0001558370-21-003326 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 18, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-36788
Entity Registrant Name	Exela Technologies, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1347291
Entity Address, Address Line One	2701 E. Grauwyler Rd.
Entity Address, City or Town	Irving
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75061
City Area Code	844
Local Phone Number	935-2832
Title of 12(b) Security	Common Stock, Par Value $0.0001 per share
Trading Symbol	XELA
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 42,280,594
Entity Common Stock, Shares Outstanding		58,968,599
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001620179
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 68,221	$ 6,198
Restricted cash	2,088	7,901
Accounts receivable, net of allowance for doubtful accounts of $5,647 and $4,975, respectively	206,868	261,400
Related party receivables and prepaid expenses	711	716
Inventories, net	14,314	19,047
Prepaid expenses and other current assets	31,091	23,663
Total current assets	323,293	318,925
Property, plant and equipment, net of accumulated depreciation of $193,760 and $176,995, respectively	87,851	113,637
Operating lease right-of-use assets, net	68,861	93,627
Goodwill	359,781	359,771
Intangible assets, net	292,664	342,443
Deferred income tax assets	6,606	12,032
Other noncurrent assets	18,723	17,889
Total assets	1,157,779	1,258,324
Current liabilities
Accounts payable	76,027	86,167
Related party payables	97	1,740
Income tax payable	2,466	352
Accrued liabilities	126,399	121,553
Accrued compensation and benefits	63,467	48,574
Accrued interest	48,769	48,769
Customer deposits	21,277	27,765
Deferred revenue	16,377	16,282
Obligation for claim payment	29,328	39,156
Current portion of finance lease liabilities	12,231	13,788
Current portion of operating lease liabilities	18,349	25,345
Current portion of long-term debts	39,952	36,490
Total current liabilities	454,739	465,981
Long-term debt, net of current maturities	1,498,004	1,398,385
Finance lease liabilities, net of current portion	13,287	20,272
Pension liabilities, net	35,515	25,681
Deferred income tax liabilities	9,569	7,996
Long-term income tax liabilities	2,759	2,806
Operating lease liabilities, net of current portion	56,814	73,282
Other long-term liabilities	13,624	6,962
Total liabilities	2,084,311	2,001,365
Commitments and Contingencies (Note 14)
Stockholders' equity (deficit)
Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 51,693,931 shares issued and 49,242,225 shares outstanding at December 31, 2020 and 51,212,945 shares issued and 50,283,896 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 December 31, 2020 and 4,294,233 shares issued and outstanding at December 31, 2019	1	1
Additional paid in capital	446,739	445,452
Less: Common Stock held in treasury, at cost; 2,451,706 shares at December 31, 2020 and 929,049 shares at December 31, 2019	(10,949)	(10,949)
Equity-based compensation	52,183	49,336
Accumulated deficit	(1,390,038)	(1,211,508)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(7,419)	(7,329)
Unrealized pension actuarial losses, net of tax	(17,064)	(8,059)
Total accumulated other comprehensive loss	(24,483)	(15,388)
Total stockholders' deficit	(926,532)	(743,041)
Total liabilities and stockholders' deficit	$ 1,157,779	$ 1,258,324

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 5,647	$ 4,975
Accumulated depreciation	$ 193,760	$ 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	51,693,931	51,212,945
Common stock, shares outstanding	49,242,225	50,283,896
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)	2,451,706	929,049

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Operations
Revenue	$ 314,109	$ 305,280	$ 307,722	$ 365,451	$ 393,586	$ 373,545	$ 390,849	$ 404,357	$ 1,292,562	$ 1,562,337	$ 1,586,222
Cost of revenue (exclusive of depreciation and amortization)	254,995	234,222	241,788	292,539	314,858	295,445	303,831	310,601	1,023,544	1,224,735	1,213,403
Selling, general and administrative expenses (exclusive of depreciation and amortization)	45,879	42,837	47,014	50,374	49,678	48,347	51,162	49,677	186,104	198,864	184,908
Depreciation and amortization	25,826	22,095	22,847	23,185	24,421	25,079	24,779	26,624	93,953	100,903	138,077
Impairment of goodwill and other intangible assets					252,399	97,158				349,557	48,127
Related party expense	1,324	1,360	1,146	1,551	1,742	1,430	5,331	998	5,381	9,501	12,403
Operating loss	(13,915)	4,766	(5,073)	(2,198)	(249,512)	(93,914)	5,746	16,457	(16,420)	(321,223)	(10,696)
Other expense (income), net:
Interest expense, net	44,238	43,612	44,440	41,588	43,216	40,573	39,959	39,701	173,878	163,449	155,991
Debt modification and extinguishment costs	9,589						1,404		9,589	1,404	1,067
Sundry expense (income), net	98	(434)	(899)	1,082	(600)	165	(1,311)	2,715	(153)	969	(3,271)
Other expense (income), net	10,867	(10,414)	(584)	(34,657)	10,003	406	2,527	1,493	(34,788)	14,429	(3,030)
Net loss before income taxes	(78,707)	(27,998)	(48,030)	(10,211)	(302,131)	(135,058)	(36,833)	(27,452)	(164,946)	(501,474)	(161,453)
Income tax expense	(10,144)	(320)	(661)	(2,459)	(1,953)	3,769	(4,738)	(4,720)	(13,584)	(7,642)	(8,353)
Net loss	(88,851)	(28,318)	(48,691)	(12,670)	(304,084)	(131,289)	(41,571)	(32,172)	(178,530)	(509,116)	(169,806)
Dividend equivalent on Series A Preferred Stock related to beneficial conversion feature									0	0	0	$ (16,400)
Cumulative dividends for Series A Preferred Stock	(915)	(976)	(858)		(597)	(884)	(914)	(914)	(1,309)	(3,309)	(3,655)
Net loss attributable to common stockholders	$ (89,766)	$ (29,294)	$ (49,549)	$ (11,230)	$ (304,681)	$ (132,173)	$ (42,485)	$ (33,086)	$ (179,839)	$ (512,425)	$ (173,461)
Loss per share - Basic and diluted (in dollars per share)	$ (1.82)	$ (0.60)	$ (1.01)	$ (0.23)	$ (6.27)	$ (2.72)	$ (0.88)	$ (0.68)	$ (3.66)	$ (10.55)	$ (3.52)

