 million of the Cash Consideration had not yet settled as of June 30, 2021. In connection with, and to partially fund the Cash Consideration for, the Merger, on April 8, 2021, the Company, together with certain of its U.S. Subsidiaries, as guarantors, entered into a credit agreement with the lenders party thereto, and Owl Rock First Lien Master Fund, L.P., as administrative agent and collateral agent (the “Owl Rock Credit Agreement”), that provides for a term loan in an initial aggregate principal amount of $180.0 million; and (ii) securities purchase agreements (the “Purchase Agreements”) with each of PAR Act III, LLC (“Act III”), and certain funds and accounts advised by T. Rowe Price Associates, Inc., acting as investment adviser (such funds and accounts being collectively referred to herein as “TRP”), to raise approximately $160.0 million through a private placement of the Company's common stock. The Company also issued to Act III a warrant (the “Warrant”) to purchase 500,000 shares of the Company's common stock with an exercise price of $76.50 per share and five year exercise period. Additionally, on the Closing Date approximately $6.0 million of the Cash Consideration was deposited into a third party escrow fund, to be held for up to 18-months following the Closing Date, to fund (i) potential payment obligations of Punchh equity holders with respect to post-closing adjustments to the Cash and Equity Consideration and (ii) potential post-closing indemnification obligations of Punchh equity holders, in each case in accordance with the terms of the Merger Agreement. The Company recognized indemnification assets and liabilities of approximately $6.0 million to other assets and other long-term liabilities, respectively, to account for amounts deposited into the third party escrow fund. Allocation of Acquisition Consideration The Punchh Acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, assets acquired and liabilities assumed in the Punchh Acquisition were accounted for at their preliminarily determined respective fair values as of April 8, 2021. The preliminary fair value determinations were based on management's best estimates and assumptions, and through the use of independent valuation and tax consultants. Identified preliminary fair values are subject to measurement period adjustments within the permitted measurement period (up to one year from the acquisition date) as independent consultants finalize their procedures and net working capital adjustments are agreed upon and settled. The following table presents management's preliminary purchase price allocation:
Intangible Assets The Company identified three acquired intangible assets in the Punchh Acquisition: developed technology; customer relationships; and, the Punchh trade name. The preliminary fair value of developed technology and customer relationship intangible assets were determined utilizing the “multi-period excess earnings method”, which is predicated upon the calculation of the net present value of after-tax net cash flows respectively attributable to each asset. The preliminary fair value of the Punchh trade name intangible was determined utilizing the “relief from royalty” approach, which is a form of the income approach that attributes savings incurred from not having to pay a royalty for the use of an asset. The estimated useful life of these identifiable intangible assets was preliminarily determined to be indefinite for the Punchh trade name and seven years for both the developed technology and customer relationships intangible assets. Goodwill Goodwill represents the excess of consideration transferred for the fair value of net identifiable assets acquired and is tested for impairment at least annually. It is not deductible for income tax purposes. Deferred Revenue Deferred revenue acquired in the Punchh Acquisition was fair valued to determined allocation of consideration transferred to assume the liability. The preliminary fair value was determined utilizing the “bottom-up” approach, which is a form of the income approach that measures the liability as the direct, incremental costs to fulfill the legal obligation, plus a reasonable profit margin for the services being delivered. Loans Payable Loan liabilities assumed in the Punchh Acquisition were primarily comprised of Punchh's $3.3 million CARES Act Paycheck Protection Program loan. The Company extinguished all assumed loan payables, including the assumed CARES Act loan, through repayment of the loans on the Closing Date. Right-of-Use Lease Assets and Liabilities The Company assumed real property leases in the Punchh Acquisition related to office space in California, Texas and India and have accounted for these leases as Operating Leases in accordance with ASC 842, Leases. The assumed leases have lease terms that run through 2021 to 2026. Valuation specialists were utilized by the Company to appraise the assumed leases against competitive market rates to determine the fair value of the lease liabilities assumed, which identified a $0.3 million unfavorable lease liability that the Company recognized as part of the lease right of use asset. The income approach was applied to value the identified unfavorable lease liability. Deferred Taxes The Company determined the deferred tax position to be recorded at the time of the Punchh Acquisition in accordance with ASC 740, Income Taxes, resulting in recognition of deferred tax liabilities for future reversing of taxable temporary differences primarily for intangible assets and deferred tax assets primarily relating to net operating losses as of the Closing Date. A valuation allowance was also recorded against certain recognized deferred tax assets based on an evaluation of the realizability of the identified assets. These recognized deferred tax assets, liabilities and valuation allowance resulted in a preliminary net deferred tax liability of $14.9 million relating to the Punchh Acquisition. The net deferred tax liability relating to the Punchh Acquisition was determined by the Company to provide future taxable temporary differences that allow for the Company to utilize certain previously fully reserved deferred tax assets. Accordingly, the Company recognized a reduction to its valuation allowance in the three months ended June 30, 2021, resulting in a net tax benefit of $12.4 million for the period. Unaudited Pro Forma Financial Information For the three and six months ended June 30, 2021, the Punchh Acquisition resulted in additional revenues of $8.1 million. The Company determined it impractical to report net loss for the Punchh Acquisition for the three and six months ended June 30, 2021. The unaudited pro forma results of operations are not necessarily indicative of the results that would have occurred had the Punchh Acquisition been consummated at the beginning of the periods presented, nor are they necessarily indicative of any future consolidated operating results. The following table summarizes the Company's unaudited pro forma operating results:
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net | Accounts Receivable, Net The Company’s net accounts receivables consists of (in thousands):
At June 30, 2021 and December 31, 2020, the Company had current, expected credit loss of $1.9 million and $1.4 million, respectively, against accounts receivable for the Restaurant/Retail segment. Changes in the current, expected credit loss were as follows:
Accounts receivables recorded as of June 30, 2021 and December 31, 2020 represent unconditional rights to payments from customers.
