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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	Jun. 26, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	Exela Technologies, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		147,511,430
Entity Central Index Key	0001620179
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 113,013	$ 6,198
Restricted cash	9,563	7,901
Accounts receivable, net of allowance for doubtful accounts of $5,508 and $4,975, respectively	242,757	261,400
Related party receivables	866	716
Inventories, net	17,353	19,047
Prepaid expenses and other current assets	30,271	23,663
Total current assets	413,823	318,925
Property, plant and equipment, net of accumulated depreciation of $180,378 and $176,995, respectively	107,586	113,637
Operating lease right-of-use assets, net	85,983	93,627
Goodwill	358,880	359,771
Intangible assets, net	329,837	342,443
Deferred income tax assets	11,661	12,032
Other noncurrent assets	20,293	17,889
Total assets	1,328,063	1,258,324
Current liabilities
Accounts payables	74,093	86,167
Related party payables	1,323	1,740
Income tax payable	2,532	352
Accrued liabilities	116,557	121,553
Accrued compensation and benefits	54,034	48,574
Accrued interest	23,786	48,769
Customer deposits	25,605	27,765
Deferred revenue	18,455	16,282
Obligation for claim payment	40,225	39,156
Current portion of finance lease liabilities	13,214	13,788
Current portion of operating lease liabilities	24,177	25,345
Current portion of long-term debts	36,691	36,490
Total current liabilities	430,692	465,981
Long-term debt, net of current maturities	1,520,619	1,398,385
Finance lease liabilities, net of current portion	16,954	20,272
Pension liabilities	28,600	25,681
Deferred income tax liabilities	7,473	7,996
Long-term income tax liabilities	2,795	2,806
Operating lease liabilities, net of current portion	66,848	73,282
Other long-term liabilities	7,508	6,962
Total liabilities	2,081,489	2,001,365
Commitments and Contingencies (Note 9)
Stockholders' equity (deficit)
Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 154,866,550 shares issued and 147,508,669 shares outstanding at March 31, 2020 and 153,638,836 shares issued and 150,851,689 shares outstanding at December 31, 2019	15	15
Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; 3,290,050 shares issued and outstanding at March 31, 2020 and 4,294,233 shares issued and outstanding at December 31, 2019	1	1
Additional paid in capital	445,452	445,452
Less: Common Stock held in treasury, at cost; 7,357,881 shares at March 31, 2020 and 2,787,147 shares at December 31, 2019	(10,949)	(10,949)
Equity-based compensation	50,197	49,336
Accumulated deficit	(1,224,178)	(1,211,508)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(6,409)	(7,329)
Unrealized pension actuarial losses, net of tax	(7,555)	(8,059)
Total accumulated other comprehensive loss	(13,964)	(15,388)
Total stockholders’ deficit	(753,426)	(743,041)
Total liabilities and stockholders’ deficit	$ 1,328,063	$ 1,258,324

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 5,508	$ 4,975
Accumulated depreciation on property, plant and equipment	$ 180,378	$ 176,995
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock shares authorized	1,600,000,000	1,600,000,000
Common stock, shares issued	154,866,550	153,638,836
Common stock, shares outstanding	147,508,669	150,851,689
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	3,290,050	4,294,233
Preferred stock, shares outstanding	3,290,050	4,294,233
Common stock held in treasury at cost (in shares)	7,357,881	2,787,147

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Operations
Revenue	$ 365,451	$ 404,357
Cost of revenue (exclusive of depreciation and amortization)	292,539	310,601
Selling, general and administrative expenses (exclusive of depreciation and amortization)	50,374	49,677
Depreciation and amortization	23,185	26,624
Related party expense	1,551	998
Operating income (loss)	(2,198)	16,457
Other expense (income), net:
Interest expense, net	41,588	39,701
Sundry expense, net	1,082	2,715
Other expense (income), net	(34,657)	1,493
Net loss before income taxes	(10,211)	(27,452)
Income tax expense	(2,459)	(4,720)
Net loss	(12,670)	(32,172)
Cumulative dividends for Series A Preferred Stock	1,440	(914)
Net loss attributable to common stockholders	$ (11,230)	$ (33,086)
Loss per share - Basic and diluted (in dollars per share)	$ (0.08)	$ (0.23)

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (12,670)	$ (32,172)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	920	3,392
Unrealized pension actuarial gains (losses), net of tax	504	(224)
Total other comprehensive loss, net of tax	$ (11,246)	$ (29,004)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Condensed Consolidated Statements of Stockholders’ Deficit - USD ($) $ in Thousands	Common Stock	Preferred Stock	Treasury Stock	Additional Paid in Capital.	Equity-Based Compensation	Foreign Currency Translation Adjustment	Unrealized Pension Actuarial Losses, net of tax	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2018	$ 15	$ 1	$ (10,342)	$ 445,452	$ 41,731	$ (6,423)	$ (9,301)	$ (702,391)	$ (241,258)
Beginning balance (in shares) at Dec. 31, 2018	150,142,955	4,569,233	2,549,185
Increase (Decrease) in Stockholders’ Equity (Deficit)
Net loss								(32,172)	(32,172)
Equity-based compensation					2,798				2,798
Foreign currency translation adjustment						3,392			3,392
Net realized pension actuarial gains, net of tax							(224)		(224)
Ending balance at Mar. 31, 2019	$ 15	$ 1	$ (10,342)	445,452	44,529	(3,031)	(9,525)	(734,563)	(267,464)
Ending balance (in shares) at Mar. 31, 2019	150,142,955	4,569,233	2,549,185
Beginning balance at Dec. 31, 2018	$ 15	$ 1	$ (10,342)	445,452	41,731	(6,423)	(9,301)	(702,391)	(241,258)
Beginning balance (in shares) at Dec. 31, 2018	150,142,955	4,569,233	2,549,185
Increase (Decrease) in Stockholders’ Equity (Deficit)
Net loss									(509,100)
Ending balance at Dec. 31, 2019	$ 15	$ 1	$ (10,949)	445,452	49,336	(7,329)	(8,059)	(1,211,508)	(743,041)
Ending balance (in shares) at Dec. 31, 2019	150,851,689	4,294,233	2,787,147
Increase (Decrease) in Stockholders’ Equity (Deficit)
Net loss								(12,670)	(12,670)
Equity-based compensation					861				861
Foreign currency translation adjustment						920			920
Net realized pension actuarial gains, net of tax							504		$ 504
Preferred shares converted to common (in shares)	1,227,714	(1,004,183)
Shares returned in connection with the Appraisal Action as result of repayment of Margin Loan (in shares)	(4,570,734)		4,570,734						4,570,734
Shares repurchased (in shares)									(2,787,147)
Ending balance at Mar. 31, 2020	$ 15	$ 1	$ (10,949)	$ 445,452	$ 50,197	$ (6,409)	$ (7,555)	$ (1,224,178)	$ (753,426)
Ending balance (in shares) at Mar. 31, 2020	147,508,669	3,290,050	7,357,881

Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net loss	$ (12,670)	$ (32,172)
Adjustments to reconcile net loss
Depreciation and amortization	23,185	26,624
Original issue discount and debt issuance cost amortization	3,193	2,852
Impairment of goodwill and other intangible assets			$ 349,600	$ 48,100
Provision for doubtful accounts	74	800
Deferred income tax provision	(401)	1,076
Share-based compensation expense	861	2,798
Foreign currency remeasurement	(936)	35
Loss (gain) on sale of assets	(35,246)	54
Fair value adjustment for interest rate swap	845	1,677
Change in operating assets and liabilities, net effect from acquisitions:
Accounts receivable	13,476	(8,742)
Prepaid expenses and other assets	(5,678)	(632)
Accounts payable and accrued liabilities	(21,420)	(33,033)
Related party balances	(568)	(1,551)
Additions to outsource contract costs	(88)	(2,434)
Net cash used in operating activities	(35,373)	(42,648)	(63,900)	23,600
Cash flows from investing activities
Purchases of property, plant, and equipment	(3,591)	(5,572)
Additions to internally developed software	(1,153)	(1,879)
Cash paid in acquisition, net of cash received	(3,500)
Proceeds from sale of assets	38,222	7
Net cash provided by (used in) investing activities	29,978	(7,444)
Cash flows from financing activities
Repurchases of Common Stock		(2,872)
Borrowings from other loans	11,241	6,904
Borrowings under factoring arrangement	131,591	14,678
Principal repayment on borrowings under factoring arrangement	(23,042)	(13,560)
Lease terminations	(14)	(45)
Cash paid for debt issuance costs	(2,908)
Borrowings from senior secured revolving facility	29,750	51,000
Repayments on senior secured revolving facility	(14,000)	(21,000)
Principal payments on finance lease obligations	(3,187)	(5,077)
Principal repayments on senior secured term loans and other loans	(15,343)	(10,498)
Net cash provided by financing activities	114,088	19,530
Effect of exchange rates on cash	(216)	(32)
Net increase (decrease) in cash and cash equivalents	108,477	(30,594)
Cash, restricted cash, and cash equivalents
Beginning of period	14,099	43,854	43,854
End of period	122,576	13,260	$ 14,099	$ 43,854
Supplemental cash flow data:
Income tax payments, net of refunds received	623	1,356
Interest paid	61,852	60,573
Noncash investing and financing activities:
Assets acquired through right-of-use arrangements	270	4,097
Accrued capital expenditures	$ 1,565	$ 809

General

3 Months Ended

Mar. 31, 2020

General

General

1. General

These condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements as of and for the year ended December 31, 2019 included in the Exela Technologies, Inc. (the "Company," "Exela," "we," "our" or "us") annual report on Form 10-K for such period (the “2019 Form 10-K”).

The accompanying condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These accounting principles require us to use estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from our estimates.

The condensed consolidated financial statements are unaudited, but in our opinion include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

Restatement

As described in additional detail in the Explanatory Note to its 2019 Form 10-K, the Company restated its audited consolidated financial statements in the 2019 Form 10-K for the years ended December 31, 2018 and 2017 and its unaudited quarterly results for the first three fiscal quarters in the fiscal year ended December 31, 2019 and each fiscal quarter in the fiscal year ended December 31, 2018. Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended. See Note 20, Unaudited Quarterly Financial Data, of the Notes to the consolidated financial statements in the 2019 Form 10-K for the impact of these adjustments on each of the quarterly periods in fiscal 2018 and for the first three quarters of fiscal 2019. These condensed consolidated financial statements include restated results for the corresponding interim period of fiscal 2019.

Going Concern

Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required under ASC 205-40, management’s evaluation should initially not take into consideration the potential mitigating effects of management’s plans that have not been fully implemented as of the date the financial statements are issued. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

Substantial Doubt Raised

In performing the first step of the evaluation, we concluded that the following conditions raised substantial doubt about our ability to continue as a going concern:

history of net losses of $12.7 million for the three months ended March 31, 2020 and $509.1 million and $169.8 million for the years ended December 31, 2019 and December 31, 2018, respectively. This is after considering a gain of $35.3 million on the sale of SourceHOV Tax, LLC recognized during the three months ended March 31, 2020, and including goodwill and other intangible asset impairment of $349.6 million, for the year ended December 31, 2019 and $48.1 million for the year ended December 31, 2018;

net operating cash outflow of $35.4 million for the three months ended March 31, 2020, $63.9 million in 2019 and inflow of $23.6 million in 2018;

working capital deficits of $16.9 million as of March 31, 2020, $147.1 million as of December 31, 2019 and $123.5 million as of December 31, 2018;

significant cash payments for interest on our long-term debt of $144.5 million in 2019 and a similar amount expected in 2020;

a liability incurred of $57.4 million for Appraisal Action (as described further in Note 8);

a requirement that the Company maintain a minimum of $40.0 million and $35.0 million in liquidity, at all times, to not be considered in default of the A/R Facility and the Credit Agreement (as defined below); and

an accumulated deficit of $1,224.2 million.

Furthermore, under the terms of each of the First Lien Credit Agreement, dated as of July 12, 2017, as amended and restated as of July 13, 2018 and as further amended and restated as of April 16, 2019 (the “Credit Agreement”), and the Indenture and First Supplemental Indenture (collectively, the “Indenture”), dated July 12, 2017, the Company was required to deliver to lender the December 31, 2019 audited financial statements by April 14, 2020, which the Company failed to do. Such failure was an event of default under the Credit Agreement if not cured within 30 days of receiving a notice of default. The Company received such notice on April 15, 2020. Additionally, under the terms of the A/R Facility (as described in Note 5), the Company was required to furnish to each lender the December 31, 2019 audited financial statements by May 11, 2020, which the Company failed to do. In May 2020, both the Credit Agreement and the A/R Facility were amended. Refer to Consideration of Management’s Plans section below.