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive Loss
Net loss	$ (178,530)	$ (509,116)	$ (169,806)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(90)	(906)	(6,204)
Unrealized pension actuarial gains (losses), net of tax	(9,005)	1,242	1,753
Total other comprehensive loss, net of tax	$ (187,625)	$ (508,780)	$ (174,257)

- Definition

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

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+ Details

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, 2017	$ 15	$ 1	$ (249)	$ 445,452	$ 34,085	$ (219)	$ (11,054)	$ (519,827)	$ (51,796)
Beginning balance (in shares) at Dec. 31, 2017	50,176,384	6,194,233	16,433
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(169,806)	(169,806)
Equity-based compensation					6,562				6,562
Foreign currency translation adjustment						(6,204)			(6,204)
Net realized pension actuarial gains, net of tax							1,753		1,753
RSU's exercised					256				256
RSU's exercised (in shares)	42,307
Stock option expense					828				828
Preferred shares converted to common shares (in shares)	662,256	(1,625,000)
Shares repurchased			$ (10,093)						(10,093)
Shares repurchased (in shares)	(833,295)		833,295
Ending balance (ASU 2014-09) at Dec. 31, 2018								(12,759)	(12,759)
Ending balance at Dec. 31, 2018	$ 15	$ 1	$ (10,342)	445,452	41,731	(6,423)	(9,301)	(702,392)	(241,259)
Ending balance (in shares) at Dec. 31, 2018	50,047,652	4,569,233	849,728
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(509,116)	(509,116)
Equity-based compensation					7,828				7,828
Foreign currency translation adjustment						(906)			(906)
Net realized pension actuarial gains, net of tax							1,242		1,242
RSU's vested (in shares)	203,494
Withholding of employee taxes on vested RSUs					(223)				(223)
Preferred shares converted to common shares (in shares)	112,071	(275,000)
Shares repurchased			$ (607)						(607)
Shares repurchased (in shares)	(79,321)		79,321
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	50,283,896	4,294,233	929,049
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(178,530)	(178,530)
Equity-based compensation					2,846				2,846
Foreign currency translation adjustment						(90)			(90)
Net realized pension actuarial gains, net of tax							(9,005)		$ (9,005)
RSU's vested (in shares)	71,747
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares)	(1,523,578)		1,523,578
Preferred shares converted to common shares (in shares)	409,238	(1,004,183)
Shares repurchased (in shares)									(929,049)
Settlement gain on related party payable to Ex-Sigma 2				1,287					$ 1,287
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018	921		(921)						3,433
Ending balance at Dec. 31, 2020	$ 15	$ 1	$ (10,949)	$ 446,739	$ 52,183	$ (7,419)	$ (17,064)	$ (1,390,038)	$ (926,532)
Ending balance (in shares) at Dec. 31, 2020	49,242,225	3,290,050	2,451,706