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, Net Inventories are used in the manufacture and service of Restaurant/Retail products. The components of inventory, net of reserves, consisted of the following:
At June 30, 2021 and December 31, 2020, the Company had excess and obsolescence reserves of $12.4 million and $12.0 million, respectively, against inventories.
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Identifiable Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identifiable Intangible Assets and Goodwill | Identifiable Intangible Assets and Goodwill The Company's identifiable intangible assets represent intangible assets acquired from acquisitions and software development costs. The Company capitalizes certain costs related to the development of its software platform and other software applications for internal use in accordance with ASC Topic 350-40, Intangibles - Goodwill and Other - Internal - Use Software. The Company begins to capitalize its costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. The Company stops capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be to five years. The Company also capitalizes costs related to specific upgrades and enhancements, when it is probable the expenditure will result in additional functionality, and expense costs incurred for maintenance and minor upgrades and enhancements. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded within research and development expenses in the Company's consolidated statements of operations. The Company exercises judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. To the extent the Company can change the manner in which new features and functionalities are developed and tested related to its software platform, assessing the ongoing value of capitalized assets or determining the estimated useful lives over which the costs are amortized, the amount of internal-use software development costs the Company capitalizes and amortizes could change in future periods. Included in identifiable intangible assets are approximately $3.0 million and $6.5 million of costs related to software products that have not satisfied the general release threshold as of June 30, 2021 and December 31, 2020, respectively. These software products will be ready for their intended use within the next 12 months. Software costs placed into service during the three months ended June 30, 2021 and 2020 were $2.7 million and $2.6 million, respectively. Software costs placed into service during the six months ended June 30, 2021 and 2020 were $7.5 million and $4.3 million, respectively. Annual amortization charged to cost of sales is computed using the straight-line method over the remaining estimated economic life of the product, generally to five years. Amortization of capitalized software development costs for the three months ended June 30, 2021 and 2020 were $5.0 million and $1.5 million, respectively. Amortization of capitalized software development costs for the six months ended June 30, 2021 and 2020 were $7.0 million and $3.1 million, respectively. The components of identifiable intangible assets are:
The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles, excluding software costs not meeting the general release threshold, is as follows (in thousands):
The Company operates in two reporting segments, Restaurant/Retail and Government, are also the Company's identified reporting units for purposes of evaluating goodwill impairment. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment of goodwill. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded; once assigned, goodwill no longer retains its association with a particular acquisition and all of the activities within the reporting unit, whether acquired organically or from a third-party, are available to support the value of the goodwill. Goodwill carried by the Restaurant/Retail and Government segments is as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Convertible Senior Notes On April 15, 2019, the Company sold $80.0 million in aggregate principal amount of 4.500% Convertible Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were sold pursuant to an indenture, dated April 15, 2019, between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “2024 Indenture”). The 2024 Notes pay interest at a rate equal to 4.500% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2019. Interest accrues on the 2024 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from April 15, 2019. Unless earlier converted, redeemed or repurchased, the 2024 Notes mature on April 15, 2024. On February 10, 2020, the Company sold $120.0 million in aggregate principal amount of 2.875% Convertible Senior Notes due 2026 (the “2026 Notes” and, together with the 2024 Notes, the “Notes”). The 2026 Notes were sold pursuant to an indenture, dated February 10, 2020 (the “2026 Indenture” and, together with the 2024 Indenture, the “Indentures”), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee. The 2026 Notes pay interest at a rate equal to 2.875% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2020. Interest accrues on the 2026 Notes from the last date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from February 10, 2020. Unless earlier converted, redeemed or repurchased, the 2026 Notes mature on April 15, 2026. The Company used approximately $66.3 million (excluding cash payments relating to accrued interest and fractional shares) from its sale of the 2026 Notes and issued 722,423 shares of common stock at $32.43 per share out of treasury stock with an average cost basis of $3.37 per share to repurchase approximately $66.3 million in aggregate principal amount of the 2024 Notes through individually negotiated transactions. Of the total price paid for the 2024 Notes, $59.0 million was allocated to the 2024 Notes settlement, $30.8 million was allocated to equity, and $1.0 million was used to pay off accrued interest on the 2024 Notes. The consideration transferred was allocated to the liability and equity components of the 2024 Notes using the equivalent rate that reflected the borrowing rate for a similar non-convertible debt instrument immediately prior to settlement. The transaction resulted in a loss on settlement of convertible notes of $8.1 million, which is recorded as a Loss on extinguishment of debt in the Company’s unaudited interim condensed consolidated statements of operations. The loss represents the difference between (i) the fair value of the liability component and (ii) the sum of the carrying value of the debt component and any unamortized debt issuance costs at the time of settlement. The carrying amount of the liability component was calculated by estimating the fair value of similar notes that do not have associated convertible features. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the fair value amount of the Notes. The valuation model used in determining the fair value of the liability component for the Notes includes inputs, such as the implied debt yield within the nonconvertible borrowing rate. The implied estimated effective rate of the liability component of the 2024 Notes and 2026 Notes was 10.2% and 7.3%, respectively. The Notes are senior, unsecured obligations of the Company. The 2024 Notes and the 2026 Notes are convertible, in whole or in part, at the option of the holder, upon the occurrence of specified events or certain fundamental changes set forth in the Indentures prior to the close of business on the business day immediately preceding October 15, 2023 and October 15, 2025, respectively; and, thereafter, at any time until the close of business on the second business day immediately preceding maturity. The 2024 Notes are convertible into Company common stock at an initial conversion rate of 35.0217 shares per $1,000 principal amount and the 2026 Notes are convertible into Company common stock at an initial conversion rate of 23.2722 shares per $1,000 principal amount. Upon conversion, the Company may elect to settle by paying or delivering either solely cash, shares of Company common stock or a combination of cash and shares of Company common stock. In accordance with ASC Topic 470-20 Debt with Conversion and Other Options — Beneficial Conversion Features, the initial measurement of the 2024 Notes at fair value resulted in a liability of $62.4 million and as such, the calculated discount resulted in an implied value of the convertible feature recognized in additional paid in capital of $17.6 million; and the initial measurement of the 2026 Notes at fair value resulted in a liability of $93.8 million and as such, the calculated discount resulted in an implied value of the convertible feature recognized in additional paid in capital of $26.2 million. Issuance costs for the Notes amounted to $4.9 million and $4.2 million for the 2024 Notes and 2026 Notes, respectively. These costs were allocated to debt and equity components on a ratable basis. For the 2024 Notes this amounted to $3.8 million and $1.1 million to the debt and equity components, respectively. For the 2026 Notes this amounted to $3.3 million and $0.9 million to the debt and equity components, respectively. The Indentures contain covenants that, among other things, restrict the Company’s ability to merge, consolidate or sell, or otherwise dispose of, substantially all of its assets and customary Events of Default (as defined in the Indentures). In connection with the sale of the 2026 Notes, the Company recorded an income tax benefit of $4.4 million in the first six months of 2020 as a result of the creation of a deferred tax liability associated with the portion of the 2026 Notes that was classified within shareholders' equity. While GAAP requires the offset of the deferred tax liability to be recorded in additional paid in capital, consistent with the equity portion of the 2026 Notes, the creation of the deferred tax liability produced evidence of recoverability of the Company's net deferred tax assets which resulted in the release of a valuation allowance, totaling $4.4 million, reflected as an income tax benefit in the first six months of 2020. Credit Facility In connection with, and to partially fund the Cash Consideration for the Punchh Acquisition, on April 8, 2021, the Company entered into the Owl Rock Credit Agreement. The Owl Rock Credit Agreement provides for a term loan in the initial aggregate principal amount of $180.0 million (the “Credit Facility” and, the loans thereunder, the “Term Loan”). Issuance costs, which included a 2% Original Issue Discount, amounted to $9.3 million with net proceeds amounting to $170.7 million. The Credit Facility may be increased by up to $25.0 million, plus an additional unlimited amount subject to compliance with a first lien net annual recurring revenue leverage ratio test of 2.10 to 1.00. The Term Loan matures on April 8, 2025 and bear interest at a rate equal to either a base rate plus a margin of 3.75% or a Eurocurrency rate plus a margin of 4.75%, as selected by the Company. Voluntary prepayments of the Term Loan, as well as certain mandatory prepayments of the Term Loan, require payment of a prepayment premium of 2.0% during the first year of the Credit Facility and 1.0% during the second and third year of the Credit Facility. The Term Loan is secured by a first lien on substantially all of the Company's and the subsidiary guarantors' assets. Under the Owl Rock Credit Agreement, the Company is required to maintain liquidity of at least $20.0 million and a first lien net annual recurring revenue leverage ratio of no greater than the level set forth in the Credit Facility for the relevant quarter, which starts at 2.60 to 1.00 and declines over time to 1.30 to 1.00. The Owl Rock Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including covenants that restrict the Company and certain of its subsidiaries ability to incur additional indebtedness, incur or permit to exist liens on assets, make investments and acquisitions, consolidate or merge, engage in asset sales and pay dividends, of which the Company was in compliance for the three months ended June 30, 2021. Obligations under the Owl Rock Credit Agreement may be accelerated upon certain customary events of default (subject to grace or cure periods, as appropriate). The following table summarizes information about the net carrying amounts of the Notes and the Credit Facility as of June 30, 2021:
