10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________.

Commission File Number: 001-40898

 

AvidXchange Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

86-3391192

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1210 AvidXchange Lane Charlotte, NC 28206

28206

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (800) 560-9305

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

AVDX

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of August 1, 2022, the registrant had 198,099,347 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


 

AvidXchange Holdings, Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2022

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

 

 

Unaudited Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

1

 

Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021

2

 

Unaudited Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021

3

 

Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

4

 

Notes to Unaudited Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

31

PART II.

OTHER INFORMATION

32

Item 1.

Legal Proceedings.

32

Item 1A.

Risk Factors.

32

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

32

Item 3.

Defaults Upon Senior Securities.

33

Item 4.

Mine Safety Disclosures.

33

Item 5.

Other Information.

33

Item 6.

Exhibits.

34

Signatures

35

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AvidXchange Holdings, Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

As of June 30,

 

 

As of December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

363,314

 

 

$

562,817

 

Restricted funds held for customers

 

 

1,023,902

 

 

 

1,242,346

 

Marketable securities

 

 

147,750

 

 

 

-

 

Accounts receivable, net of allowances of $2,347 and $2,283, respectively

 

 

36,021

 

 

 

30,965

 

Supplier advances receivable, net of allowances of $1,357 and $1,105, respectively

 

 

14,496

 

 

 

11,520

 

Prepaid expenses and other current assets

 

 

13,029

 

 

 

10,237

 

Total current assets

 

 

1,598,512

 

 

 

1,857,885

 

Property and equipment, net

 

 

105,998

 

 

 

106,227

 

Operating lease right-of-use assets

 

 

5,564

 

 

 

3,278

 

Deferred customer origination costs, net

 

 

27,486

 

 

 

28,276

 

Goodwill

 

 

165,921

 

 

 

165,921

 

Intangible assets, net

 

 

104,135

 

 

 

100,455

 

Other noncurrent assets and deposits

 

 

4,667

 

 

 

4,261

 

Total assets

 

$

2,012,283

 

 

$

2,266,303

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

14,361

 

 

$

17,142

 

Accrued expenses

 

 

56,569

 

 

 

56,082

 

Payment service obligations

 

 

1,023,902

 

 

 

1,242,346

 

Deferred revenue

 

 

10,565

 

 

 

9,530

 

Current portion of contingent consideration

 

 

-

 

 

 

688

 

Current maturities of lease obligations under finance leases

 

 

597

 

 

 

670

 

Current maturities of lease obligations under operating leases

 

 

1,304

 

 

 

1,048

 

Current maturities of long-term debt

 

 

4,800

 

 

 

4,800

 

Total current liabilities

 

 

1,112,098

 

 

 

1,332,306

 

Long-term liabilities

 

 

 

 

 

 

Deferred revenue, less current

 

 

18,702

 

 

 

20,350

 

Contingent consideration, less current portion

 

 

70

 

 

 

70

 

Obligations under finance leases, less current maturities

 

 

61,710

 

 

 

61,172

 

Obligations under operating leases, less current maturities

 

 

5,370

 

 

 

3,448

 

Long-term debt

 

 

122,879

 

 

 

119,880

 

Other long-term liabilities

 

 

2,863

 

 

 

6,022

 

Total liabilities

 

 

1,323,692

 

 

 

1,543,248

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.001 par value; 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 1,600,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 198,077,889 and 196,804,844 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

 

198

 

 

 

197

 

Additional paid-in capital

 

 

1,611,828

 

 

 

1,594,780

 

Accumulated deficit

 

 

(923,435

)

 

 

(871,922

)

Total stockholders' equity

 

 

688,591

 

 

 

723,055

 

Total liabilities and stockholders' equity

 

$

2,012,283

 

 

$

2,266,303

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1


AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$

76,561

 

 

$

58,754

 

 

$

147,764

 

 

$

113,968

 

Cost of revenues (exclusive of depreciation and amortization expense)

 

 

28,979

 

 

 

23,011

 

 

 

56,786

 

 

 

45,551

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

20,448

 

 

 

14,547

 

 

 

37,687

 

 

 

28,058

 

Research and development

 

 

20,107

 

 

 

13,620

 

 

 

40,179

 

 

 

27,553

 

General and administrative

 

 

19,974

 

 

 

15,770

 

 

 

38,662

 

 

 

29,934

 

Impairment and write-off of intangible assets

 

 

-

 

 

 

574

 

 

 

-

 

 

 

574

 

Depreciation and amortization

 

 

8,301

 

 

 

7,093

 

 

 

16,019

 

 

 

14,170

 

Total operating expenses

 

 

68,830

 

 

 

51,604

 

 

 

132,547

 

 

 

100,289

 

Loss from operations

 

 

(21,248

)

 

 

(15,861

)

 

 

(41,569

)

 

 

(31,872

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

655

 

 

 

165

 

 

 

875

 

 

 

297

 

Interest expense

 

 

(5,075

)

 

 

(5,086

)

 

 

(10,052

)

 

 

(10,111

)

Change in fair value of derivative instrument

 

 

-

 

 

 

(1,084

)

 

 

-

 

 

 

(138

)

Charge for amending financing advisory engagement letter - related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(50,000

)

Other expenses

 

 

(4,420

)

 

 

(6,005

)

 