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net loss	$ (178,530)	$ (509,116)	$ (169,806)
Adjustments to reconcile net loss
Depreciation and amortization	93,953	100,903	138,077
Original issue discount and debt issuance cost amortization	15,117	11,777	10,913
Debt modification and extinguishment costs	8,296	1,049	103
Impairment of goodwill and other intangible assets		349,557	48,127
Provision for doubtful accounts	422	4,304	2,767
Deferred income tax provision	7,940	1,093	3,220
Share-based compensation expense	2,846	7,827	7,647
Unrealized foreign currency losses	(414)	(511)	(1,180)
Loss (gain) on sale of assets	(43,338)	556	2,687
Fair value adjustment for interest rate swap	(375)	4,337	(2,540)
Change in operating assets and liabilities, net of effect from acquisitions
Accounts receivable	54,538	4,410	(19,319)
Prepaid expenses and other assets	(1,379)	(4,825)	(2,820)
Accounts payable and accrued liabilities	12,015	(19,588)	8,815
Related party payables	(353)	(14,339)	918
Additions to outsource contract costs	(519)	(1,285)	(4,009)
Net cash provided by (used in) operating activities	(29,781)	(63,851)	23,600
Cash flows from investing activities
Purchase of property, plant and equipment	(11,663)	(14,360)	(20,072)
Additions to internally developed software	(3,825)	(6,182)	(7,438)
Cash paid for acquisition, net of cash received	(12,500)	(5,000)	(34,810)
Cash paid for earnouts	(700)
Proceeds from sale of assets	50,126	360	3,568
Net cash provided by (used in) investing activities	21,438	(25,182)	(58,752)
Cash flows from financing activities
Repurchases of Common Stock		(3,480)	(7,221)
Cash paid for equity issuance costs			(7,500)
Borrowings under factoring arrangement and Securitization Facilities	297,673	68,283
Principal repayment on borrowings under factoring arrangement and Securitization Facilities	(203,841)	(64,976)
Cash paid for withholding taxes on vested RSUs	(7)	(223)
Lease terminations	(337)	(318)	(592)
Cash paid for debt issuance costs	(16,205)	(7)	(130)
Principal payments on finance lease obligations	(12,758)	(20,465)	(16,068)
Borrowings from senior secured revolving facility	29,750	206,500	30,000
Repayments on senior secured revolving facility	(14,200)	(141,500)	(30,000)
Proceeds from senior secured term loans		29,850	30,000
Borrowings from other loans	29,260	39,153	11,557
Principal repayments on senior secured term loans and other loans	(45,973)	(53,678)	(12,651)
Net cash provided by (used in) financing activities	63,362	59,139	(2,605)
Effect of exchange rates on cash	1,191	139	122
Net decrease in cash and cash equivalents	56,210	(29,755)	(37,635)
Cash, restricted cash, and cash equivalents
Beginning of period	14,099	43,854	81,489
End of period	70,309	14,099	43,854
Supplemental cash flow data:
Income tax payments, net of refunds received	2,695	7,882	7,827
Interest paid	152,678	144,456	146,076
Noncash investing and financing activities:
Assets acquired through right-of-use arrangements	4,372	10,732	14,920
Leasehold improvements funded by lessor			1,565
Settlement gain on related party payable to Ex-Sigma 2	1,287
Accrued capital expenditures	$ 2,124	$ 1,402	$ 2,820

Description of the Business

12 Months Ended

Dec. 31, 2020

Description of the Business

Description of the Business

1. Description of the Business

Organization

Exela Technologies, Inc. (the “Company” or “Exela”) is a global provider of transaction processing solutions, enterprise information management, document management and digital business process services. The Company provides mission-critical information and transaction processing solutions services to clients across three major industry verticals: (1) Information & Transaction Processing, (2) Healthcare Solutions, and (3) Legal and Loss Prevention Services. The Company manages information and document driven business processes and offers solutions and services to fulfill specialized knowledge-based processing and consulting requirements, enabling clients to concentrate on their core competencies. Through its outsourcing solutions, the Company enables businesses to streamline their internal and external communications and workflows.

The Company was originally incorporated in Delaware on July 15, 2014 as a special purpose acquisition company under the name Quinpario Acquisition Corp 2 (“Quinpario”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving Quinpario and one or more businesses or entities. On July 12, 2017 (the “Closing”), the Company consummated its business combination with SourceHOV Holdings, Inc. (“SourceHOV”) and Novitex Holdings, Inc. (“Novitex”) pursuant to the Business Combination Agreement, dated February 21, 2017, among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., SourceHOV, Novitex, HOVS LLC, HandsOn Fund 4 I, LLC and Novitex Parent, L.P., as amended (the “Novitex Business Combination”). In connection with the Closing, the Company changed its name from Quinpario Acquisition Corp 2 to Exela Technologies, Inc. Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Novitex Business Combination, “Quinpario” refers to the Company prior to the closing of the Novitex Business Combination, “SourceHOV” refers to SourceHOV prior to the Novitex Business Combination or SourceHOV on a standalone basis and “Novitex” refers to Novitex prior to the Novitex Business Combination.

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

2. Basis of Presentation and Summary of Significant Accounting Policies

The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements.

Basis of Presentation

The accompanying consolidated financial statements and related notes to the consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

Principles of Consolidation

The accompanying consolidated financial statements and related notes to the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Company’s variable interest in Ex-Sigma: The HGM Group and other former SourceHOV equity holders formed Ex-Sigma LLC (the “Ex-Sigma”) and its wholly-owned subsidiary, Ex-Sigma 2 LLC (the “Ex-Sigma 2”), to

hold the Exela shares to be issued to SourceHOV as merger consideration upon the closing of the Novitex Business Combination and to invest in Exela immediately prior to the closing. Ex-Sigma 2 secured additional PIPE financing in the form of a $55.8 million loan (the “Margin Loan”) that was used to purchase additional common and preferred shares from the Company to help meet the minimum cash requirements needed to close the Novitex Business Combination. As a result of these transactions, the Company issued 28,304,167 shares of Common Stock to Ex-Sigma 2 at the closing, which represented approximately 54.9% ownership in the Company at that time and were pledged as collateral for the Margin Loan.