Consideration of Management’s Plans

In performing the second step of this assessment, we are required to evaluate whether it is probable that our plans will be effectively implemented within one year after the financial statements are issued and whether it is probable those plans will alleviate the substantial doubt about our ability to continue as a going concern.

As of June 26, 2020, the Company had $89.0 million in available cash and an additional source of liquidity of $13.0 million from the borrowing facilities.

The Company has undertaken the following plans to improve our available cash balances, liquidity and cash generated flows from operations, over the twelve month period from the date the financial statements are issued, as follows:

On January 10, 2020, certain subsidiaries of the Company entered into a $160.0 million A/R Facility with a five-year term. The Company used the proceeds of the initial borrowings to repay outstanding revolving borrowings under the Company’s senior credit facility and to provide additional liquidity and funding for the ongoing business needs of the Company and its subsidiaries. As of June 8, 2020, the Company has fully drawn on the remaining availability under the A/R Facility. Additionally, the A/R Facility agreement includes a requirement that the Company maintain a minimum of $40.0 million in liquidity, at all times, to not be considered in default.

On March 23, 2020, in response to the potential impact of the COVID-19 pandemic, the Company implemented a temporary freeze on increases to base salaries and wages unless contractually mandated. Additionally, in connection with the incentive program administered by the Company for hourly, non-exempt employees, a new maximum was put in place to limit the amount of incentives that could be earned in any given two (2) week pay period. Although the Company expects these to be short-term actions, it expects these actions will result in a cash savings to the Company of approximately $23.4 million on an annual basis.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The refundable payroll tax credits and deferment of employer side social security payments provisions of the CARES Act will benefit Company’s liquidity by approximately $29.0 million.

On May 18, 2020, the Company amended the Credit Agreement to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Further, pursuant to the amendment, the borrower under the Credit Agreement is also required to maintain a minimum liquidity of $35.0 million. On May 21, 2020, the Company also amended the A/R Facility to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Refer to Note 14 – Subsequent Events for additional discussion. The Company has delivered its audited financial statements for the year ended December 31, 2019 on June 9, 2020, within the time frame stated within such agreement and the A/R Facility. The Company believes that it has now also satisfied the filing requirement with respect to the quarterly financial statements for the quarter ended March 31, 2020.

Management Assessment of Ability to Continue as a Going Concern

The Company has a history of negative trends in its financial condition and operating results as well as recent noncompliance with covenants with its respective lenders. However, despite these conditions, the Company believes management’s plans, as described fully above, will provide sufficient liquidity to meet its financial obligations and further, maintain levels of liquidity as specifically required under the Credit Agreement and the A/R Facility. Therefore, management concluded these plans alleviate the substantial doubt that was raised about our ability to continue as a going concern for at least twelve months from the date that the financial statements were issued.

Future Plans and Considerations

Our plans to further enhance liquidity, which were not considered for the purposes of our assessment of whether substantial doubt is alleviated, include the potential sale of certain non-core assets that are not central to the Company’s long-term strategic vision, and any potential action with respect to these operations would be intended to allow the Company to better focus on its core businesses. The Company has retained financial advisors to assist with the sale of select assets. The Company expects to use the potential net proceeds from this initiative for the paydown of debt.

Our plans are subject to inherent risks and uncertainties, which become significantly magnified when the effects of the current pandemic and related financial crisis are included in the assessment. Accordingly, there can be no assurance that our plans can be effectively implemented and, therefore, that the conditions can be effectively mitigated.

Net Loss per Share

Earnings per share (“EPS”) is computed by dividing net loss available to holders of the Company’s common stock, par value $0.0001 per share (“Common Stock”) by the weighted average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method or if-converted method in periods of earnings. The two class method is an earnings allocation method that determines earnings per share for Common Stock and participating securities. Diluted EPS excludes all dilutive potential of shares of Common Stock if their effect is anti-dilutive.

As the Company experienced net losses for the periods presented, the impact of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”) was calculated based on the if-converted method. As of March 31, 2020 outstanding shares of the Company’s Series A Preferred Stock, if converted would have resulted in an additional 4,022,415 shares of Common Stock outstanding, but were not included in the computation of diluted loss per share as their effects were anti-dilutive.

The Company was originally incorporated as a special purpose acquisition company under the name Quinpario Acquisition Corp 2 (“Quinpario”), which changed its name to Exela Technologies, Inc. in July 2017. The Company has not included the effect of 35,000,000 warrants sold in the Quinpario Initial Public Offering (“IPO”) or the effect of the aggregate number of shares issuable pursuant to outstanding restricted stock units and options of 5,168,005 and 4,223,597 as of March 31, 2020 and 2019, respectively, in the calculation of diluted loss per share for the three months ended March 31, 2020 and 2019 as their effects were anti-dilutive.


	Three Months Ended March 31,
			2019
	2020		(Restated)
Net loss attributable to common stockholders (A)	$	(11,230)	$	(33,086)
Weighted average common shares outstanding - basic and diluted (B)		147,195,164		145,572,221
Loss Per Share:
Basic and diluted (A/B)	$	(0.08)	$	(0.23)

The weighted average common shares outstanding - basic and diluted, in the table above, exclude in each case the 4,570,734 shares returned to the Company in the first quarter of 2020 in connection with the Appraisal Action (as defined and described further in Note 8 below, such shares, the “Appraisal Shares”), even though the Appraisal Shares were outstanding as of March 31, 2019.

Sale of SourceHOV Tax, LLC

On March 16, 2020, the Company and its indirect wholly owned subsidiaries, Merco Holdings, LLC and SourceHOV Tax, LLC entered into a Membership Interest Purchase Agreement with Gainline Source Intermediate Holdings LLC at which time Gainline Source Intermediate Holdings LLC acquired all of the outstanding membership interests of SourceHov Tax, LLC for $40.0 million subject to adjustment as set forth in the purchase agreement. The Company recognized a gain of $35.3 million on the sale of SourceHOV Tax, LLC during the three months ended March 31, 2020, which takes into account approximately $2.0 million downwards adjustments to the purchase price in accordance with the purchase agreement. The gain on sale of SourceHOV Tax, LLC is included in Other expense (income), net in the condensed consolidated statements of operations.

New Accounting Pronouncements

3 Months Ended

Mar. 31, 2020

New Accounting Pronouncements

New Accounting Pronouncements

2. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective March 12, 2020, the Company adopted Accounting Standards Update (“ASU”) no. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. The guidance is effective upon issuance and generally can be applied through 31 December 2022. The adoption had no impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Effective March 9, 2020, the Company adopted ASU no. 2020-03, Codification Improvements to Financial Instruments. This ASU represents changes to clarify or improve the Codification. The amendments make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications in relation to financial instruments. This guidance was effective immediately upon issuance. The additional elements of the ASU did not have a material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Effective January 1, 2020, the Company adopted ASU no. 2018-13, Fair Value Measurement (Topic 820); which changes the fair value measurement disclosure requirements of Accounting Standards Codification (“ASC 820”). The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting. The FASB used the guidance in the Concepts Statement to improve the effectiveness of ASC 820’s disclosure requirements. The objective of the disclosure requirements in this subtopic is to provide users of financial statements with information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to financial statements. The ASU includes but is not limited to the valuation techniques and inputs that a reporting entity uses to arrive at its measures of fair value, including judgments and assumptions that the entity makes, the uncertainty in the fair value measurements as of the reporting date, and how changes in fair value measurements affect an entity’s performance and cash flows. The adoption had no material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Effective January 1, 2020, the Company adopted ASU no. 2018-15, Intangibles, Goodwill, and Other - Internal Use Software (Subtopic 350-40): Customer's accounting for implementation costs incurred in a Cloud Computing Arrangement that is a service contract. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. The adoption had no material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Effective January 1, 2020, the Company adopted ASU no. 2019-08, Codification Improvements — Share-Based Consideration Payable to a Customer. This ASU clarifies the accounting for share-based payments issued as consideration payable to a customer in accordance with ASC 606. Under the ASU, entities apply the guidance in ASC 718 to measure and classify share-based payments issued to a customer that are not in exchange for a distinct good or service (i.e., share-based sales incentives). Accordingly, entities use a fair-value-based measure to calculate such incentives on the grant date, which is the date on which the grantor (the entity) and the grantee (the customer) reach a mutual understanding of the key terms and conditions of the share-based consideration. The result is reflected as a reduction of revenue in accordance with the guidance in ASC 606 on consideration payable to a customer. After initial recognition, the measurement and classification of the share-based sales incentives continue to be subject to ASC 718 unless (1) the award is subsequently modified when vested and (2) the grantee is no longer a customer. The adoption had no impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

In July 2019, the FASB issued ASU 2019-07, Codification Updates to SEC Sections. This ASU amends various SEC paragraphs pursuant to the issuance of SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization. The S-X Rule 3-04 requires the presentation of changes in stockholders’ equity in the form of a reconciliation of the beginning balance to the ending balance for each period for which a statement of income is required to be filed with all significant reconciling items. The Company presented changes in stockholders' equity as separate financial statements for the current and comparative year-to-date interim periods beginning on January 1, 2019. This guidance was effective immediately upon issuance. The additional elements of the ASU did not have a material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Effective January 1, 2019, the Company adopted ASU no. 2016-02, Leases (ASC 842). This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted this guidance effective January 1, 2019, under the modified retrospective transition method provided by ASU 2018-11 with the following practical expedients below:

Not to record leases with an initial term of 12 months or less on the balance sheet; and

Not to reassess the (1) definition of a lease, (2) lease classification, and (3) initial direct costs for existing leases during transition.

The adoption had a material impact on the Company's unaudited consolidated balance sheets, but did not have a material impact on the Company's unaudited consolidated statements of operations and unaudited consolidated statements of cash flows. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases, while the Company's accounting for finance leases remained substantially unchanged.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU no. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. This ASU along with related additional clarificatory guidance in the ASU No. 2019-05, “Financial Instruments—Credit Losses (Topic 326)” and ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”, are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements.

In December 2019, the FASB issued ASU no. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes, for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. It also clarifies certain aspects of the existing guidance to promote more consistent application, among other things. The ASU is effective for the Company for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption is permitted. The Company is currently in the early stages of evaluating the impact that adopting this standard will have on the consolidated financial statements.

Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Significant Accounting Policies

Significant accounting policies

3. Significant Accounting Policies

The information presented below supplements the Significant Accounting Policies information presented in our 2019 Form 10-K, including Revenue Recognition for the adoption of ASC 606 (ASU 2014-09: Revenue from Contracts with Customers), which became effective January 1, 2018. See our 2019 Form 10-K for a description of our significant accounting policies in effect prior to the adoption of the new accounting standard.

Revenue Recognition

We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of our material sources of revenue are derived from contracts with customers, primarily relating to the provision of business and transaction processing services within each of our segments. We do not have any significant extended payment terms, as payment is received shortly after goods are delivered or services are provided.

Nature of Services

Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract.

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
									2019
	2020								(Restated)
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	223,326	$	64,049	$	17,290	$	304,665	$	251,500	$	61,343	$	17,842	$	330,685
EMEA		53,906		—		—		53,906		66,678		—		—		66,678
Other		6,880		—		—		6,880		6,994		—		—		6,994
Total	$	284,112	$	64,049	$	17,290	$	365,451	$	325,172	$	61,343	$	17,842	$	404,357

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2020 and December 31, 2019:


	March 31,		December 31,
	2020		2019
Accounts receivable, net	$	242,757	$	261,400
Deferred revenues		18,851		16,621
Customer deposits		25,605		27,765
Costs to obtain and fulfill a contract		4,517		4,977

Accounts receivable, net includes $24.2 million and $34.1 million as of March 31, 2020 and December 31, 2019, respectively, representing amounts not billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers.

Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $7.0 million during the three months ended March 31, 2020 that had been deferred as of December 31, 2019.

Costs incurred to obtain and fulfill contracts are deferred and expensed on a straight-line basis over the estimated benefit period. We recognized $0.7 million of amortization for these costs in the first three months of 2020 within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material.

Customer deposits consist primarily of amounts received from customers in advance for postage. The amounts recorded as of December 31, 2019 were used to pay for postage with the corresponding postage revenue being recognized during the three months ended March 31, 2020. Any residual balances may be retained and used in future periods.

Performance Obligations

At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes.

Certain of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained.

When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts give rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration.