The following tables summarizes interest expense recognized on the Notes and on the Credit Facility:
In connection with the acquisition of AccSys, LLC (otherwise known as “Restaurant Magic”) in December 2019, the Company entered into a $2.0 million subordinated promissory note. The note bears interest at 5.75% per annum, with monthly payments of principal and interest in the amount of $60.6 thousand payable beginning January 15, 2020 through maturity on December 15, 2022. As of June 30, 2021, the outstanding balance of the subordinated promissory note was $1.0 million of which $0.7 million was in the current portion of long-term debt. The following table summarizes the future principal payments as of June 30, 2021 (in thousands):
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Common Stock |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock In connection with, and to partially fund the Cash Consideration of the Punchh Acquisition, on April 8, 2021, the Company entered into the Purchase Agreements with Act III and TRP to raise approximately $160.0 million through a private placement of the Company's common stock. Pursuant to the Purchase Agreements, the Company issued and sold (i) 73,530 shares of its common stock to Act III for a gross purchase price of approximately $5.0 million ($68.00 per share), and (ii) 2,279,412 shares of common stock to TRP for a gross purchase price of approximately $155.0 million ($68.00 per share) for an aggregate of 2,352,942 shares. The Company incurred $4.3 million of issuance costs in connection with the sale of its common stock. The Company also issued to Act III a warrant to purchase 500,000 shares of common stock with an exercise price of $76.50 per share and year exercise period (the “Warrant”). The Warrant is accounted for as an equity instrument pursuant to ASC 815, Derivatives and Hedging, due to the Warrant contractually permitting only settlement in non-redeemable common shares upon exercise. Issuance date fair value of the Warrant was determined to be $14.3 million based on using the Black-Scholes model with the following assumptions:
The Company also issued 1,493,130 of its common stock as part of the Equity Consideration of the Punchh Acquisition. See “Note 3 — Acquisition” for additional information about the Punchh Acquisition. On October 5, 2020, the Company completed an underwritten public offering (the “Secondary Offering”) of 3,350,000 shares of common stock at a price to the public of $38.00 per share, resulting in $121.8 million of proceeds, net of underwriting discounts and commissions and offering expenses payable by the Company. In connection with the Secondary Offering, the Company granted Jeffries LLC, the underwriter of the offering, a 30 day option to purchase up to an additional 502,500 shares of common stock at the same public offering price, less underwriting discounts and commissions. On November 3, 2020, Jeffries, LLC partially exercised its option and purchased 266,022 shares of common stock, resulting in an additional $9.6 million of proceeds, net of underwriting discounts and commissions and offering expenses payable by the Company.
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Stock Based Compensation |
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Stock Based Compensation | Stock-Based Compensation The Company applies the fair value recognition provisions of ASC Topic 718: Stock Compensation. Stock-based compensation expense, net of forfeitures of $64.0 thousand and $27.0 thousand for the three months ended June 30, 2021 and 2020, respectively, and stock-based compensation expense, net of forfeitures of $107.0 thousand and $32.0 thousand for six months ended June 30, 2021 and 2020, respectively, was recorded in the following line items in the condensed consolidated statements of operations for the three and six months ended June 30:
At June 30, 2021, the aggregate unrecognized compensation expense related to unvested equity awards was $39.2 million, which is expected to be recognized as compensation expense in fiscal years 2021 through 2024. A summary of stock option activity for the six months ended June 30, 2021 is below:
The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the six months ended June 30, 2021:
A summary of unvested restricted stock activity for the six months ended June 30, 2021 is below:
A summary of unvested restricted stock units (“RSU”) activity for the six months ended June 30, 2021 is below:
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Earnings per share is calculated in accordance with ASC Topic 260: Earnings per Share, which specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”). It requires the presentation of basic and diluted EPS. Basic EPS excludes all dilution and is based upon the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that would occur if convertible securities or other contracts to issue common stock were exercised. At June 30, 2021, there were 1,403,000 anti-dilutive stock options outstanding compared to 928,000 as of June 30, 2020. At June 30, 2021 there were 457,000 anti-dilutive restricted stock units compared to 427,000 as of June 30, 2020. The potential effects of 2024 Notes and 2026 Notes conversion features were excluded from the diluted net loss per share as of June 30, 2021 and 2020. Potential shares from 2024 Notes and 2026 Notes conversion features at respective maximum conversion rates of 46.4037 per share and 30.8356 per share are approximately 638,051 and 3,700,272, respectively. See “Note 7 — Debt” for additional information about the Notes. As discussed in “Note 3 — Acquisition”, the Company issued to Act III a Warrant to purchase 500,000 shares of common stock with an exercise price of $76.50 per share and were excluded from the diluted net loss per share as of June 30, 2021 due to their anti-dilutive impact.