 

(9,177

)

 

 

(59,952

)

Loss before income taxes

 

 

(25,668

)

 

 

(21,866

)

 

 

(50,746

)

 

 

(91,824

)

Income tax expense

 

 

69

 

 

 

133

 

 

 

138

 

 

 

201

 

Net loss

 

$

(25,737

)

 

$

(21,999

)

 

$

(50,884

)

 

$

(92,025

)

Accretion of convertible preferred stock

 

 

-

 

 

 

(4,802

)

 

 

-

 

 

 

(9,404

)

Net loss attributable to common stockholders

 

$

(25,737

)

 

$

(26,801

)

 

$

(50,884

)

 

$

(101,429

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.13

)

 

$

(0.49

)

 

$

(0.26

)

 

$

(1.90

)

Weighted average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

 

197,864,993

 

 

 

54,562,145

 

 

 

197,443,615

 

 

 

53,317,276

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2


AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

 

 

 

Convertible

 

 

 

Common

 

 

Additional

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Preferred Stock

 

 

 

Stock

 

 

Paid-in Capital

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2021

 

 

-

 

 

$

-

 

 

 

 

196,804,844

 

 

$

197

 

 

$

1,594,780

 

 

$

(871,922

)

 

$

723,055

 

Cumulative effect adjustment from adoption of new accounting standard

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

629

 

 

 

(629

)

 

 

-

 

Exercise of stock options

 

 

-

 

 

 

-

 

 

 

 

63,118

 

 

 

-

 

 

 

173

 

 

 

-

 

 

 

173

 

Issuance of common stock upon vesting of restricted stock units

 

 

-

 

 

 

-

 

 

 

 

758,701

 

 

 

1

 

 

 

(1

)

 

 

-

 

 

 

-

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

6,595

 

 

 

-

 

 

 

6,595

 

Stock-based compensation expense for Employee Stock Purchase Plan, or ESPP

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

196

 

 

 

-

 

 

 

196

 

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25,147

)

 

 

(25,147

)

Balances at March 31, 2022

 

 

-

 

 

$

-

 

 

 

 

197,626,663

 

 

$

198

 

 

$

1,602,372

 

 

$

(897,698

)

 

$

704,872

 

Exercise of stock options

 

 

-

 

 

 

-

 

 

 

 

89,204

 

 

 

-

 

 

 

252

 

 

 

-

 

 

 

252

 

Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes

 

 

-

 

 

 

-

 

 

 

 

254,908

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Issuance of common stock for settlement of contingent consideration

 

 

-

 

 

 

-

 

 

 

 

20,564

 

 

 

-

 

 

 

344

 

 

 

-

 

 

 

344

 

Issuance of common stock under ESPP

 

 

-

 

 

 

-

 

 

 

 

86,550

 

 

 

-

 

 

 

602

 

 

 

-

 

 

 

602

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

8,113

 

 

 

-

 

 

 

8,113

 

Stock-based compensation expense for ESPP

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

145

 

 

 

-

 

 

 

145

 

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25,737

)

 

 

(25,737

)

Balances at June 30, 2022

 

 

-

 

 

$

-

 

 

 

 

198,077,889

 

 

$

198

 

 

$

1,611,828

 

 

$

(923,435

)

 

$

688,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible

 

 

 

Common

 

 

Additional

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Preferred Stock

 

 

 

Stock

 

 

Paid-in Capital

 

 

Deficit

 

 

Deficit

 

Balances at December 31, 2020

 

 

30,081,996

 

 

$

832,625

 

 

 

 

50,054,880

 

 

$

50

 

 

$

161,116

 

 

$

(672,273

)

 

$

(511,107

)

Issuance of common stock in connection with amended agreement - related party

 

 

-

 

 

 

-

 

 

 

 

4,080,636

 

 

 

4

 

 

 

49,996

 

 

 

-

 

 

 

50,000

 

Exercise of stock options and warrants

 

 

-

 

 

 

-

 

 

 

 

181,332

 

 

 

-

 

 

 

540

 

 

 

-

 

 

 

540

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

847

 

 

 

-

 

 

 

847

 

Accretion of convertible preferred stock

 

 

-

 

 

 

4,602

 

 

 

 

-

 

 

 

-

 

 

 

(4,602

)

 

 

-

 

 

 

(4,602

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(70,026

)

 

 

(70,026

)

Balances at March 31, 2021

 

 

30,081,996

 

 

$

837,227

 

 

 

 

54,316,848

 

 

$

54

 

 

$

207,897

 

 

$

(742,299

)

 

$

(534,348

)

Exercise of stock options and warrants

 

 

-

 

 

 

-

 

 

 

 

286,964

 

 

 

-

 

 

 

623

 

 

 

-

 

 

 

623

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

1,105

 

 

 

-

 

 

 

1,105

 

Options issued in connection with bonus program

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

48

 

 

 

-

 

 

 

48

 

Accretion of convertible preferred stock

 

 

-

 

 

 

4,802

 

 

 

 

-

 

 

 

-

 

 

 

(4,802

)

 

 

-

 

 

 

(4,802

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(21,999

)

 

 

(21,999

)

Balances at June 30, 2021

 

 

30,081,996

 

 

$

842,029

 

 

 

 

54,603,812

 

 

$