We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of March 31, 2020 in each of the future periods below:


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2020	$	36,826
2021		38,591
2022		32,814
2023		27,638
2024		26,703
2025 and thereafter		27,144
Total	$	189,716

Intangibles Assets and Goodwill

3 Months Ended

Mar. 31, 2020

Intangibles Assets and Goodwill

Intangibles Assets and Goodwill

4. Intangibles Assets and Goodwill

Intangible Assets

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consists of the following:


	March 31, 2020
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	507,589	$	(247,272)	$	260,317
Developed technology		88,553		(86,734)		1,818
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		15,877		(11,360)		4,517
Internally developed software		44,247		(13,966)		30,281
Trademarks		23,378		(23,370)		8
Assembled workforce		4,473		(1,398)		3,075
Purchased software		26,749		(2,229)		24,520
Intangibles, net	$	719,265	$	(389,428)	$	329,837


	December 31, 2019
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	508,074	$	(237,313)	$	270,761
Developed technology		89,053		(87,109)		1,944
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		16,726		(11,749)		4,977
Internally developed software		43,261		(12,129)		31,132
Trademarks		23,378		(23,370)		8
Assembled workforce		4,473		(1,118)		3,355
Purchased software		26,749		(1,783)		24,966
Intangibles, net	$	720,114	$	(377,671)	$	342,443

(a)

Amounts include intangible assets acquired in business combinations and asset acquisitions.

(b)

The carrying amount of trade names for 2020 and 2019 is net of accumulated impairment losses of $44.1 million, of which $1.0 million was recognized in 2019.

Goodwill

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS (See Note 13).

Goodwill by reporting segment consists of the following:




	Beginning of Year Balance (a)			Additions		Impairments		Currency Translation Adjustments		End of Year Balance (a)
ITPS	$	571,575	$	—	$	(317,525)	$	70	$	254,120
HS		86,786		—		—		—		86,786
LLPS		49,897		—		(31,032)		—		18,865
Balance as of December 31, 2019	$	708,258	$	—	$	(348,557)	$	70	$	359,771
ITPS		254,120		—		—		(891)		253,229
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Balance as of March 31, 2020	$	359,771	$	—	$	—	$	(891)	$	358,880

(a)

The goodwill amount for all periods presented is net of accumulated impairment amount as at December 31, 2018. Accumulated impairment is $212.3 million and $560.9 million as at December 31, 2018 and March 31, 2020, respectively.

Long-Term Debt and Credit Facilities

3 Months Ended

Mar. 31, 2020

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

5. Long-Term Debt and Credit Facilities

Senior Secured Notes

On July 12, 2017, the Company issued $1.0 billion in aggregate principal amount of 10.0% First Priority Senior Secured Notes due 2023 (the “Notes”). The Notes are guaranteed by certain subsidiaries of the Company. The Notes bear interest at a rate of 10.0% per year. The Company pays interest on the Notes on January 15 and July 15 of each year, commencing on January 15, 2018. The Notes will mature on July 15, 2023.

Senior Credit Facilities

On July 12, 2017, the Company entered into a First Lien Credit Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch and KKR Corporate Lending LLC (the “Credit Agreement”) providing Exela Intermediate LLC, a wholly owned subsidiary of the Company, upon the terms and subject to the conditions set forth in the Credit Agreement, (i) a $350.0 million senior secured term loan maturing July 12, 2023 with an original issue discount (“OID”) of $7.0 million, and (ii) a $100.0 million senior secured revolving facility maturing July 12, 2022. As of March 31, 2020 and December 31, 2019 the Company had outstanding irrevocable letters of credit totaling approximately $19.2 million and $20.6 million, respectively, under the senior secured revolving facility.

The Credit Agreement provided for the following interest rates for borrowings under the senior secured term facility and senior secured revolving facility: at the Company’s option, either (1) an adjusted LIBOR, subject to a 1.0% floor in the case of term loans, or (2) a base rate, in each case plus an applicable margin. The initial applicable margin for the senior secured term facility was 7.5% with respect to LIBOR borrowings and 6.5% with respect to base rate borrowings. The initial applicable margin for the senior secured revolving facility was 7.0% with respect to LIBOR borrowings and 6.0% with respect to base rate borrowings. The applicable margin for borrowings under the senior secured revolving facility is subject to step-downs based on leverage ratios. The senior secured term loan is subject to amortization payments, commencing on the last day of the first full fiscal quarter of the Company following the closing date, of 0.6% of the aggregate principal amount for each of the first eight payments and 1.3% of the aggregate principal amount for payments thereafter, with any balance due at maturity.

Term Loan Repricing

On July 13, 2018, Exela successfully repriced the $343.4 million of term loans outstanding under its senior secured credit facilities (the “Repricing”). The Repricing was accomplished pursuant to a First Amendment to the First Lien Credit Agreement (the “First Amendment”), dated as of July 13, 2018, by and among the Company’s subsidiaries Exela Intermediate Holdings LLC, Exela Intermediate, LLC, each “Subsidiary Loan Party” listed on the signature pages thereto, Royal Bank of Canada, as administrative agent, and each of the lenders party thereto, whereby the Company borrowed $343.4 million of refinancing term loans (the “Repricing Term Loans”) to refinance the Company’s existing senior secured term loans.

In accordance with ASC 470 – Debt – Modifications and Extinguishments, as a result of certain lenders that participated in Exela’s debt structure prior to the Repricing and the Company’s debt structure after the Repricing, it was determined that a portion of the refinancing of Exela’s senior secured credit facilities would be accounted for as a debt modification, and the remaining would be accounted for as an extinguishment. The Company incurred $1.0 million in new debt issuance costs related to the refinancing, of which $1.0 million was expensed pursuant to modification accounting. The proportion of debt that was extinguished resulted in a write off of previously recognized debt issue costs of $0.1 million. Additionally, for the new lenders who exceeded the 10% test, less than $0.1 million was recorded as additional debt issue costs. All unamortized costs and discounts will be amortized over the life of the new term loan using the effective interest rate of the term loan.

The Repricing Term Loans will bear interest at a rate per annum of, at the Company’s option, either (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.0% floor, or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.5%, (ii) the prime rate and (iii) the one-month adjusted LIBOR plus 1.0%, in each case plus an applicable margin of 6.5% for LIBOR loans and 5.5% for base rate loans. The interest rates applicable to the Repricing Term Loans are 100 basis points lower than the interest rates applicable to the existing senior secured term loans that were incurred on July 12, 2017 pursuant to the Credit Agreement. The Repricing Term Loans will mature on July 12, 2023, the same maturity date as the prior senior secured term loans.

2018 Incremental Term Loans

On July 13, 2018, the Company successfully borrowed an additional $30.0 million pursuant to incremental term loans (the “Incremental Term Loans”) under the First Amendment. The proceeds of the Incremental Term Loans may be used by the Company for general corporate purposes and to pay fees and expenses in connection with the First Amendment. The interest rates applicable to the Incremental Term Loans are the same as those for the Repricing Term Loans.

The Company may voluntarily repay the Repricing Term Loans and the Incremental Term Loans (collectively, the “Term Loans”) at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans.

Other than as described above, the terms, conditions and covenants applicable to the Repricing Term Loans and the Incremental Term Loans are consistent with the terms, conditions and covenants that were applicable to the existing senior secured loans under the Credit Agreement. The Repricing and issuance of the Incremental Term Loans resulted in a partial debt extinguishment, for which Exela recognized $1.1 million in debt extinguishment costs in the third quarter of 2018.

2019 Incremental Term Loan

On April 16, 2019, the Company successfully borrowed an additional $30.0 million pursuant to incremental term loans (the “2019 Incremental Term Loans”) under the Second Amendment to First Lien Credit Agreement (the “Second Amendment”). The proceeds of the 2019 Incremental Term Loans were used to replace the cash spent for acquisitions, pay related fees, expenses and related borrowings and for general corporate purposes.

The 2019 Incremental Term Loans will bear interest at a rate per annum that is the same as the Company’s Repricing Term Loans under the senior credit facility. The 2019 Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Term Loans. The Company may voluntarily repay the 2019 Incremental Term Loans at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans.

Other than as described above, the terms, conditions and covenants applicable to the 2019 Incremental Term Loans are consistent with the terms, conditions and covenants that are applicable to the Repricing Term Loans and 2018 Incremental Term Loans under the Credit Agreement. The Repricing and issuance of the 2018 and 2019 Incremental Term Loans resulted in a partial debt extinguishment, for which Exela recognized $1.4 million in debt extinguishment costs in the second quarter of 2019.

Receivables Securitization

On January 10, 2020, certain subsidiaries of the Company entered into a $160.0 million accounts receivable securitization facility (the “A/R Facility”) with a five year term. In the A/R Facility, (i) Exela Receivables 1, LLC (the “A/R Borrower”), a wholly-owned indirect subsidiary of the Company, entered into a Loan and Security Agreement (the “A/R Loan Agreement”), dated as of January 10, 2020, with TPG Specialty Lending, Inc., as administrative agent (the “A/R Administrative Agent”), PNC Bank National Association, as LC Bank (the “LC Bank”), the lenders (each, an “A/R Lender” and collectively the “A/R Lenders”) and the Company, as initial servicer, pursuant to which the A/R Lenders will make loans (the “Loan”) to the A/R Borrower to be used to purchase certain receivables and related assets from its sole member, Exela Receivables Holdco, LLC (the “Parent SPE”), a wholly-owned indirect subsidiary of the Company, (ii) sixteen other indirect, wholly-owned U.S. subsidiaries of the Company (collectively, the “Originators”) sold or contributed and will sell or contribute to the Parent SPE certain receivables and related assets in consideration for a combination of cash, equity in the Parent SPE and/or letters of credit issued by the LC Bank to the Originators; and (iii) the Parent SPE has sold or contributed and will sell or contribute to the Borrower certain receivables and related assets in consideration for a combination of cash, equity in the A/R Borrower and/or letters of credit issued by the LC Bank to the beneficiaries elected by Parent SPE.

The Company, the Parent SPE, the A/R Borrower and the Originators provide customary representations and covenants pursuant to the agreements entered into in connection with the A/R Facility. The A/R Loan Agreement provides for certain events of default upon the occurrence of which the A/R Administrative Agent may declare the A/R Facility’s termination date to have occurred and declare the outstanding Loan and all other obligations of the A/R Borrower to be immediately due and payable. The Company used the proceeds of the initial borrowings to repay outstanding revolving borrowings under the Company’s senior credit facility and to provide additional liquidity and funding for the ongoing business needs of the Company and its subsidiaries.

Pursuant to the A/R Loan Agreement, each of Company, the A/R Borrower, the Parent SPE and the Originators (the “Exela Parties”) is prohibited from amending or modifying any Existing Secured Debt Documents (as defined in the A/R Loan Agreement) if such amendment or modification could: (i) by its terms cause any Exela Party to be unable to perform its obligations under Transaction Documents (as defined in the A/R Loan Agreement), (ii) cause any inaccuracy or breach of any representation, warranty, or covenant of any Exela Party, (iii) could subject any existing or subsequently arising Collateral to an Adverse Claim (each as defined in the A/R Loan Agreement), or (iv) adversely affect any rights or remedies of the Lenders, the LC Bank and the A/R Administrative Agent under the A/R Facility. The A/R Borrower and Parent SPE were formed in December 2019, and are consolidated into the Company’s financial statements even though they had no material assets or operations during the year end December 31, 2019. The A/R Borrower and Parent SPE are bankruptcy remote entities and as such their assets are not available to creditors of the Company or any of its subsidiaries. Since January 10, 2020, the parties have amended and waived the A/R Facility several times to address contractually, the occurrence of certain events, including among other things, the delay in delivery of annual financial statements for the fiscal year ended 2019, financial statements for the quarter ended March 31, 2020, and the Initial Servicer’s liquidity (as defined in the A/R Facility) falling below $60.0 million.

Each loan bears interest on the unpaid principal amount as follows: (1) if a Base Rate Loan, at 3.75% plus a rate equal to the greater of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50%, (c) the Adjusted LIBOR Rate (which rate shall be calculated based upon an Interest Period of one month and determined on a daily basis) plus 1.00%, and (d) 4.50% per annum and (2) if a LIBOR Rate Loan, 4.75% plus a floating LIBOR Rate with a 1.00% LIBOR floor. As of March 31, 2020, there were $108.4 million borrowings under the Receivables Securitization Facility.