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Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies From time to time, the Company is party to legal proceedings arising in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. Based on information currently available, and based on its evaluation of such information, the Company believes the legal proceedings in which it is currently involved are not material or are not likely to result in a material adverse effect on the Company’s business, financial condition or results of operations, or cannot currently be estimated. On March 21, 2019, Kandice Neals on behalf of herself and others similarly situated (the “Neals Plaintiff”) filed a complaint against PAR Technology Corporation in the Circuit Court of Cook County, Illinois County Department, Chancery Division. The complaint asserted that PAR Technology Corporation violated the Illinois Biometric Information Privacy Act in the alleged collection, use, and storage of her and others' biometric data derived from fingerprint scans taken for authentication purposes on point-of-sale systems. The lawsuit was removed to the Federal District Court for the Northern District of Illinois (the “District Court”) and was subsequently dismissed on December 19, 2019 without prejudice. On January 15, 2020, the Neals Plaintiff filed an amended complaint against ParTech, Inc. with the District Court. On January 29, 2020, ParTech, Inc. filed its answer and affirmative defenses to the amended complaint. The Company believes that this lawsuit is without merit. The Company’s estimated liability for this complaint is not material and related contingencies are not expected to have a material effect on the Company’s financial statements. In 2016, the Company's Audit Committee commenced an internal investigation into conduct at the Company's China and Singapore offices and voluntarily notified the SEC and the U.S. Department of Justice (“DOJ”) of the internal investigation. Following the conclusion of the Audit Committee's internal investigation, the Company voluntarily reported the relevant findings of the investigation to the China and Singapore authorities. In early April 2019, the SEC notified the Company that based on current information, it did not intend to recommend an enforcement action against the Company; shortly thereafter, the DOJ advised that it did not intend to separately proceed. The Company was recently notified that the Singaporean authority has determined not to assess further penalties. The Company is unable to predict what actions the Chinese agencies might take.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Related Information | Segment and Related Information The Company is organized in two segments, Restaurant/Retail and Government. Management views the Restaurant/Retail and Government segments separately in operating its business, as the products and services are different for each segment. The Restaurant/Retail segment is a provider of software, systems and services to the restaurant and retail industries. The Restaurant/Retail segment provides multi-unit and individual restaurants, franchisees, and enterprise customers in the three major restaurant categories (fast casual, quick serve, and table service) a fully integrated cloud solution with its Brink POS cloud software and POS hardware for the front-of-house, its back-office cloud software Data Central for the back-of-house, its loyalty and customer engagement platform - Punchh, and its wireless headsets for drive-thru order taking. This segment also offers a comprehensive portfolio of services to support its customer' technology and hardware requirements before, during and after software and/or hardware deployments. The Government segment performs complex technical studies, analysis, experiments, develops innovative solutions, and provides on-site engineering in support of advanced defense, security and aerospace systems. This segment also provides expert on-site services for operating and maintaining U.S. Government-owned communication assets. Information noted as “Other” primarily relates to the Company’s corporate operations. Information as to the Company’s segments is set forth in the tables below: Information as to the Company’s segments (continued):
The following table represents assets by reporting segment.
The following table represents identifiable long-lived tangible assets by country based on the location of the assets.
The following table represents goodwill by reporting segment.
Customers comprising 10% or more of the Company’s total revenues by reporting segment are summarized as follows:
No other customer within All Others represented 10% or more of the Company’s total revenue for the three and six months ended June 30, 2021 or 2020.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques. The fair value hierarchy is based upon three levels of input, which are: Level 1 — quoted prices in active markets for identical assets or liabilities (observable) Level 2 — inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable) Level 3 — unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable) The Company’s financial instruments primarily consist of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. The carrying amounts of cash and cash equivalents, trade receivables and trade payables as of June 30, 2021 and December 31, 2020 were considered representative of their fair values. The estimated fair value of the 2024 Notes and 2026 Notes at June 30, 2021 was $33.7 million and $217.5 million, respectively. The valuation techniques used to determine the fair value of the 2024 Notes and the 2026 Notes are classified within Level 2 of the fair value hierarchy. The estimated fair value of the Owl Rock Credit Agreement at June 30, 2021 was $177.1 million. The valuation techniques used to determine the fair value of the Owl Rock Credit Agreement are classified within Level 2 of the fair value hierarchy. The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by plan participants. The deferred compensation liabilities are classified within Level 2, the fair value classification as defined under FASB ASC Topic 820: Fair Value Measurements, because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under its deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments. The amounts owed to employees participating in the deferred compensation plan at June 30, 2021 was $2.6 million compared to $2.8 million at December 31, 2020 and is included in other long-term liabilities on the balance sheets. The Company's Level 3 contingent consideration liability had a fair value of $0 at June 30, 2021 and December 31, 2020. The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 liability for contingent consideration at June 30, 2021 and December 31, 2020.