The Company determined that Ex-Sigma was a variable interest entity and that the Company had a variable interest in Ex-Sigma through an expense reimbursement arrangement related to the Margin Loan and contained in the Consent, Waiver and Amendment dated June 15, 2017 by and among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., Novitex, Novitex Parent, L.P., Ex-Sigma, HOVS LLC and HandsOnFund 4 I, LLC, amending the Novitex Business Combination Agreement (the “Consent, Waiver and Amendment”). The Consent, Waiver and Amendment provided among other things for the Company to reimburse Ex-Sigma for costs and fees related to the maintenance of the Margin Loan, other than payments of principal, interest and original issue discount.

The Company was not the primary beneficiary because the Company did not have the power to direct the activities that most significantly impacted the economic performance of Ex-Sigma. Accordingly, the Company did not consolidate the financial statements of Ex-Sigma and did not have any assets or liabilities related to Ex-Sigma and the Company did not have an investment in Ex-Sigma. The Company reaffirmed its assessment as of December 31, 2020.

Ex-Sigma 2 paid off the balance of the Margin Loan as of December 31, 2019, and as such the maximum exposure to loss as a result of the Company’s involvement with Ex-Sigma is $0. Ex-Sigma 2 distributed the shares held by it during the first quarter of 2020 and is no longer a shareholder of Exela. Ex-Sigma and Ex-Sigma 2 ceased to be variable interest entities upon the distribution that occurred on February 21, 2020.

Use of Estimates in Preparation of the Financial Statements

Estimates and judgments relied upon in preparing these consolidated financial statements include revenue recognition for multiple element arrangements, allowance for doubtful accounts, income taxes, depreciation, amortization, employee benefits, equity-based compensation, contingencies, goodwill, intangible assets, right of use assets and obligation, pension obligations, pension assets, fair value of assets and liabilities acquired in acquisitions, and asset and liability valuations. The Company regularly assesses these estimates and records changes in estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Reverse Stock Split

On January 25, 2021, we effected a one-for-three reverse split (the “Reverse Stock Split”) of our issued and outstanding shares of common stock, par value $0.0001 per share (“Common Stock”). As a result of the Reverse Split every three (3) shares of Common Stock issued and outstanding were automatically combined into one (1) share of issued and outstanding Common Stock, without any change in the par value per share. All information related to Common Stock, stock options, restricted stock units, warrants and earnings per share have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented.

Giving effect to the Reverse Split the Company’s issued and outstanding stock decreased from 147,511,430 to 49,242,225 and 150,851,689 to 50,283,896 at December 31, 2020 and 2019, respectively.

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 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:

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history of net losses of $178.5 million and $509.1 million for the years ended December 31, 2020 and 2019, respectively. This is after considering a gain of $35.5 million on the sale of SourceHOV Tax, LLC and a gain of $8.7 million on the sale of our physical record storage and logistics business each recognized during the year ended December 31, 2020, and including goodwill and other intangible asset impairment of $349.6 million, for the year ended December 31, 2019;

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net operating cash outflow of $29.8 million and $63.9 million in 2020 and 2019, respectively;

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working capital deficits of $131.4 million as of December 31, 2020 and $147.1 million as of December 31, 2019;

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significant cash payments for interest on our long-term debt of $152.7 million in 2020 and a similar amount expected in 2021;

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a liability incurred of $60.7 million for the Appraisal Action (as described further in Note 14);

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a requirement that the Company maintain a minimum of $35.0 million in liquidity, at all times, to not be in default 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 “Prior Credit Agreement” and as further amended and restated as of May 18, 2020, the “Credit Agreement”); and

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an adverse impact on the results of operations, financial condition and liquidity related to effect of COVID-19 pandemic.

Furthermore, under the terms of each of the Prior Credit Agreement, and the Indenture and First Supplemental Indenture (collectively, the “Indenture”), dated July 12, 2017, the Company was required to deliver to its lenders and bondholders 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 Prior 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.

During the second quarter of 2020, both the Prior Credit Agreement and the A/R Facility were amended, as discussed further below in Consideration of Management’s Plans.

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 raised about our ability to continue as a going concern.

As of March 18, 2021, the Company had $54.1 million of liquidity, comprised of available cash of $34.4 million and availability under borrowing facilities of $19.7 million. This excludes an add back for certain fees, costs and expenses incurred by the Company relating to the Credit Agreement and the receivables financings of approximately $20.1 million which is otherwise permitted under the definition of minimum liquidity in the Credit Agreement.

The Company has undertaken the following plans and actions, since substantial doubt about our ability to continue as a going concern was initially raised in the December 31, 2019 financial statements, 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:

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On January 10, 2020, certain subsidiaries of the Company entered into a $160.0 million accounts receivables financing facility with a five-year term (as amended, the “A/R Facility”). 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. No amounts are outstanding under this facility.