Third Amendment

On May 18, 2020, the Company amended the Credit Agreement to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Upon the Company’s delivery of the annual and quarterly financial statements described above within the time frames stated therein (which the Company believes it has now satisfied), the Company will, upon delivery of such financial statements, be in compliance with the Credit Agreement, with respect to the financial statement delivery requirements set forth therein. Pursuant to the amendment, the Company also amended the Credit Agreement to, among other things: restrict the borrower and its subsidiaries’ ability to designate or invest in unrestricted subsidiaries; incur certain debt; create certain liens; make certain investments; pay certain dividends or other distributions on account of its equity interests; make certain asset sales or other dispositions (or utilize the proceeds of certain asset sales to reinvest in the business); or enter into certain affiliate transactions pursuant to the negative covenants under the Credit Agreement. Further, pursuant to the amendment, the borrower under the Credit Agreement is also required to maintain a minimum Liquidity (as defined in the amendment) of $35.0 million.

Long-Term Debt Outstanding

As of March 31, 2020 and December 31, 2019, the following long-term debt instruments were outstanding:


	March 31,		December 31,
	2020		2019
Other (a)	$	30,807	$	30,232
First lien credit agreement (b)		357,098		360,583
Senior secured notes (c)		980,289		979,060
Secured borrowings under A/R Facility		108,366		—
Revolver		80,750		65,000
Total debt		1,557,310		1,434,875
Less: Current portion of long-term debt		(36,691)		(36,490)
Long-term debt, net of current maturities	$	1,520,619	$	1,398,385

(a)

Other debt represents the Company’s outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company.

(b)

Net of unamortized original issue discount and debt issuance costs of $6.1 million and $17.7 million as of March 31, 2020 and $6.5 million and $18.9 million as of December 31, 2019.

(c)

Net of unamortized debt discount and debt issuance costs of $14.1 million and $5.6 million as of March 31, 2020 and $14.9 million and $6.0 million as of December 31, 2019.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2020
Income Taxes
Income Taxes	6. Income Taxes The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods, as required under GAAP. The Company recorded an income tax expense of $2.5 million and $4.7 million for the three months ended March 31, 2020 and 2019, respectively. The Company's ETR of (24.1%) for the three months ended March 31, 2020 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s deferred tax assets on U.S. disallowed interest expense carryforward’s created by the provisions of The Tax Cuts and Jobs Act (“TCJA”). For the three months ended March, 2019, the Company’s ETR of (17.2%) differed from the expected U.S. statutory tax rate of 21.0%, and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s U.S. disallowed interest expense carryforward’s created by the provisions of the TCJA. As of March 31, 2020, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2019. The Company's valuation allowances have increased by approximately $3.1 million from December 31, 2019 to March 31, 2020 due largely to effects of TCJA relating to interest expense.

Employee Benefit Plans

3 Months Ended

Mar. 31, 2020

Employee Benefit Plans

Employee Benefit Plans

7. Employee Benefit Plans

German Pension Plan

The Company’s subsidiary in Germany provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company.

U.K. Pension Plan

The Company’s subsidiary in the United Kingdom provides pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or December 31, 2015.

Norway Pension Plan

The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or April 30, 2018.

Asterion Pension Plan

In April 2018 through its acquisition of Asterion International Group the Company became obligated to provide pension benefits to eligible retirees and eligible dependents of Asterion. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or April 10, 2018.

Tax Effect on Accumulated Other Comprehensive Loss

As of March 31, 2020 and December 31, 2019 the Company recorded actuarial losses of $7.6 million and $8.1 million in accumulated other comprehensive loss on the condensed consolidated balance sheets, respectively, which are net of a deferred tax benefit of $2.0 million.

Pension Expense

The components of the net periodic benefit cost are as follows:


	Three Months Ended March 31,
			2019
	2020		(Restated)
Service cost	$	19	$	23
Interest cost		498		605
Expected return on plan assets		(644)		(626)
Amortization:
Amortization of prior service cost		26		26
Amortization of net (gain) loss		432		415
Net periodic benefit cost	$	331	$	443

The Company records pension interest cost within Interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within Other income, net. Service cost is recorded within Cost of revenue.

Employer Contributions

The Company’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $0.6 million to its pension plans during the three months ended March 31, 2020 and 2019. The Company has funded the pension plans with the required contributions for 2020 based on current plan provisions.

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2020
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Appraisal Action On September 21, 2017, former stockholders of SourceHOV Holdings, Inc. (“SourceHOV”), who owned 10,304 shares of SourceHOV common stock, filed a petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery, captioned Manichaean Capital, LLC, et al. v. SourceHOV Holdings, Inc., C.A. No. 2017 0673 JRS (the “Appraisal Action”). The Appraisal Action arose out of the acquisition of SourceHOV and Novitex Holdings, Inc., by Quinpario in July 2017 (“Novitex Business Combination”), and the petitioners sought, among other things, a determination of the fair value of their SourceHOV shares at the time of the Novitex Business Combination; an order that SourceHOV pay that value to the petitioners, together with interest at the statutory rate; and an award of costs, attorneys’ fees, and other expenses. During the trial the parties and their experts offered competing valuations of the SourceHOV shares as of the date of the Novitex Business Combination. SourceHOV argued the value was no more than $1,633.85 per share and the petitioners argued the value was at least $5,079.28 per share. On January 30, 2020, the Court issued its post-trial Memorandum Opinion in the Appraisal Action, in which it found that the fair value of SourceHOV as of the date of the Novitex Business Combination was $4,591 per share, and on March 26, 2020, the Court issued its final order and judgment awarding the petitioners $57,698,426 inclusive of costs and interest. On May 7, 2020, SourceHOV filed a motion for new trial in relation to share count. On June 11, 2020 the Court denied SourceHOV’s motion for new trial. SourceHOV now has the right to appeal the judgment to the Supreme Court of the State of Delaware and intends to do so by July 1, 2020. At this time, we cannot determine whether such an appeal would be successful. Per the Court’s opinion, the legal rate of interest, compounded quarterly, accrues on the per share value from the July 2017 closing date of the Novitex Business Combination until the date of payment to petitioners. As a result of the Appraisal Action and repayment of the Margin Loan by Ex-Sigma 2 LLC (“Ex-Sigma 2”), 4,570,734 shares of our Common Stock issued to Ex-Sigma 2, our largest shareholder following the Novitex Business Combination, have been returned to the Company during the first quarter of 2020. As of March 31, 2020, the Company accrued a liability of $57.4 million for the Appraisal Action based on management’s best estimate of total payment obligation including accrued interest. Contract-Related Contingencies The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows. On February 20, 2014, the Company’s subsidiary, Pangea Acquisitions, Inc. ("Pangea") acquired BancTec, Inc. ("BancTec") through a merger of BancTec and a Pangea subsidiary. The merger agreement for that transaction provided that contingent, or "earnout," consideration would be paid to former BancTec shareholders in the event Pangea's controlling shareholder realizes certain returns on its post-merger Pangea stock. A liability of $0.7 million was recognized for the fair value of the contingent consideration on the acquisition date. The liability for the contingent consideration is adjusted to fair value at each reporting date. (Refer to Note 9, Fair Value Measurements). The liability for the fair value of the contingent consideration was $0.7 million as of December 31, 2019 and 2018. On April 13, 2018, Western Standard, LLC, in its capacity as representative of the former BancTec shareholders filed suit in the Delaware Court of Chancery alleging that the above described earnout was triggered by the Novitex Business Combination and seeks payment of approximately $8.1 million in respect of the earnout. While the Company moved to dismiss the complaint because the earnout was moot or had not been triggered, on July 24, 2019, the Company was denied its motion to dismiss. The case is scheduled for trial in November 2020 in Wilmington, Delaware, and discovery is ongoing.

Fair Value Measurement

3 Months Ended

Mar. 31, 2020

Fair Value Measurement

Fair Value Measurement

9. Fair Value Measurement

Assets and Liabilities Measured at Fair Value

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of March 31, 2020, and December 31, 2019, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan and secured notes at approximately 30.0% and 24.0% respectively, of the respective principal balance outstanding as of March 31, 2020. The fair value is substantially less than the carrying value for the long-term debt. Other debt represents the Company's outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company and as such, the cost incurred would approximate fair value. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value.

The Company determined the fair value of its long-term debt using Level 2 inputs including the recent issue of the debt, the Company’s credit rating, and the current risk-free rate. The Company’s contingent liabilities related to prior acquisitions are re-measured each period and represent a Level 2 measurement as it is based on using an earn out method based on the agreement terms.

The Company determined the fair value of the interest rate swap using Level 2 inputs. The Company uses closing prices as provided by a third party institution.

The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of March 31, 2020, and December 31, 2019:


	Carrying		Fair		Fair Value Measurements
As of March 31, 2020	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,520,619	$	535,387	$	—	$	535,387	$	—
Interest rate swap liability		1,346		1,346		—		1,346		—
Acquisition contingent liability	$	721	$	721	$	—	$	—	$	721
Nonrecurring assets and liabilities:
Goodwill		358,880		358,880		—		—		358,880


	Carrying		Fair		Fair Value Measurements
As of December 31, 2019	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,398,385	$	632,796	$	—	$	632,796	$	—
Interest rate swap liability		501		501		—		501		—
Acquisition contingent liability	$	721	$	721	$	—	$	—	$	721
Nonrecurring assets and liabilities:
Goodwill		359,771		359,771		—		—		359,771

The significant unobservable inputs used in the fair value of the Company’s acquisition contingent liabilities are the discount rate, growth assumptions, and revenue thresholds. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the other based on the current level of billings.

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3 for which a reconciliation is required:


	March 31,		December 31,
	2020		2019
Balance as of Beginning of Period	$	721	$	721
Payments/Reductions		—		—
Balance as of End of Period	$	721	$	721

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

SourceHOV had 24,535 restricted stock units (“RSUs”) outstanding under its 2013 Long Term Incentive Plan (“2013 Plan”) at the closing of the Novitex Business Combination. Simultaneous with the closing, the 2013 Plan, as well as all vested and unvested RSUs under the 2013 Plan, were assumed by Ex-Sigma LLC (“Ex-Sigma”), the sole equityholder of Ex-Sigma 2, an entity formed by the former SourceHOV equity holders. In accordance with GAAP, the Company incurred compensation expenses related to the 9,880 unvested RSUs as of July 12, 2017 on a straight-line basis until fully vested, as the recipients of the RSUs under the 2013 Plan were employees of the Company. All unvested RSUs under the 2013 Plan were vested by April 2019. As of March 31, 2020, there were no outstanding obligations under the 2013 Plan.

Exela 2018 Stock Incentive Plan

On January 17, 2018, Exela’s 2018 Stock Incentive Plan (the “2018 Plan”) became effective. The 2018 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other stock-based compensation to eligible participants. The Company is authorized to issue up to 8,323,764 shares of Common Stock under the 2018 Plan.

Restricted Stock Unit Grants

Restricted stock unit awards generally vest ratably over a one to two year period. Restricted stock units are subject to forfeiture if employment terminates prior to vesting and are expensed ratably over the vesting period.

A summary of the status of restricted stock units related to the 2018 Plan as of March 31, 2020 is presented as follows:


				Average
		Weighted		Remaining
	Number	Average Grant		Contractual Life	Aggregate
	of Shares	Date Fair Value		(Years)	Intrinsic Value
Balance as of December 31, 2019	309,305	$	1.99	1.19	$	616
Granted	—		—
Forfeited	—		—
Vested	—		—
Balance as of March 31, 2020	309,305	$	1.99	0.94	$	616

Options

Under the 2018 Plan, stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying stock at the grant date. The vesting period for each option award is established on the grant date, and the options generally expire 10 years from the grant date. Options granted under the 2018 Plan generally require no less than a two or four year ratable vesting period. Stock option activity in the first three months of 2020 is summarized in the following table:


		Weighted		Weighted		Average Remaining
		Average Grant		Average		Vesting Period	Aggregate
	Outstanding	Date Fair Value		Exercise Price		(Years)	Intrinsic Value (2)
Balance as of December 31, 2019	4,937,700	$	1.97	$	4.14	2.27	$	—
Granted	—		—
Exercised	—		—
Forfeited	(79,000)		2.69
Expired	—		—
Balance as of March 31, 2020 (1)	4,858,700	$	1.96	$	4.14	2.03	$	—

(1) None of the outstanding options are exercisable as of March 31, 2020.

(2) Exercise prices of all of the outstanding options are higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value is zero.

As of March 31, 2020, there was approximately $5.1 million of total unrecognized compensation expense related to non-vested awards for the 2018 Plan, which will be recognized over the respective service period. Stock-based compensation expense is recorded within Selling, general, and administrative expenses. The Company incurred total compensation expense of $0.9 million and $2.8 million related to plan awards for the three months ended March 31, 2020 and 2019, respectively.