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Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements (“financial statements”) of PAR Technology Corporation through its consolidated subsidiaries (collectively, the “Company”, “PAR”, “we”, “us” or “our Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements as promulgated by the Securities and Exchange Commission (“SEC”). In the opinion of management, the Company's financial statements include all normal and recurring adjustments necessary in order to make the financial statements not misleading and to provide a fair presentation of the Company's financial results for the interim period included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (this “Quarterly Report”). Interim results are not necessarily indicative of results for the full year or any future periods. The information included in this Quarterly Report should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 16, 2021 (“2020 Annual Report”). The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, the measurement of liabilities and equity recognized for outstanding convertible notes, valuation allowances for receivables, inventories, and measurement of contingent consideration at fair value. Actual results could differ from these estimates. The Company's estimates are subject to uncertainties, including those associated with the ongoing COVID-19 pandemic, which cannot be predicted. There can be no assurance that the COVID-19 pandemic will not have a material adverse effect on the Company's estimates.
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Segment Reporting | The Company operates in two distinct reporting segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. The Restaurant/Retail segment provides point-of-sale (“POS”) software and hardware, loyalty software, back-office software, and integrated technical solutions to the restaurant and retail industries. The Government segment provides intelligence, surveillance, and reconnaissance solutions and mission systems support to the United States Department of Defense and other Federal agencies. The financial statements also include corporate operations, which are comprised of enterprise-wide functional departments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a remaining maturity of three months or less, to be cash equivalents, including money market funds. The Company maintained bank balances that, at times, exceeded the federally insured limit during the six months ended June 30, 2021. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts.
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Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various requirements related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective January 1, 2021, and the application of the standard had no material impact on the Company's financial statements for the six months ended June 30, 2021. Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which is intended to reduce the number of accounting models for convertible debt instruments and convertible preferred stock, and amend guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company is currently assessing the impact of this standard on its financial statements. With the exception of the standards discussed above, there were no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended June 30, 2021 that are of significance or potential significance to the Company.
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Basis of Presentation (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consist of the following (in thousands):
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Performance Obligations | The activity of outstanding performance obligations as it relates to customer deposits and deferred service revenue is as follows:
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Schedule of Disaggregated Revenue | Disaggregation of revenue is as follows (in thousands):
The Company has reclassified the prior year information in the above table to conform to the current year presentation; Restaurant/Retail of $27.6 million is presented across hardware, software and service, and ISR solutions of $9.9 million is presented across ISR solutions and product.
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Acquisition (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents management's preliminary purchase price allocation:
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Schedule of Pro Forma Financial Information | he following table summarizes the Company's unaudited pro forma operating results:
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Accounts Receivable, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | The Company’s net accounts receivables consists of (in thousands):
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Schedule of Accounts Receivable, Allowance for Credit Loss | At June 30, 2021 and December 31, 2020, the Company had current, expected credit loss of $1.9 million and $1.4 million, respectively, against accounts receivable for the Restaurant/Retail segment. Changes in the current, expected credit loss were as follows:
|
Inventories, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories are used in the manufacture and service of Restaurant/Retail products. The components of inventory, net of reserves, consisted of the following:
|
Identifiable Intangible Assets and Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Identifiable Intangible Assets, Excluding Discontinued Operations | The components of identifiable intangible assets are:
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Schedule of Future Amortization of Intangible Assets | The expected future amortization of intangible assets, assuming straight-line amortization of capitalized software development costs and acquisition related intangibles, excluding software costs not meeting the general release threshold, is as follows (in thousands):
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Schedule of Goodwill | Goodwill carried by the Restaurant/Retail and Government segments is as follows:
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Equity and Liability Components of the Notes | The following table summarizes information about the net carrying amounts of the Notes and the Credit Facility as of June 30, 2021:
The following tables summarizes interest expense recognized on the Notes and on the Credit Facility:
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Schedule of Maturities of Notes | The following table summarizes the future principal payments as of June 30, 2021 (in thousands):
|
Common Stock (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Derivative Assets (Liability) at Fair Value | The Warrant is accounted for as an equity instrument pursuant to ASC 815, Derivatives and Hedging, due to the Warrant contractually permitting only settlement in non-redeemable common shares upon exercise. Issuance date fair value of the Warrant was determined to be $14.3 million based on using the Black-Scholes model with the following assumptions:
|
Stock Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense, net of forfeitures of $64.0 thousand and $27.0 thousand for the three months ended June 30, 2021 and 2020, respectively, and stock-based compensation expense, net of forfeitures of $107.0 thousand and $32.0 thousand for six months ended June 30, 2021 and 2020, respectively, was recorded in the following line items in the condensed consolidated statements of operations for the three and six months ended June 30:
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Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2021 is below:
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Schedule of Assumptions for Fair Value of Options at the Date of the Grant | The fair value of options at the date of the grant was estimated using the Black-Scholes model with the following assumptions for the six months ended June 30, 2021:
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Summary of Restricted Stock and RSU Awards Activity | A summary of unvested restricted stock activity for the six months ended June 30, 2021 is below:
A summary of unvested restricted stock units (“RSU”) activity for the six months ended June 30, 2021 is below:
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Segment and Related Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information | Information noted as “Other” primarily relates to the Company’s corporate operations. Information as to the Company’s segments is set forth in the tables below: Information as to the Company’s segments (continued):
The following table represents goodwill by reporting segment.