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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 for $40.0 million, which was adjusted downwards by $2.0 million in accordance with the purchase agreement, which can be used to acquire, maintain, develop, construct, improve, upgrade or repair assets useful in our business or to make certain investments and acquisitions as permitted by the Credit Agreement.

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On March 23, 2020, in response to the potential impact of the COVID-19 pandemic, the Company implemented a 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.

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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 the Company’s liquidity by $27.9 million. The Company is required to remit previously deferred employer side social security payments in two equal installments, due December 31, 2021 and December 31, 2022, respectively.

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On May 18, 2020, the Company amended the Prior Credit Agreement, which requires the Company to maintain a minimum liquidity of $35.0 million. However, the definition of minimum liquidity in the Credit Agreement allows the Company to add back certain fees, costs and expenses incurred by the Company relating to the Credit Agreement and the receivables financings of approximately $19.2 million.

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On July 22, 2020 the Company completed the sale of its physical records storage and logistics business for a purchase price of $12.3 million, which can be used to acquire, maintain, develop, construct, improve, upgrade or repair assets useful in our business or to make certain investments and acquisitions as permitted by the Credit Agreement.

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On December 17, 2020, certain subsidiaries of the Company closed on a $145.0 million securitization facility (the “Securitization Facility”) with a five year term. Borrowings under the Securitization Facility are subject to an improved borrowing base definition that consists of receivables and, subject to contribution, further supported by inventory and intellectual property, in each case, subject to certain eligibility criteria, concentration limits and reserves. On December 17, 2020 the Company made the initial borrowing of

approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to repay the A/R Facility, which terminated on such date.

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In December 2020, the Company decided to close one of its production facilities. It also limited discretionary bonus payments to certain corporate and production personnel. In January 2021, the Company completed a furlough program mostly impacting corporate positions. These initiatives are expected to result in costs saving of $32.5 million through March 31, 2022.

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On March 15, 2021, the Company completed a private placement of common stock and warrants. The net proceeds to the Company were $25.2 million.

Substantial Doubt Alleviated

The Company has had a history of negative trends in its financial condition and operating results as well as recent noncompliance with covenants with certain of its lenders. However, despite these conditions, the Company believes management’s plans and actions to date, 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 Securitization 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 Other Considerations

The Securitization Facility provides for an initial funding of approximately $92.0 million supported by the receivables portion of the borrowing base and, subject to contribution, a further funding of approximately $53.0 million supported by inventory and intellectual property.

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.

Additionally, as discussed in Note 14, the petitioners in the Appraisal Action have filed additional actions to recognize the judgment against SourceHOV, which is a subsidiary without assets to satisfy the judgement. The Company does not expect these actions to be resolved and a settlement of liability recorded for the Appraisal Action to be made within twelve months from the date the financial statements were issued.

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

Impact of COVID-19

Our global operations continue to expose us to risks associated with the coronavirus pandemic (“COVID-19”), which continues to result in challenging operating environments and has affected almost all of the countries and territories in which we operate. Authorities across the world have implemented measures like travel bans, quarantines, curfews, restrictions on public gatherings, shelter in place orders, business shutdowns and closures to control the spread of COVID-19. These measures, alongside the virus itself, have impacted, and we expect will continue to impact, us, our customers, suppliers and other third parties with whom we do business, as well as the global economy, demand for our

services and spending across many sectors, as a whole. While some jurisdictions have now started to implement plans for reopening, there are others which had to return to restrictions due to increased spread of COVID-19.

The Company is dependent on its workforce to deliver its solutions and services. While we have developed and implemented health and safety protocols, business continuity plans and crisis management protocols in an effort to try to mitigate the negative impact of COVID-19, restrictions such as shutdowns, social distancing and stay-at-home orders in various jurisdictions have impacted and will continue to impact the Company’s ability to deploy its workforce effectively. A part of our workforce has now started to operate from offices and delivery centers, but many are still operating in a remote work environment.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report and the extent to which COVID-19 will ultimately impact the Company’s business depends upon various dynamic factors which are difficult to be predicted reliably. Management continues to actively monitor the global situation and its impact on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce. Given the continuous evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to fully estimate adverse effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity.

Segment Reporting

The Company consists of the following three segments:

1. Information & Transaction Processing Solutions (“ITPS”). ITPS provides industry-specific solutions for banking and financial services, including lending solutions for mortgages and auto loans, and banking solutions for clearing, anti-money laundering, sanctions, and interbank cross-border settlement; property and casualty insurance solutions for origination, enrollments, claims processing, and benefits administration communications; public sector solutions for income tax processing, benefits administration, and record management; multi-industry solutions for payment processing and reconciliation, integrated receivables and payables management, document logistics and location services, records management and electronic storage of data, documents; and software, hardware, professional services and maintenance related to information and transaction processing automation, among others.