Stockholders’ Equity	3 Months Ended
Stockholders’ Equity	Mar. 31, 2020
Stockholders’ Equity
Stockholders’ Equity	11. Stockholders’ Equity The following description summarizes the material terms and provisions of the securities that the Company has authorized. Common Stock The Company is authorized to issue 1,600,000,000 shares of Common Stock. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock or as provided for in the Director Nomination Agreements, the holders of our Common Stock possess all voting power for the election of our board of directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of Exela stockholders. Holders of our Common Stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of our Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions. The holders of the Common Stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock. In first quarter of 2020, 1,004,183 shares of Series A Preferred Stock were converted into 1,227,714 shares of Common Stock. As of March 31, 2020 and December 31, 2019, there were 147,508,669 and 150,851,689 shares outstanding, respectively (the outstanding shares of Common Stock as of December 31, 2019 includes the 4,570,734 shares returned to the Company in the first quarter of 2020 in connection with the Appraisal Action which became treasury stock). Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. At March 31, 2020 and December 31, 2019, the Company had 3,290,050 shares and 4,294,233 shares of Series A Preferred Stock outstanding, respectively. The par value of the Series A Preferred Stock is $0.0001 per share. Each share of Series A Preferred Stock will be convertible at the holder's option, at any time after the six month anniversary and prior to the third anniversary of the issue date, initially into 1.2226 shares of Exela Common Stock. Holders of the Series A Preferred Stock are be entitled to receive cumulative dividends at a rate per annum of 10% of the Liquidation Preference per share of Series A Preferred Stock, paid or accrued quarterly in arrears. From the issue date until the third anniversary of the issue date, the amount of all accrued but unpaid dividends on the Series A Preferred Stock will be added to the Liquidation Preference without any action by the Company’s board of directors. However, the Company is not required to make any payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series A Preferred Stock or for dividends on the shares of Common Stock issued upon conversion. The dividend accumulation for the three months ended March 31, 2019 was $0.9 million, as reflected on the Consolidated Statement of Operations, however, as a result of 1,004,183 shares of Series A Preferred Stock being converted into 1,227,714 shares of Common Stock during the quarter, accumulated dividend of $2.3 million was reversed, resulting in a reduction of dividend accumulation of $1.4 million for the three months ended March 31, 2020. As of March 31, 2020, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 is $8.0 million. The per share average of cumulative preferred dividends for the three months ended March 31, 2020 and 2019 is $(0.4) and $0.2, respectively. Following the third anniversary of the issue date, dividends on the Series A Preferred Stock will be accrued by adding to the Liquidation Preference or paid in cash, or a combination thereof. In addition, holders of the Series A Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Treasury Stock On November 8, 2017, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company was permitted to purchase up to 5,000,000 shares of its Common Stock. The Share Buyback Program has expired. As of March 31, 2020, 2,787,147 shares had been repurchased under the Share Buyback Program and they are held in treasury stock. The Company records treasury stock using the cost method. During the first quarter of 2020 4,570,734 shares of Common stock were returned to the Company by Ex-Sigma 2 in connection with the Appraisal Action. These shares are also included in treasury stock. Warrants At December 31, 2019, there were a total of 34,988,302 warrants outstanding. As part of its IPO, Quinpario had issued 35,000,000 units including one share of Common Stock and one warrant of which 34,988,302 have been separated from the original unit and 11,698 warrants remain an unseparated part of the originally issued units which are included in the number of shares of common stock outstanding referred to above. The warrants are traded on the OTC bulletin board as of March 31, 2020. Each warrant entitles the holder to purchase one-half of one share of Common Stock at a price of $5.75 per half share ($11.50 per whole share). Warrants may be exercised only for a whole number of shares of Common Stock. No fractional shares will be issued upon exercise of the warrants. Each warrant is currently exercisable and will expire July 12, 2022 (five years after the completion of the Novitex Business Combination), or earlier upon redemption. The Company may call the warrants for redemption at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if, and only if, the last sales price of the shares of Common Stock equals or exceeds $24.00 per share for any 20 trading days within a 30 trading day period (the “30-day trading period”) ending three business days before the Company sends the notice of redemption, and if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption.

Related-Party Transactions

3 Months Ended

Mar. 31, 2020

Related-Party Transactions

Related-Party Transactions

12. Related-Party Transactions

Relationship with HandsOn Global Management

The Company incurred reimbursable travel expenses to HOVS LLC and HandsOn Fund 4 I, LLC (collectively, “HGM”) of less than $0.1 million for the three months ended March 31, 2020 and 2019. As of March 31, 2020, and following a distribution of all the shares held by Ex-Sigma 2, HGM beneficially owned approximately 50% of the Company’s common stock, including shares controlled, pursuant to a voting agreement.

Pursuant to a master agreement dated January 1, 2015 between Rule 14, LLC and a subsidiary of the Company, the Company incurs marketing fees to Rule 14, LLC, a portfolio company of HGM. Similarly, the Company is party to ten master agreements with entities affiliated with HGM’s managed funds, each of which were entered into during 2015 and 2016. Each master agreement provides the Company with use of certain technology and includes a reseller arrangement pursuant to which the Company is entitled to sell these services to third parties. Any revenue earned by the Company in such third-party sale is shared 75%/25% with each of HGM’s venture affiliates in favor of the Company. The brands Zuma, Athena, Peri, BancMate, Spring, Jet, Teletype, CourtQ and Rewardio are part of the HGM managed funds. The Company has the license to use and resell such brands, as described therein. The Company incurred fees relating to these agreements of $0.4 million and less than $0.1 million for the three months ended March 31, 2020 and 2019, respectively.

Certain operating companies lease their operating facilities from HOV RE, LLC and HOV Services Limited, which are affiliates under common control with HGM. The rental expense for these operating leases was less than $0.1 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $0.4 million for each of the three months ended March 31, 2020 and 2019. These expenses are included in cost of revenue in the consolidated statements of operations.

The Company determined it is obligated to reimburse certain reimbursable expenses incurred by Ex-Sigma 2 under the terms of the Consent, Waiver and Amendment dated June 15, 2017, by and among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., SourceHOV, Novitex, Novitex Parent, L.P., Ex Sigma LLC, HOVS LLC and HandsOn Fund 4 I, LLC, amending the Novitex Business Combination agreement (the “Consent, Waiver and Amendment”). The Company incurred reimbursable expenses to Ex-Sigma 2 of $0.2 million and less than $0.1 million for the three months ended March 31, 2020 and 2019, respectively, in connection with legal expenses of Ex-Sigma 2.

Consulting Agreement

The Company receives services from Oakana Holdings, Inc. The Company and Oakana Holdings, Inc. are related through a family relationship between certain shareholders and the president of Oakana Holdings, Inc. The expense recognized for these services was less than $0.1 million for each of the three months ended March 31, 2020 and 2019, respectively.

Relationship with Apollo Global Management, LLC

The Company provides services to and receives services from certain Apollo Global Management, Inc. (“Apollo”) affiliated companies. Funds managed by Apollo held the second largest position in our Common Stock following the Novitex Business Combination and had the right to designate two of the Company’s directors pursuant to a director nomination agreement. Apollo has announced that its affiliated funds ceased being shareholders on March 11, 2020.

On November 18, 2014, one of the Company's subsidiaries entered into a master services agreement with an indirect wholly owned subsidiary of Apollo. Pursuant to this master services agreement, the Company provides printer supplies and maintenance services, including toner maintenance, training, quarterly business review and printer procurement. The Company recognized revenue of less than $0.1 million and $0.1 million under this agreement for the three months ended March 31, 2020 and 2019, respectively, in its consolidated statements of operations.

On January 18, 2017, one of the Company’s subsidiaries entered into a master purchase and professional services agreement with Caesars Enterprise Services, LLC (‘‘Caesars’’). Caesars is controlled by investment funds affiliated with Apollo. Pursuant to this master purchase and professional services agreement, the Company provides managed print services to Caesars, including general equipment operation, supply management, support services and technical support. The Company recognized revenue of $0.9 million and $1.1 million for the three months ended March 31, 2020 and 2019, respectively, in its consolidated statements of operations.

On May 5, 2017, one of the Company’s subsidiaries entered into a master services agreement with ADT LLC. ADT LLC is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, the Company provides ADT LLC with mailroom and onsite mail delivery services at an ADT LLC office location and managed print services, including supply management, equipment maintenance and technical support services. The Company recognized revenue of $0.3 million for each of the three months ended March 31, 2020 and 2019, from ADT LLC under this master services agreement in its consolidated statements of operations.

On July 20, 2017, one of the Company’s subsidiaries entered into a master services agreement with Diamond Resorts Centralized Services Company. Diamond Resorts Centralized Services Company is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, the Company provides commercial print and promotional product procurement services to Diamond Resorts Centralized Services Company, including sourcing, inventory management and fulfillment services. The Company recognized revenue of $0.9 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively, and cost of revenue of less than $0.1 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively, from Diamond Resorts Centralized Services Company under this master services agreement.

In April 2016, one of the Company’s subsidiaries entered into a master services agreement with Presidio Networked Solutions Group, LLC ("Presidio Group"), a wholly owned subsidiary of Presidio, Inc., a portion of which is owned by affiliates of Apollo. Pursuant to this master services agreement, Presidio Group provides the Company with employees, subcontractors, and/or goods and services. For each of the three months ended March 31, 2020 and 2019 there were related party expenses of $0.2 million for this service.

In June 2002, one of the Company’s subsidiaries entered into a systems purchase and license agreement with Evertec Group LLC (“Evertec”). Evertec is controlled by investment funds affiliated with Apollo. Pursuant to the agreement, the Company provided system and ongoing maintenance services as detailed in the agreement. In August, 2016, another subsidiary of the Company entered into an equipment maintenance agreement with Evertec. Pursuant to the equipment maintenance agreement, the Company provides preventive and corrective maintenance service to selected equipment listed in the agreement. The Company recognized revenue of less than $0.1 million under these agreements for each of the three months ended March 31, 2020 and 2019, respectively, in its consolidated statements of operations.

Payable and Receivable Balances with Affiliates

Payable and receivable balances with affiliates as of March 31, 2020 and December 31, 2019 are as follows below.


	March 31,				December 31,
	2020				2019
	Receivable		Payable		Receivable		Payable
HOV Services, Ltd	$	603	$	—	$	601	$	—
Rule 14		263		—		—		250
HGM		—		20		115		—
Apollo affiliated company		—		—		—		202
Oakana		—		16		—		1
Ex-Sigma 2		—		1,287		—		1,287
	$	866	$	1,323	$	716	$	1,740

Segment and Geographic Area Information

3 Months Ended

Mar. 31, 2020

Segment and Geographic Area Information

Segment and Geographic Area Information

13. Segment and Geographic Area Information

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS.

ITPS: The ITPS segment provides a wide range of solutions and services designed to aid businesses in information capture, processing, decisioning and distribution to customers primarily in the financial services, commercial, public sector and legal industries.

HS: The HS segment operates and maintains a consulting and outsourcing business specializing in both the healthcare provider and payer markets.

LLPS: The LLPS segment provides a broad and active array of legal services in connection with class action, bankruptcy labor, claims adjudication and employment and other legal matters.

The chief operating decision maker reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate Selling, general, and administrative expenses, depreciation and amortization, interest expense and sundry, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented. A reconciliation of segment profit to net loss before income taxes is presented below.