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Schedule of Identifiable Assets by Reporting Segment | The following table represents assets by reporting segment.
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Schedule of Revenue by Geographic Area | The following table represents identifiable long-lived tangible assets by country based on the location of the assets.
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Schedule of Revenue by Major Customers | Customers comprising 10% or more of the Company’s total revenues by reporting segment are summarized as follows:
|
Fair Value of Financial Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Liabilities Measured on Recurring Basis | The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 liability for contingent consideration at June 30, 2021 and December 31, 2020.
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Basis of Presentation - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
reporting_unit
|
Jun. 30, 2020
USD ($)
|
Apr. 08, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
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Property, Plant and Equipment [Line Items] | |||||||
Number of operating segments | reporting_unit | 2 | ||||||
Number of reportable segments | reporting_unit | 2 | ||||||
Gain on insurance proceeds | $ 0 | $ 4,400 | $ 0 | $ 4,400 | $ 0 | ||
Deferred compensation liability | $ 2,800 | $ 2,800 | $ 2,800 | ||||
Long-term deferred amount due 2021 | 50.00% | 50.00% | |||||
Long-term deferred amount due 2022 | 50.00% | 50.00% | |||||
Accrued payroll taxes | $ 2,800 | $ 2,800 | 2,800 | ||||
Accrued payroll taxes, current | 1,400 | 1,400 | 1,400 | ||||
Punchh Inc. | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Deferred taxes | 6,000 | 6,000 | $ 14,930 | $ 2,500 | |||
Other Noncurrent Liabilities | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Accrued payroll taxes | $ 1,400 | $ 1,400 |
Basis of Presentation - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $ 60,413 | $ 59,700 |
Money market funds | 24,805 | 120,986 |
Total cash and cash equivalents | $ 85,218 | $ 180,686 |
Revenue Recognition - Schedule of Performance Obligations (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Revenue, Remaining Performance Obligation [Roll Forward] | ||
Beginning balance | $ 11,082 | $ 12,486 |
Acquired deferred revenue | 11,125 | 0 |
Recognition of deferred revenue | (11,437) | (7,727) |
Deferral of revenue | 7,321 | 7,268 |
Ending balance | $ 18,091 | $ 12,027 |
Acquisition - Pro Forma Information (Details) - Punchh Inc. - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Business Acquisition [Line Items] | ||||
Total revenue | $ 69,602 | $ 51,727 | $ 132,137 | $ 112,829 |
Net loss | $ (10,355) | $ (11,592) | $ (21,447) | $ (26,197) |
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts Receivable [Abstract] | ||
Accounts receivable – net | $ 45,248 | $ 42,980 |
Government | ||
Accounts Receivable [Abstract] | ||
Accounts receivable – net | 10,809 | 10,277 |
Restaurant/Retail | ||
Accounts Receivable [Abstract] | ||
Accounts receivable – net | 34,439 | 32,703 |
Billed | Government | ||
Accounts Receivable [Abstract] | ||
Accounts receivable – net | 10,809 | 11,225 |
Advanced billings | Government | ||
Accounts Receivable [Abstract] | ||
Accounts receivable – net | $ 0 | $ (948) |
Accounts Receivable, Net - Accounts Receivable, Allowance for Credit Loss (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ 1,900 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,400 | |
Provisions | 922 | $ 978 |
Ending balance | 1,900 | |
Restaurant/Retail | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | 1,929 | 2,048 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,416 | 1,849 |
Provisions | 922 | 972 |
Write-offs | (394) | (773) |
Recoveries | (15) | 0 |
Ending balance | $ 1,929 | $ 2,048 |
Inventories, Net - Schedule of Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Finished goods | $ 15,482 | $ 12,747 |
Work in process | 238 | 16 |
Component parts | 11,484 | 6,105 |
Service parts | 2,743 | 2,770 |
Inventories-net | $ 29,947 | $ 21,638 |
Inventories, Net - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventory reserves | $ 12.4 | $ 12.0 |
Identifiable Intangible Assets and Goodwill - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
reporting_unit
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Finite-Lived Intangible Assets [Line Items] | |||||
Research and development | $ 8,643 | $ 4,538 | $ 14,452 | $ 9,403 | |
Capitalized software development costs | 2,700 | 2,600 | 7,500 | 4,300 | |
Amortization of capitalized software development costs | $ 5,000 | $ 1,500 | $ 7,000 | $ 3,100 | |
Number of operating segments | reporting_unit | 2 | ||||
Number of reportable segments | reporting_unit | 2 | ||||
Internally Developed Software Costs Not Meeting General Release Threshold | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Research and development | $ 3,000 | $ 6,500 | |||