2. Healthcare Solutions (“HS”). HS offerings include revenue cycle solutions, integrated accounts payable and accounts receivable, and information management for both the healthcare payer and provider markets. Payer service offerings include claims processing, claims adjudication and auditing services, enrollment processing and policy management, and scheduling and prescription management. Provider service offerings include medical coding and insurance claim generation, underpayment audit and recovery, and medical records management.

3. Legal and Loss Prevention Services (“LLPS”). LLPS solutions include processing of legal claims for class action and mass action settlement administrations, involving project management support, notification and outreach to claimants, collection, analysis and distribution of settlement funds. Additionally, LLPS provides data and analytical services in the context of litigation consulting, economic and statistical analysis, expert witness services, and revenue recovery services for delinquent accounts receivable.

Cash and Cash Equivalents

Cash and cash equivalents include cash deposited with financial institutions and liquid investments with original maturity dates equal to or less than three months. All bank deposits and money market accounts are considered cash and cash equivalents. The Company holds cash and cash equivalents at major financial institutions, which often exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to bank depository concentration.

Certificates of deposit and fixed deposits whose original maturity is greater than three months and one year or less are classified as short-term investments, and certificates of deposit and fixed deposits whose maturity is greater than one year at the balance sheet date are classified as non-current assets in the consolidated balance sheets. The purchase of

any certificates of deposit or fixed deposits that are classified as short-term investments or non-current assets appear in the investing section of the consolidated statements of cash flows.

Obligation for Claim Payment

As part of the Company's legal claims processing service, the Company holds cash for various settlement funds once the fund is in the wind down stage and claims have been paid. The cash is used to pay tax obligations and other liabilities of the settlement funds. The Company has recorded a liability for the settlement funds received, which is included in Obligation for claim payment in the consolidated balance sheets, of $29.3 million and $39.1 million at December 31, 2020 and 2019, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at the original invoice amount less an estimate made for doubtful accounts. Revenue that has been earned but remains unbilled at the end of the period is recorded as a component of accounts receivable, net. The Company specifically analyzes accounts receivable and historical bad debts, customer credit-worthiness, current economic trends, and changes in customer payment terms and collection trends when evaluating the adequacy of its allowance for doubtful accounts. The Company writes off accounts receivable balances against the allowance for doubtful accounts, net of any amounts recorded in deferred revenue, when it becomes probable that the receivable will not be collected.

Inventories

Our inventories primarily include heavy-duty scanners and related parts, toner, paper stock, envelopes and postage supplies. Inventories are stated at the lower of cost or net realizable values and include the cost of raw materials, labor, and purchased subassemblies. Cost is determined using the weighted average method.

Property, Plant and Equipment

Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method (which approximates the use of the assets) over the estimated useful lives of the assets. When these assets are sold or otherwise disposed of, the asset and related depreciation is relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Leasehold improvements are amortized over the lease term or the useful life of the asset, whichever is shorter. Repair and maintenance costs are expensed as incurred.

Intangible Assets

Customer Relationships

Customer relationship intangible assets represent customer contracts and relationships obtained as part of acquired businesses. Customer relationship values are estimated by evaluating various factors including historical attrition rates, contractual provisions and customer growth rates, among others. The estimated average useful lives of customer relationships range from 4 to 16 years depending on facts and circumstances. These intangible assets are primarily amortized based on undiscounted cash flows. The Company evaluates the remaining useful life of intangible assets on an annual basis to determine whether events and circumstances warrant a revision to the remaining useful life.

Trade Names

The Company has determined that its trade name intangible assets are indefinite-lived assets and therefore are not subject to amortization. Trade names are tested for impairment as per the Company’s policy for impairment of indefinite-lived assets.

Trademarks

The Company has determined that its trademark intangible assets resulting from acquisitions are definite-lived assets and therefore are subject to amortization. The Company amortizes such trademarks on a straight-line basis over the estimated useful life, which is typically one year. As of December 31, 2020 these trademarks were fully amortized.

Developed Technology

The Company has acquired various developed technologies embedded in its technology platform. Developed technology is an integral asset to the Company in providing solutions to customers and is recorded as an intangible asset. The Company amortizes developed technology on a straight-line basis over the estimated useful life, which is typically 5 to 8.5 years.

Capitalized Software Costs

The Company capitalizes certain costs incurred to develop software products to be sold, leased or otherwise marketed after establishing technological feasibility in accordance with ASC section 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed, and the Company capitalizes costs to develop or purchase internal-use software in accordance with ASC section 350-40, Intangibles—Goodwill and Other— Internal-Use Software. Significant estimates and assumptions include determining the appropriate period over which to amortize the capitalized costs based on estimated useful lives and estimating the marketability of the commercial software products and related future revenues. The Company amortizes capitalized software costs on a straight-line basis over the estimated useful life, which is typically 3 to 5 years.

Outsourced Contract Costs

Costs of outsourcing contracts, including costs incurred for bid and proposal activities, are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract are deferred and expensed on a straight-line basis over the estimated contract term. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment activities and can be separated into two principal categories: contract commissions and set-up/fulfillment costs. Contract fulfillment costs are capitalized only if they are directly attributable to a specifically anticipated future contract; represent the enhancement of resources that will be used in satisfying a future performance obligation (the services under the anticipated contract); and are expected to be recovered.