		Three months ended March 31, 2020
	ITPS		HS		LLPS		Total
Revenue	$	284,112	$	64,049	$	17,290	$	365,451
Cost of revenue (exclusive of depreciation and amortization)		235,120		44,931		12,488		292,539
Segment profit		48,992		19,118		4,802		72,912
Selling, general and administrative expenses (exclusive of depreciation and amortization)								50,374
Depreciation and amortization								23,185
Related party expense								1,551
Interest expense, net								41,588
Sundry expense, net								1,082
Other expense, net								(34,657)
Net loss before income taxes							$	(10,211)


		Three months ended March 31, 2019 (Restated)
	ITPS		HS		LLPS		Total
Revenue	$	325,172	$	61,343	$	17,842	$	404,357
Cost of revenue (exclusive of depreciation and amortization)		259,272		40,341		10,988		310,601
Segment profit		65,900		21,002		6,854		93,756
Selling, general and administrative expenses (exclusive of depreciation and amortization)								49,677
Depreciation and amortization								26,624
Related party expense								998
Interest expense, net								39,701
Sundry expense, net								2,715
Other expense, net								1,493
Net loss before income taxes							$	(27,452)

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2020
Subsequent Events.
Subsequent Events	14. Subsequent Events The Company performed its subsequent event procedures through June 29, 2020, the date these condensed consolidated financial statements were made available for issuance. Impact of COVID-19 In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease ("COVID-19") a “Public Health Emergency of International Concern,” and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic”. The Company is dependent on its workforce to deliver its solutions and services. Developments such as social distancing and stay-at-home orders from various jurisdictions may impact the Company’s ability to deploy its workforce effectively. Additionally, COVID-19 has spread to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces, suppliers, disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. While expected to be temporary, prolonged workforce disruptions may negatively impact sales in fiscal year 2020 and the Company’s overall liquidity. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate adverse effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. Amendment to Credit Agreement Under the terms of the Credit Agreement, the Company was required to deliver to the lenders the December 31, 2019 audited financial statements by April 14, 2020, which the Company failed to do. On May 18, 2020, the Company amended the Credit Agreement to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Pursuant to the amendment, the Company also amended the Credit Agreement to, among other things: restrict the borrower and its subsidiaries’ ability to designate or invest in unrestricted subsidiaries; incur certain debt; create certain liens; make certain investments; pay certain dividends or other distributions on account of its equity interests; make certain asset sales or other dispositions (or utilize the proceeds of certain asset sales to reinvest in the business); or enter into certain affiliate transactions pursuant to the negative covenants under the Credit Agreement. Further, pursuant to the amendment, the borrower under the Credit Agreement is also required to maintain a minimum Liquidity (as defined in the amendment) of $35.0 million. Upon the Company’s delivery of the annual and quarterly financial statements described above within the time frames stated within such agreements (which the Company believes it has now satisfied), the Company will, upon delivery of such financial statements, be in compliance with the Credit Agreement. Amendment to A/R Facility Since January 10, 2020, the parties have amended and waived the A/R Facility several times to address contractually, the occurrence of certain events, including among other things, the delay in delivery of annual financial statements for the fiscal year ended 2019, financial statements for the quarter ended March 31, 2020, and the Initial Servicer’s liquidity (as defined in the A/R Facility) falling below $60.0 million.

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Significant Accounting Policies

Revenue Recognition

Nature of Services

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
									2019
	2020								(Restated)
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	223,326	$	64,049	$	17,290	$	304,665	$	251,500	$	61,343	$	17,842	$	330,685
EMEA		53,906		—		—		53,906		66,678		—		—		66,678
Other		6,880		—		—		6,880		6,994		—		—		6,994
Total	$	284,112	$	64,049	$	17,290	$	365,451	$	325,172	$	61,343	$	17,842	$	404,357

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2020 and December 31, 2019:


	March 31,		December 31,
	2020		2019
Accounts receivable, net	$	242,757	$	261,400
Deferred revenues		18,851		16,621
Customer deposits		25,605		27,765
Costs to obtain and fulfill a contract		4,517		4,977

Performance Obligations

We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2020	$	36,826
2021		38,591
2022		32,814
2023		27,638
2024		26,703
2025 and thereafter		27,144
Total	$	189,716

General (Tables)

3 Months Ended

Mar. 31, 2020

General

Schedule of components of basic and diluted EPS


	Three Months Ended March 31,
			2019
	2020		(Restated)
Net loss attributable to common stockholders (A)	$	(11,230)	$	(33,086)
Weighted average common shares outstanding - basic and diluted (B)		147,195,164		145,572,221
Loss Per Share:
Basic and diluted (A/B)	$	(0.08)	$	(0.23)

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Significant Accounting Policies

Schedule of disaggregated revenue from contracts by geographic region and by segment


	Three Months Ended March 31,
									2019
	2020								(Restated)
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	223,326	$	64,049	$	17,290	$	304,665	$	251,500	$	61,343	$	17,842	$	330,685
EMEA		53,906		—		—		53,906		66,678		—		—		66,678
Other		6,880		—		—		6,880		6,994		—		—		6,994
Total	$	284,112	$	64,049	$	17,290	$	365,451	$	325,172	$	61,343	$	17,842	$	404,357

Schedule of contract balances


	March 31,		December 31,
	2020		2019
Accounts receivable, net	$	242,757	$	261,400
Deferred revenues		18,851		16,621
Customer deposits		25,605		27,765
Costs to obtain and fulfill a contract		4,517		4,977

Schedule of estimated remaining fixed consideration for unsatisfied performance obligations


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2020	$	36,826
2021		38,591
2022		32,814
2023		27,638
2024		26,703
2025 and thereafter		27,144
Total	$	189,716

Intangibles Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2020

Intangibles Assets and Goodwill

Schedule of intangible assets


	March 31, 2020
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	507,589	$	(247,272)	$	260,317
Developed technology		88,553		(86,734)		1,818
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		15,877		(11,360)		4,517
Internally developed software		44,247		(13,966)		30,281
Trademarks		23,378		(23,370)		8
Assembled workforce		4,473		(1,398)		3,075
Purchased software		26,749		(2,229)		24,520
Intangibles, net	$	719,265	$	(389,428)	$	329,837


	December 31, 2019
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	508,074	$	(237,313)	$	270,761
Developed technology		89,053		(87,109)		1,944
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		16,726		(11,749)		4,977
Internally developed software		43,261		(12,129)		31,132
Trademarks		23,378		(23,370)		8
Assembled workforce		4,473		(1,118)		3,355
Purchased software		26,749		(1,783)		24,966
Intangibles, net	$	720,114	$	(377,671)	$	342,443

(a)

Amounts include intangible assets acquired in business combinations and asset acquisitions.

(b)

The carrying amount of trade names for 2020 and 2019 is net of accumulated impairment losses of $44.1 million, of which $1.0 million was recognized in 2019.

Schedule of goodwill by reporting segment




	Beginning of Year Balance (a)			Additions		Impairments		Currency Translation Adjustments		End of Year Balance (a)
ITPS	$	571,575	$	—	$	(317,525)	$	70	$	254,120
HS		86,786		—		—		—		86,786
LLPS		49,897		—		(31,032)		—		18,865
Balance as of December 31, 2019	$	708,258	$	—	$	(348,557)	$	70	$	359,771
ITPS		254,120		—		—		(891)		253,229
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Balance as of March 31, 2020	$	359,771	$	—	$	—	$	(891)	$	358,880

(a)

Long-Term Debt and Credit Facilities (Tables)

3 Months Ended

Mar. 31, 2020

Long-Term Debt and Credit Facilities

Schedule of outstanding long-term debt instruments


	March 31,		December 31,
	2020		2019
Other (a)	$	30,807	$	30,232
First lien credit agreement (b)		357,098		360,583
Senior secured notes (c)		980,289		979,060
Secured borrowings under A/R Facility		108,366		—
Revolver		80,750		65,000
Total debt		1,557,310		1,434,875
Less: Current portion of long-term debt		(36,691)		(36,490)
Long-term debt, net of current maturities	$	1,520,619	$	1,398,385

(a)

Other debt represents the Company’s outstanding loan balances associated with various hardware and software purchases along with loans entered into by subsidiaries of the Company.

(b)

Net of unamortized original issue discount and debt issuance costs of $6.1 million and $17.7 million as of March 31, 2020 and $6.5 million and $18.9 million as of December 31, 2019.

(c)

Net of unamortized debt discount and debt issuance costs of $14.1 million and $5.6 million as of March 31, 2020 and $14.9 million and $6.0 million as of December 31, 2019.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
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-Section S99
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-Name Accounting Standards Codification
-Topic 835
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 835
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-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2020

Employee Benefit Plans

Schedule of components of the net periodic benefit cost


	Three Months Ended March 31,
			2019
	2020		(Restated)
Service cost	$	19	$	23
Interest cost		498		605
Expected return on plan assets		(644)		(626)
Amortization:
Amortization of prior service cost		26		26
Amortization of net (gain) loss		432		415
Net periodic benefit cost	$	331	$	443

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Measurement

Schedule of fair value of financial instruments


	Carrying		Fair		Fair Value Measurements
As of March 31, 2020	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,520,619	$	535,387	$	—	$	535,387	$	—
Interest rate swap liability		1,346		1,346		—		1,346		—
Acquisition contingent liability	$	721	$	721	$	—	$	—	$	721
Nonrecurring assets and liabilities:
Goodwill		358,880		358,880		—		—		358,880


	Carrying		Fair		Fair Value Measurements
As of December 31, 2019	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,398,385	$	632,796	$	—	$	632,796	$	—
Interest rate swap liability		501		501		—		501		—
Acquisition contingent liability	$	721	$	721	$	—	$	—	$	721
Nonrecurring assets and liabilities:
Goodwill		359,771		359,771		—		—		359,771

Schedule of net assets and liabilities classified as Level 3 for reconciliation


	March 31,		December 31,
	2020		2019
Balance as of Beginning of Period	$	721	$	721
Payments/Reductions		—		—
Balance as of End of Period	$	721	$	721

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Stock-Based Compensation

Summary of the status of restricted stock units


				Average
		Weighted		Remaining
	Number	Average Grant		Contractual Life	Aggregate
	of Shares	Date Fair Value		(Years)	Intrinsic Value
Balance as of December 31, 2019	309,305	$	1.99	1.19	$	616
Granted	—		—
Forfeited	—		—
Vested	—		—
Balance as of March 31, 2020	309,305	$	1.99	0.94	$	616

Schedule of stock option activity


		Weighted		Weighted		Average Remaining
		Average Grant		Average		Vesting Period	Aggregate
	Outstanding	Date Fair Value		Exercise Price		(Years)	Intrinsic Value (2)
Balance as of December 31, 2019	4,937,700	$	1.97	$	4.14	2.27	$	—
Granted	—		—
Exercised	—		—
Forfeited	(79,000)		2.69
Expired	—		—
Balance as of March 31, 2020 (1)	4,858,700	$	1.96	$	4.14	2.03	$	—

(1) None of the outstanding options are exercisable as of March 31, 2020.

(2) Exercise prices of all of the outstanding options are higher than the market price of the shares of the Company

Related-Party Transactions (Tables)

3 Months Ended

Mar. 31, 2020

Related-Party Transactions

Schedule of payable and receivable balances with affiliates


	March 31,				December 31,
	2020				2019
	Receivable		Payable		Receivable		Payable
HOV Services, Ltd	$	603	$	—	$	601	$	—
Rule 14		263		—		—		250
HGM		—		20		115		—
Apollo affiliated company		—		—		—		202
Oakana		—		16		—		1
Ex-Sigma 2		—		1,287		—		1,287
	$	866	$	1,323	$	716	$	1,740

Segment and Geographic Area Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment and Geographic Area Information

Schedule of reconciliation of segment profit to net loss before income taxes by segment information


		Three months ended March 31, 2020
	ITPS		HS		LLPS		Total
Revenue	$	284,112	$	64,049	$	17,290	$	365,451
Cost of revenue (exclusive of depreciation and amortization)		235,120		44,931		12,488		292,539
Segment profit		48,992		19,118		4,802		72,912
Selling, general and administrative expenses (exclusive of depreciation and amortization)								50,374
Depreciation and amortization								23,185
Related party expense								1,551
Interest expense, net								41,588
Sundry expense, net								1,082
Other expense, net								(34,657)
Net loss before income taxes							$	(10,211)


		Three months ended March 31, 2019 (Restated)
	ITPS		HS		LLPS		Total
Revenue	$	325,172	$	61,343	$	17,842	$	404,357
Cost of revenue (exclusive of depreciation and amortization)		259,272		40,341		10,988		310,601
Segment profit		65,900		21,002		6,854		93,756
Selling, general and administrative expenses (exclusive of depreciation and amortization)								49,677
Depreciation and amortization								26,624
Related party expense								998
Interest expense, net								39,701
Sundry expense, net								2,715
Other expense, net								1,493
Net loss before income taxes							$	(27,452)

General - Going Concern (Details) - USD ($) $ in Thousands					3 Months Ended		12 Months Ended
General - Going Concern (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Mar. 23, 2020	Mar. 16, 2020	Jan. 10, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Jun. 26, 2020	May 18, 2020
Net loss					$ 12,670	$ 32,172	$ 509,100	$ 169,800
Impairment of goodwill and other intangible assets							349,600	48,100
Net cash used in operating activities					(35,373)	$ (42,648)	(63,900)	23,600
Working Capital Deficit					16,900		147,100	123,500
Interest Paid on Long Term Debt							144,500
Accrued liability					57,400
Minimum Liquidity under credit agreement				$ 40,000	60,000		40,000	$ 35,000
Accumulated deficit					1,224,178		1,211,508
Cash and cash equivalents					113,013		$ 6,198
Amount of facility				$ 160,000
Facility term (years)				5 years
Membership interests			$ 40,000
Adjustment of purchase consideration			2,000
Cash Saving In Temporary Freeze Of Employee Related Cost		$ 23,400
Cash Saving Due To Refund Of Tax Relating To Aid Relief	$ 29,000
Subsequent Events
Minimum Liquidity under credit agreement										$ 35,000
Cash and cash equivalents									$ 89,000
Borrowing facility									$ 13,000
SourceHOV
Gain on sale of investments					35,300
Membership interests			$ 40,000
Adjustment of purchase consideration					$ 2,000

General - Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Jul. 31, 2017	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Net loss per share
Common stock, par value (in dollars per share)		$ 0.0001		$ 0.0001
Anti dilutive shares		5,168,005	4,223,597
Net loss attributable to common stockholders		$ (11,230)	$ (33,086)
Weighted average common shares outstanding - basic and diluted		147,195,164	145,572,221
Loss per share - Basic and diluted (in dollars per share)		$ (0.08)	$ (0.23)
Common stock, shares returned		4,570,734
Series A Preferred Stock
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share		4,022,415
Warrants
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share	35,000,000

General - Sale of SourceHOV Tax, LLC (Details) - USD ($) $ in Millions		3 Months Ended
	Mar. 16, 2020	Mar. 31, 2020
Membership interests	$ 40.0
Adjustment of purchase consideration	2.0
SourceHOV
Membership interests	$ 40.0
Gain on sale of investments		$ 35.3
Adjustment of purchase consideration		$ 2.0

Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenues
Revenue	$ 365,451	$ 404,357
United States
Disaggregation of Revenues
Revenue	304,665	330,685
EMEA
Disaggregation of Revenues
Revenue	53,906	66,678
Other
Disaggregation of Revenues
Revenue	6,880	6,994
ITPS
Disaggregation of Revenues
Revenue	284,112	325,172
ITPS \| United States
Disaggregation of Revenues
Revenue	223,326	251,500
ITPS \| EMEA
Disaggregation of Revenues
Revenue	53,906	66,678
ITPS \| Other
Disaggregation of Revenues
Revenue	6,880	6,994
HS
Disaggregation of Revenues
Revenue	64,049	61,343
HS \| United States
Disaggregation of Revenues
Revenue	64,049	61,343
LLPS
Disaggregation of Revenues
Revenue	17,290	17,842
LLPS \| United States
Disaggregation of Revenues
Revenue	$ 17,290	$ 17,842

Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Significant Accounting Policies
Accounts receivable, net	$ 242,757	$ 261,400
Deferred revenues	18,851	16,621
Customer deposits	25,605	27,765
Costs to obtain and fulfill a contract	4,517	4,977
Unbilled receivables, net	24,200	$ 34,100
Revenue recognized from deferred revenue	7,000
Amortization of contract costs	$ 700
Practical expedient on incremental costs of obtaining contracts	true

Significant Accounting Policies - Performance Obligations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Significant Accounting Policies
Contracts with an original expected length	true
Remainder of 2020	$ 36,826
2021	38,591
2022	32,814
2023	27,638
2024	26,703
2025 and thereafter	27,144
Total	$ 189,716

Intangibles Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Mar. 31, 2020
Intangibles
Gross Carrying Amount	$ 720,114	$ 719,265
Amortization	(377,671)	(389,428)
Intangible Asset, net	342,443	329,837
Impairment of goodwill	348,557
Customer relationships
Intangibles
Gross Carrying Amount	508,074	507,589
Amortization	(237,313)	(247,272)
Intangible Asset, net	270,761	260,317
Developed technology
Intangibles
Gross Carrying Amount	89,053	88,553
Amortization	(87,109)	(86,734)
Intangible Asset, net	1,944	1,818
Trade names
Intangibles
Gross Carrying Amount	8,400	8,400
Amortization	(3,100)	(3,100)
Intangible Asset, net	5,300	5,300
Additional impairment charge	1,000
Accumulated impairment losses		44,100
Outsource contract costs
Intangibles
Gross Carrying Amount	16,726	15,877
Amortization	(11,749)	(11,360)
Intangible Asset, net	4,977	4,517
Internally developed software
Intangibles
Gross Carrying Amount	43,261	44,247
Amortization	(12,129)	(13,966)
Intangible Asset, net	31,132	30,281
Trademarks
Intangibles
Gross Carrying Amount	23,378	23,378
Amortization	(23,370)	(23,370)
Intangible Asset, net	8	8
Assembled workforce
Intangibles
Gross Carrying Amount	4,473	4,473
Amortization	(1,118)	(1,398)
Intangible Asset, net	3,355	3,075
Purchased software
Intangibles
Gross Carrying Amount	26,749	26,749
Amortization	(1,783)	(2,229)
Intangible Asset, net	$ 24,966	$ 24,520

Intangibles Assets and Goodwill - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill
Beginning of Year Balance	$ 359,771	$ 708,258
Reductions		(348,557)
Currency Translation Adjustments	(891)	70
End of Year Balance	358,880	359,771	$ 708,258
Accumulated impairment losses	560,900		212,300
Impairment of goodwill and other intangible assets		349,600	48,100
ITPS
Goodwill
Beginning of Year Balance	254,120	571,575
Reductions		(317,525)
Currency Translation Adjustments	(891)	70
End of Year Balance	253,229	254,120	571,575
HS
Goodwill
Beginning of Year Balance	86,786	86,786
End of Year Balance	86,786	86,786	86,786
LLPS
Goodwill
Beginning of Year Balance	18,865	49,897
Reductions		(31,032)
End of Year Balance	$ 18,865	$ 18,865	$ 49,897

Long-Term Debt and Credit Facilities - Senior Secured Notes (Details) - USD ($) $ in Millions	Jan. 10, 2020	Jul. 12, 2017
Debt instruments
Principal amount	$ 160.0
Senior secured notes
Debt instruments
Principal amount		$ 1,000.0
Interest rate (in percent)		10.00%

Long-Term Debt and Credit Facilities - Debt Refinancing (Details) - USD ($) $ in Millions	Jul. 12, 2017	Mar. 31, 2020	Jan. 10, 2020	Dec. 31, 2019
Debt instruments
Debt Instrument, Face Amount			$ 160.0
Senior secured term loan
Debt instruments
Debt Instrument, Face Amount	$ 350.0
Original issue discount	$ 7.0
Principal percentage of each of first eight payments (as a percent)	0.60%
Principal percentage of each payment thereafter (as a percent)	1.30%
Senior secured term loan \| LIBOR
Debt instruments
Applicable margin rate	7.50%
Floor interest rate	1.00%
Senior secured term loan \| Base rate
Debt instruments
Principal percentage of each payment thereafter (as a percent)	6.50%
Senior secured revolving facility
Debt instruments
Maximum borrowing capacity	$ 100.0
Letters of credit outstanding		$ 19.2		$ 20.6
Senior secured revolving facility \| LIBOR
Debt instruments
Principal percentage of each payment thereafter (as a percent)	7.00%
Senior secured revolving facility \| Base rate
Debt instruments
Principal percentage of each payment thereafter (as a percent)	6.00%

Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands	Apr. 16, 2019	Jul. 13, 2018	Mar. 31, 2020	Dec. 31, 2019
Debt instruments
Outstanding amount of term loans			$ 1,557,310	$ 1,434,875
Proceeds from refinancing term loans	$ 30,000	$ 30,000
First Amendment
Debt instruments
Proceeds from refinancing term loans		$ 343,400
Reduction in interest rate (in percentage)		100.00%
First Amendment \| Federal funds rate
Debt instruments
Variable interest rate (as a percent)		0.50%
First Amendment \| LIBOR
Debt instruments
Floor interest rate		1.00%
Variable interest rate (as a percent)		6.50%
First Amendment \| One-month adjusted LIBOR
Debt instruments
Variable interest rate (as a percent)		1.00%
First Amendment \| Base rate
Debt instruments
Variable interest rate (as a percent)		5.50%
Senior secured revolving facility
Debt instruments
Outstanding amount of term loans		$ 343,400
Maximum debt issuance costs for new lenders exceeded 10% test		100
Senior secured revolving facility \| First Amendment
Debt instruments
Debt issuance costs		1,000
Amortization expense of debt issuance costs		1,000
Write off of previously recognized debt issuance costs		$ 100

Long-Term Debt and Credit Facilities - Incremental Term Loan (Details) - USD ($) $ in Millions			3 Months Ended
	Apr. 16, 2019	Jul. 13, 2018	Jun. 30, 2019	Sep. 30, 2018
Debt instruments
Proceeds from incremental term loans	$ 30.0	$ 30.0
Repricing Term Loan
Debt instruments
Debt extinguishment costs			$ 1.4	$ 1.1

Long-Term Debt and Credit Facilities - Receivables Securitization (Details) - USD ($) $ in Millions	Mar. 16, 2020	Jan. 10, 2020	May 18, 2020	Mar. 31, 2020
Membership interests	$ 40.0
A/R Facility
Accounts Receivable from Securitization		$ 160.0
Accounts Receivable, Securitization, Term		5 years
Minimum liquidity for A/R facility		$ 60.0
Variable interest rate (as a percent)		4.50%
Outstanding borrowings under the facility				$ 108.4
A/R Facility \| Base rate
Variable interest rate (as a percent)		3.75%
A/R Facility \| Federal funds rate
Variable interest rate (as a percent)		0.50%
A/R Facility \| One-month adjusted LIBOR
Variable interest rate (as a percent)		1.00%
A/R Facility \| LIBOR
Variable interest rate (as a percent)		4.75%
Floor interest rate		1.00%
Subsequent Events \| A/R Facility
Minimum liquidity for A/R facility			$ 35.0

Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt instruments
Total debt	$ 1,557,310	$ 1,434,875
Less: Current portion of long-term debt	(36,691)	(36,490)
Long-term debt, net of current maturities	1,520,619	1,398,385
Senior secured notes
Debt instruments
Total debt	980,289	979,060
Other
Debt instruments
Total debt	30,807	30,232
First lien credit agreement
Debt instruments
Total debt	357,098	360,583
Debt discount	6,100	6,500
Unamortized debt issuance costs	17,700	18,900
Senior secured notes
Debt instruments
Debt discount	14,100	14,900
Unamortized debt issuance costs	5,600	6,000
A/R Facility
Debt instruments
Total debt	108,366
Revolver
Debt instruments
Total debt	$ 80,750	$ 65,000

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Income Taxes
Income tax (expense) benefit	$ (2,459)	$ (4,720)
Actual effective tax rate	(24.10%)	17.20%
Statutory tax rate	21.00%	21.00%
Increase (decrease) in valuation allowance	$ 3,100

Employee Benefit Plans - Germany & UK (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
German Pension Plan \| Unfunded Plan
Pension plans
Plan assets	$ 0.0
German Pension Plan \| Unfunded Plan \| Minimum
Pension plans
Qualifying period	10 years
U.K. Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Asterion Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Norway Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years

Employee Benefit Plans - Tax Effect on Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs
Net actuarial loss	$ 7.6	$ 8.1
Deferred tax benefit		$ 2.0

Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net periodic benefit cost
Employer contributions	$ 600	$ 600
Pension [Member]
Net periodic benefit cost
Service cost	19	23
Interest cost	498	605
Expected return on plan assets	(644)	(626)
Amortization of prior service cost	26	26
Amortization of net (gain) loss	432	415
Net periodic benefit cost	$ 331	$ 443

Commitments and Contingencies (Details) - USD ($)	Mar. 26, 2020	Jan. 30, 2020	Apr. 13, 2018	Sep. 21, 2017	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Feb. 20, 2014
Commitments and Contingencies
Shares returned to company					4,570,734
Accrued liability					$ 57,400,000
Banc Tec
Commitments and Contingencies
Contingent Consideration fair value						$ 700,000	$ 700,000	$ 700,000
Earnout sought			$ 8,100,000
Petitioners \| SourceHOV
Commitments and Contingencies
Court determined fair value of stock at time of business combination (per share)		$ 4,591
Amount awarded to petitioners	$ 57,698,426
Petitioners \| Ex-Sigma 2, LLC
Commitments and Contingencies
Shares returned to company					4,570,734
Minimum \| Petitioners \| SourceHOV
Commitments and Contingencies
Argued fair value per share				$ 1,633.85
Maximum \| Petitioners \| SourceHOV
Commitments and Contingencies
Argued fair value per share				$ 5,079.28
Fair value guarantee \| Common Stock \| SourceHOV
Commitments and Contingencies
Number of shares owned				10,304