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 3 years | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 5 years |
Identifiable Intangible Assets and Goodwill - Expected Future Amortization (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021, remaining | $ 11,630 | |
2022 | 21,889 | |
2023 | 19,881 | |
2024 | 17,281 | |
2025 | 16,857 | |
Thereafter | 34,010 | |
Total | $ 121,548 | $ 26,205 |
Identifiable Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
December 31, 2020 | $ 41,214 |
Punchh Acquisition | 417,559 |
June 30, 2021 | $ 458,773 |
Debt - Schedule of Maturities of Notes (Details) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2021, remaining | $ 338 |
2022 | 705 |
2023 | 0 |
2024 | 13,750 |
2025 | 180,000 |
Thereafter | 120,000 |
Total | $ 314,793 |
Common Stock - Schedule of Derivative Assets (Liability) at Fair Value (Details) |
6 Months Ended |
---|---|
Jun. 30, 2021
$ / shares
| |
Subsequent Event [Line Items] | |
Warrant exercise period | 5 years |
Estimated fair value (in dollars per share) | $ 60.47 |
Risk free interest rate | Private Placement | |
Subsequent Event [Line Items] | |
Derivative asset (liability) net | 0.0085 |
Expected volatility | Private Placement | |
Subsequent Event [Line Items] | |
Derivative asset (liability) net | 0.5378 |
Estimated fair value (in dollars per share) | $ 28.65 |
Stock Based Compensation - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||||
Expected to be recognized as compensation expense | $ 64,000.0 | $ 27,000.0 | $ 107,000.0 | $ 32,000.0 |
Unrecognized compensation expense | $ 39,200,000 | $ 39,200,000 |
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Obligation with Joint and Several Liability Arrangement [Line Items] | ||||
Stock based compensation | $ 4,251 | $ 1,123 | $ 5,571 | $ 2,212 |
Cost of sales - contracts | ||||
Obligation with Joint and Several Liability Arrangement [Line Items] | ||||
Stock based compensation | 116 | 101 | 184 | 199 |
Selling, general and administrative | ||||
Obligation with Joint and Several Liability Arrangement [Line Items] | ||||
Stock based compensation | $ 4,135 | $ 1,022 | $ 5,387 | $ 2,013 |
Stock Based Compensation - Schedule of Assumptions for Fair Value of Options at the Date of the Grant (Details) |
6 Months Ended |
---|---|
Jun. 30, 2021
$ / shares
| |
Share-based Payment Arrangement [Abstract] | |
Weighted average expected term | 3 years 1 month 6 days |
Weighted average risk-free interest rate | 0.40% |
Weighted average expected volatility | 56.50% |
Estimated fair value (in dollars per share) | $ 60.47 |
Segment and Related Information - Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Identifiable assets by geographic area [Abstract] | ||
Assets | $ 797,675 | $ 343,749 |
Long-Lived Assets | 203,397 | 266,845 |
Goodwill by business segment [Abstract] | ||
Goodwill | 458,773 | 41,214 |
United States | ||
Identifiable assets by geographic area [Abstract] | ||
Long-Lived Assets | 189,129 | 250,275 |
Other Countries | ||
Identifiable assets by geographic area [Abstract] | ||
Long-Lived Assets | 14,268 | 16,570 |
Restaurant/Retail | ||
Goodwill by business segment [Abstract] | ||
Goodwill | 458,037 | 40,478 |
Government | ||
Goodwill by business segment [Abstract] | ||
Goodwill | 736 | 736 |
Operating segments | Restaurant/Retail | ||
Identifiable assets by geographic area [Abstract] | ||
Assets | 706,141 | 140,606 |
Operating segments | Government | ||
Identifiable assets by geographic area [Abstract] | ||
Assets | 13,775 | 13,150 |
Corporate, Non-Segment | ||
Identifiable assets by geographic area [Abstract] | ||
Assets | $ 77,759 | $ 189,993 |
Segment and Related Information - Revenue by Major Customers (Details) - Customer Concentration Risk - Revenue Benchmark |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Restaurant/Retail | Dairy Queen | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 6.00% | 11.00% | 7.00% | 14.00% |
Restaurant/Retail | Yum! Brands, Inc. | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 11.00% | 10.00% | 11.00% | 11.00% |
Government | U.S. Department of Defense | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 26.00% | 40.00% | 29.00% | 35.00% |
Government | All Others | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 57.00% | 39.00% | 53.00% | 40.00% |
Fair Value of Financial Instruments - Contingent Consideration Liability (Details) - Revenue-based Payments $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Contingent consideration liability | $ 1,965 |
Fair Value | $ 0 |
Measurement Input, Revenue Volatility | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Weighted Average or Range | 0.250 |
Measurement Input, Discount Rate | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Weighted Average or Range | 0.140 |
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