Non-compete Agreements

The Company acquired certain non-compete agreements in connection with the Novitex Business Combination. These were related to four Novitex executives that were terminated following the acquisition. As of December 31, 2020 these agreements were fully amortized.

Assembled Workforce

The Company acquired an assembled workforce in an asset purchase transaction in the fourth quarter of 2018. The Company recognized an intangible asset for the acquired assembled workforce and amortizes the asset on a straight-line basis over the estimated useful life of four years.

Impairment of Indefinite-Lived Assets

The Company conducts its annual indefinite-lived assets impairment tests on October 1st of each year for its indefinite-lived assets, or more frequently if indicators of impairment exist. When performing the impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. A quantitative assessment requires comparison of fair value of the asset to its carrying value. If carrying value of the indefinite-lived assets exceeds fair value, the Company recognizes an impairment loss by an amount which is

equal to the excess of carrying value over fair value. The Company utilizes the Income Approach, specifically the Relief-from-Royalty method, which has the basic tenet that a user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. Refer to Note 9- Intangible Assets and Goodwill for additional discussion of impairment of trade names.

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets, including finite-lived trade names, trademarks, customer relationships, developed technology, capitalized software costs, outsourced contract costs, acquired software, workforce, and property, plant and equipment, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows based in part on the financial results and the expectation of future performance.

The Company did not record any material impairment related to its property, plant, and equipment, customer relationships, trademarks, developed technology, capitalized software cost, assembled workforce or outsourced contract costs for the years ended December 31, 2020, 2019, and 2018.

Goodwill

Goodwill represents the excess purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations. Goodwill is generally allocated to reporting units based upon relative fair value (taking into consideration other factors such as synergies) when an acquired business is integrated into multiple reporting units. The Company's reporting units are at the operating segment level, which discrete financial information is prepared and regularly reviewed by management. When a business within a reporting unit is disposed of, goodwill is allocated to the disposed business using the relative fair value method.

The Company conducts its annual goodwill impairment tests on October 1st of each year, or more frequently if indicators of impairment exist. When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would be required to perform a quantitative impairment analysis for goodwill. The quantitative analysis requires a comparison of fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company uses a combination of the Guideline Public Company Method of the Market Approach and the Discounted Cash Flow Method of the Income Approach to determine the reporting unit fair value. Refer to Note 9- Intangible Assets and Goodwill for additional discussion of impairment of goodwill.

Derivative Instruments and Hedging Activities

As required by ASC 815—Derivatives and Hedging, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company's objective in using interest rate derivatives is to manage its exposure to variable interest rates related to its term loan under the Credit Agreement. In order to accomplish this objective, in November 2017, the

Company entered into a three year, one-month LIBOR interest rate contract with a notional amount of $347.8 million. The contract will mitigate the variable interest rate risk related to the LIBOR with a fixed interest rate paid semi-annually starting January 12, 2018.

The following table summarizes the Company’s interest rate swap positions as of December 31, 2020:


		December 31, 2020
Effective	Maturity	(In Millions)		Weighted Average
date	date	Notional Amount		Interest Rate
1/12/2018	1/12/2021	$	328.1	1.9275	%

The interest rate swap, which is used to manage the Company's exposure to interest rate movements and other identified risks, was not designated as a hedge. As such, the change in the fair value of the derivative is recorded directly in other income (expense), net. Other income (expense), net includes a gain of $0.4 million and a loss of $4.3 million related to the change in fair value of the interest rate swap for the years ended December 31, 2020 and 2019, respectively. Fair value of interest rate swap is recorded in the accrued liabilities on the consolidated balance sheet.

Benefit Plan Accruals

The Company has defined benefit plans in the U.K and Germany, under which participants earn a retirement benefit based upon a formula set forth in the respective plans. The Company records annual amounts relating to its pension plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, and compensation increases. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so.

Leases

The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company's consolidated balance sheet. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and finance lease liabilities, net of current portion in the Company's consolidated balance sheet.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date, and exclude lease incentives. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are not recorded on the balance sheet.

Finance lease ROU assets are amortized over the lease term or the useful life of the asset, whichever is shorter. The amortization of finance lease ROU assets is recorded in depreciation expense in the consolidated statements of operations. For operating leases, we recognize expense for lease payments on a straight-line basis over the lease term.

Stock-Based Compensation

The Company accounts for all equity-classified awards under stock-based compensation plans at their “fair value.” This fair value is measured at the fair value of the awards at the grant date and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the awards on the grant date is determined using the stock price on the respective grand date in the case of restricted stock units and using an option pricing model

in the case of stock options. The expense resulting from share-based payments is recorded in Selling, general and administrative expense in the accompanying consolidated statements of operations.