Fair Value Measurement (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Carrying amounts and estimated fair values of financial instruments
Goodwill	$ 358,880	$ 359,771	$ 708,258
Senior secured term loan
Assets and liabilities measured at fair value
Fair value percentage	30.00%
Senior secured notes
Assets and liabilities measured at fair value
Fair value percentage	24.00%
Level 3
Reconciliation of net assets and liabilities
Balance as of Beginning of Period	$ 721	721
Payments/Reductions
Balance as of End of Period	721	721
Carrying Amount \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt	1,520,619	1,398,385
Interest rate swap	1,346	501
Acquisition contingent liability	721	721
Carrying Amount \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill	358,880	359,771
Fair Value \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt	535,387	632,796
Interest rate swap	1,346	501
Acquisition contingent liability	721	721
Fair Value \| Recurring assets and liabilities \| Level 2
Carrying amounts and estimated fair values of financial instruments
Long-term debt	535,387	632,796
Interest rate swap	1,346	501
Fair Value \| Recurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability	721	721
Fair Value \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill	358,880	359,771
Fair Value \| Nonrecurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Goodwill	$ 358,880	$ 359,771

Stock-Based Compensation (Details) - RSU's - 2013 Plan - shares	Mar. 31, 2020	Jul. 12, 2017
Stock-based compensation
Unvested RSU's	0	9,880
SourceHOV
Stock-based compensation
Restricted stock units outstanding		24,535

Stock-Based Compensation - Stock Incentive Plan (Details) - shares	Mar. 31, 2020	Dec. 31, 2019	Jan. 17, 2018
Exela 2018 Stock Incentive Plan
Common stock shares authorized	1,600,000,000	1,600,000,000
2018 Plan
Exela 2018 Stock Incentive Plan
Common stock shares authorized			8,323,764

Stock-Based Compensation - Restricted Stock Unit Grants (Details) - RSU's - 2018 Plan - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Number of Shares
Balance at the beginning of the period (in shares)	309,305
Balance at the end of the period (in shares)	309,305	309,305
Weighted Average Grant Date Fair Value
Balance at the beginning of the period	$ 1.99
Balance at the end of the period	$ 1.99	$ 1.99
Average Remaining Contractual Life (Years)
Weighted average remaining contractual life (in years)	11 months 9 days	1 year 2 months 9 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding	$ 616	$ 616
Minimum
Stock-Based Compensation
Vesting period	1 year
Maximum
Stock-Based Compensation
Vesting period	2 years

Stock-Based Compensation - Options (Details) - 2018 Plan - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
	Jan. 17, 2018	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Unrecognized compensation expense
Unrecognized compensation expense		$ 5.1
Selling, general and administrative expense
Unrecognized compensation expense
Total compensation expense		$ 0.9	$ 2.8
Stock options
Stock-based compensation
Minimum fair market value per share of underlying stock used to determine option grant price, as a percent	100.00%
Expiration of stock options	10 years
Outstanding
Outstanding Balance at beginning of the year (in shares)		4,937,700
Forfeited (in shares)		(79,000)
Outstanding Balance at the end of the year (in shares)		4,858,700		4,937,700
Weighted Average Exercise Price
Outstanding Balance at the beginning of the year		$ 4.14
Outstanding Balance at the end of the year (in shares)		4.14		$ 4.14
Weighted average Grant Date fair Value
Outstanding balance at the beginning of the period		1.97
Forfeited		2.69
Outstanding balance at the end of the period		$ 1.96		$ 1.97
Additional information
Average Remaining Vesting Period		2 years 11 days		2 years 3 months 7 days
Stock options \| Minimum
Stock-based compensation
Vesting period		2 years
Stock options \| Maximum
Stock-based compensation
Vesting period		4 years

Stockholders’ Equity - Common Stock (Details)	3 Months Ended
Stockholders’ Equity - Common Stock (Details)	Mar. 31, 2020 Vote shares	Dec. 31, 2019 shares
Common Stock
Common Stock, shares authorized	1,600,000,000	1,600,000,000
Number of voting rights entitled for each share of Common Stock held \| Vote	1
Common stock, shares issued	154,866,550	153,638,836
Common Stock, shares, outstanding	147,508,669	150,851,689
Common stock, shares returned	4,570,734
Shares repurchased held in treasury (in shares)	4,570,734
Series A Preferred Stock
Common Stock
Preferred shares converted to common (in shares)	1,004,183
Common Stock
Common Stock
Preferred shares converted to common (in shares)	1,227,714
Shares repurchased held in treasury (in shares)	(4,570,734)

Stockholders’ Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jan. 31, 2020	Dec. 31, 2019	Jul. 12, 2017
Preferred Stock
Preferred stock, shares authorized	20,000,000			20,000,000
Preferred stock, shares outstanding	3,290,050			4,294,233
Preferred Stock, par value (in dollars per share)	$ 0.0001			$ 0.0001
Dividends, Preferred Stock	$ (1,440)	$ 914
Series A Preferred Stock
Preferred Stock
Preferred stock, shares outstanding	3,290,050			4,294,233
Preferred Stock, par value (in dollars per share)	$ 0.0001
Conversion ratio to Common Stock	1.2226
Preferred Stock, cumulative dividends rate (in percentage)	10.00%
Conversion of Series A Preferred stock to common shares	1,004,183
Cumulative accrued but unpaid dividends					$ 8,000
Per share average of cumulative preferred dividends (in dollars per share)	$ 0.4	$ 0.2
Common Stock
Preferred Stock
Dividends, Preferred Stock	$ 900
Conversion of shares (in shares)	1,227,714
Common Stock
Preferred Stock
Conversion of Series A Preferred stock to common shares	1,227,714
Common Stock \| Series A Preferred Stock
Preferred Stock
Accumulated preferred stock, Dividends	$ (2,300)
Common Stock \| Common Stock
Preferred Stock
Accumulated preferred stock, Dividends			$ 1,400

Stockholders’ Equity - Treasury Stock (Details) - shares	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Nov. 08, 2017
Stockholders’ Equity
Treasury stock, shares authorized			5,000,000
Treasury shares	7,357,881	2,787,147
Shares returned in connection with the Appraisal Action as result of repayment of Margin Loan (in shares)	4,570,734
Share Repurchased (in shares)	2,787,147

Stockholders’ Equity - Warrants (Details)	12 Months Ended
Stockholders’ Equity - Warrants (Details)	Dec. 31, 2019 item $ / shares shares
Warrants
Number of Common Stock each warrant may purchase	0.5
Exercise price of warrant per half of Common Stock \| $ / shares	$ 5.75
Exercise price of warrant per one Common Stock (in US$ per share) \| $ / shares	$ 11.50
Expiration of warrants from business acquisition date	5 years
Warrant redemption price (in US$ per share) \| $ / shares	$ 0.01
Minimum written notice period of redemption	30 days
Minimum common stock sales price for exercise of redemption right (in US$ per share) \| $ / shares	$ 24.00
Minimum trading days within 30-day period at $24 per share for exercise of redemption right \| item	20
Trading day period for exercise of redemption right	30 days
Period of the 30-day period prior to notice of redemption	3 days
Period of current registration effectivity prior to 30-day trading period	5 days
Warrants
Warrants
Warrants outstanding	34,988,302
Number of warrants separated from the original unit	34,988,302
Number of warrants not separated from the original unit	11,698
Warrants \| IPO
Warrants
Units issued	35,000,000
Common stock included in units	1
Warrants included in units	1

Related-Party Transactions - Leasing Transactions (Details) - Affiliate of largest stockholder - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Related-Party Transactions
Rental expense on operating leases under ASC 842		$ 0.1
Maximum
Related-Party Transactions
Rental expense on operating leases under ASC 842	$ 0.1

Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Related-Party Transactions
Related party expense	$ 1,551	$ 998
Consulting Services \| Oakana Holdings Inc \| Maximum
Related-Party Transactions
Related party expense	$ 100	$ 100

Related-Party Transactions - Relationship with HandsOn Global Management (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2016	Dec. 31, 2015
Related-Party Transactions
Amount of related party transaction	$ 1,551	$ 998
Related party expense	1,551	998
HGM \| Travel Expense \| Maximum
Related-Party Transactions
Amount of related party transaction	100	100
Entities affiliated with HGM managed funds \| Master Service Agreement
Related-Party Transactions
Revenue share percentage			25.00%	25.00%
SourceHOV \| Master Service Agreement
Related-Party Transactions
Revenue share percentage			75.00%	75.00%
SourceHOV \| Entities affiliated with HGM managed funds \| Master Service Agreement
Related-Party Transactions
Related party expense	$ 400
SourceHOV \| Entities affiliated with HGM managed funds \| Master Service Agreement \| Maximum
Related-Party Transactions
Related party expense		$ 100

Related-Party Transactions - Relationship with HOV Services, Ltd (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Related-Party Transactions
Amount of related party transaction	$ 1,551	$ 998
HOV Services, Ltd \| Data Capture And Technology Services \| Cost of revenue
Related-Party Transactions
Amount of related party transaction	$ 400	$ 400

Related Party Transactions - Relationship with Apollo Global Management, LLC (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Related-Party Transactions
Related party expense	$ 1,551	$ 998
Management Holdings \| Master Service Agreement
Related-Party Transactions
Revenue from related parties		100
Management Holdings \| Master Service Agreement \| Maximum
Related-Party Transactions
Revenue from related parties	100
Caesars \| Master Service Agreement
Related-Party Transactions
Revenue from related parties	900	1,100
ADT LLC \| Master Service Agreement
Related-Party Transactions
Revenue from related parties	300	300
Diamond Resorts Centralized Services \| Master Service Agreement
Related-Party Transactions
Revenue from related parties	900	1,700
Related party cost of revenue		100
Diamond Resorts Centralized Services \| Master Service Agreement \| Maximum
Related-Party Transactions
Related party cost of revenue	100
Presidio Group \| Master Service Agreement
Related-Party Transactions
Related party expense	200	200
Evertec \| Equipment Maintenance Agreement \| Maximum
Related-Party Transactions
Revenue from related parties	$ 100	$ 100

Related Party Transactions - Relationship with Ex-Sigma and Ex-Sigma 2 (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Related Party Transaction [Line Items]
Related party payables	$ 1,323	$ 1,740
Legal Expenses \| Ex-Sigma 2, LLC
Related Party Transaction [Line Items]
Related party payables	$ 200
Legal Expenses \| Ex-Sigma 2, LLC \| Maximum
Related Party Transaction [Line Items]
Related party payables			$ 100

Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Receivable and Payable Balances with Affiliates
Receivable balances with affiliates	$ 866	$ 716
Increase to related party payables	1,323	1,740
HOV Services, Ltd
Receivable and Payable Balances with Affiliates
Receivable balances with affiliates	603	601
Rule 14, LLC
Receivable and Payable Balances with Affiliates
Receivable balances with affiliates	263
Increase to related party payables		250
HGM
Receivable and Payable Balances with Affiliates
Receivable balances with affiliates		115
Increase to related party payables	20
Apollo
Receivable and Payable Balances with Affiliates
Increase to related party payables		202
Oakana Holdings Inc
Receivable and Payable Balances with Affiliates
Increase to related party payables	16	1
Ex-Sigma
Receivable and Payable Balances with Affiliates
Increase to related party payables	$ 1,287	$ 1,287

Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment information
Number of segments \| segment	3
Revenue	$ 365,451	$ 404,357
Cost of revenue (exclusive of depreciation and amortization)	292,539	310,601
Segment profit	72,912	93,756
Selling, general and administrative expenses (exclusive of depreciation and amortization)	50,374	49,677
Depreciation and amortization	23,185	26,624
Impairment of goodwill and other intangible assets			$ 349,600	$ 48,100
Related party expense	1,551	998
Interest expense, net	41,588	39,701
Sundry expense, net	1,082	2,715
Other expense, net	(34,657)	1,493
Net loss before income taxes	(10,211)	(27,452)
ITPS
Segment information
Revenue	284,112	325,172
Cost of revenue (exclusive of depreciation and amortization)	235,120	259,272
Segment profit	48,992	65,900
HS
Segment information
Revenue	64,049	61,343
Cost of revenue (exclusive of depreciation and amortization)	44,931	40,341
Segment profit	19,118	21,002
LLPS
Segment information
Revenue	17,290	17,842
Cost of revenue (exclusive of depreciation and amortization)	12,488	10,988
Segment profit	$ 4,802	$ 6,854

Subsequent Events (Details) - USD ($) $ in Millions	May 18, 2020	Mar. 31, 2020	Jan. 10, 2020	Dec. 31, 2019	Dec. 31, 2018
Subsequent Event [Line Items]
Minimum Liquidity under credit agreement		$ 60.0	$ 40.0	$ 40.0	$ 35.0
Subsequent Events
Subsequent Event [Line Items]
Minimum Liquidity under credit agreement	$ 35.0