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 years ended December 31, 2020, 2019, and 2018:


	Years Ended December 31,
	2020								2019								2018
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	769,487	$	219,047	$	68,472	$	1,057,006	$	958,625	$	256,721	$	71,332	$	1,286,678	$	1,034,941	$	228,015	$	84,560	$	1,347,516
EMEA		213,418		—		—		213,418		248,466		—		—		248,466		211,314		—		—		211,314
Other		22,138		—		—		22,138		27,193		—		—		27,193		27,392		—		—		27,392
Total	$	1,005,043	$	219,047	$	68,472	$	1,292,562	$	1,234,284	$	256,721	$	71,332	$	1,562,337	$	1,273,647	$	228,015	$	84,560	$	1,586,222

Contract Balances

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


	December 31, 2020		December 31, 2019
Accounts receivable, net	$	206,868	$	261,400
Deferred revenues		16,919		16,621
Customer deposits		21,277		27,765
Costs to obtain and fulfill a contract		3,295		4,977

Accounts receivable, net includes $23.2 million and $34.1 million as of December 31, 2020 and 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 $14.4 million during the year ended December 31, 2020 that had been deferred as of December 31, 2019.

Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. We recognized $2.4 million and $2.9 million of amortization for these costs in 2020 and 2019, respectively, 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. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed.

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 December 31, 2020 in each of the future periods below:


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

2021	$	54,229
2022		35,692
2023		29,022
2024		26,849
2025		27,144
2026 and thereafter		—
Total	$	172,936

Research and Development

Research and development costs are expensed as incurred. Research and development costs expensed for the years ended December 31, 2020, 2019, and 2018 were $1.1 million, $1.7 million, and $2.0 million, respectively.

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2020, 2019, and 2018, were $0.7 million, $1.1 million, and $0.9 million, respectively.

Income Taxes

The Company accounts for income taxes by using the asset and liability method. The Company accounts for income taxes regarding uncertain tax positions and recognized interest and penalties related to uncertain tax positions in income tax benefit/(expense) in the consolidated statements of operations.

Deferred income taxes are recognized on the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as determined under tax laws and rates. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized. Due to numerous ownership changes, the Company is subject to limitations on existing net operating losses under Section 382 of the Internal Revenue Code (the “Code”). Accordingly, valuation allowances have been established against a portion of the net operating losses to reflect estimated Section 382 limitations. The Company also considered the realizability of net operating losses not limited by Section 382. The Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets are more likely than not to be realized. However, scheduling the reversal of existing deferred tax liabilities indicated that a portion of the deferred tax assets are likely to be realized. Therefore, partial valuation allowances were established against a portion of the Company’s deferred tax assets. In the event the Company determines that it would be able to realize deferred tax assets that have valuation allowances established, an adjustment to the net deferred tax assets would be recognized as a component of income tax expense through continuing operations.

The Company engages in transactions (i.e. acquisitions) in which the tax consequences may be subject to uncertainty and examination by the varying taxing authorities. Therefore, judgment is required by the Company in assessing and estimating the tax consequences of these transactions. While the Company’s tax returns are prepared and based on the Company’s interpretation of tax laws and regulations, in the normal course of business the tax returns are subject to examination by the various taxing authorities. Such examinations may result in future assessments of additional tax, interest and penalties. For purposes of the Company’s income tax provision, a tax benefit is not recognized if the tax position is not more likely than not to be sustained based solely on its technical merits. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. Refer to Note 12 - Income Taxes for further information.

Loss Contingencies

The Company reviews the status of each significant matter, if any, and assesses its potential financial exposure considering all available information including, but not limited to, the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events pertaining to a particular matter. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to loss contingencies, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to its pending claims and litigation, and may revise its estimates. These revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial position of the Company. The Company’s liabilities exclude any estimates for legal costs not yet incurred associated with handling these matters.

Operations

A portion of the Company’s labor and operations is situated outside of the United States in India and other locations. The carrying value of long-lived assets that are situated outside of the United States is approximately $31.2 million and $33.7 million as of December 31, 2020 and 2019, respectively.

Foreign Currency Translation

The functional currency for the Company’s production operations located in India, Philippines, China, and Mexico is the United States dollar. Included in other expense as Sundry expense (income), net in the consolidated statements of operations are net exchange gain of $0.4 million, $0.5 million and $1.2 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The Company has determined all other international subsidiaries’ functional currency is the local currency. These assets and liabilities are translated at exchange rates in effect at the balance sheet date while income and expense amounts are translated at average exchange rates during the period. The resulting foreign currency translation adjustments are disclosed as a separate component of other comprehensive loss.

Beneficial Conversion Feature

The Company's Series A Perpetual Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) contains a beneficial conversion feature, which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock at the commitment date. The Company recognized the beneficial conversion feature by allocating the intrinsic value of the conversion option, which is the number of shares of Common Stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of Common Stock per share on the commitment date, to additional paid-in capital, resulting in a discount on the Series A Preferred Stock. As a result of the occurrence of events meeting the definition of a “Fundamental Change” as defined in the Certificate of Designations, Preferences, Rights and Limitations of Series A Perpetual Convertible Preferred Stock of the Company during the period, the Company recognized the entire dividend equivalent of $16.4 million as of December 31, 2017. There was no dividend equivalent recognized in 2018, 2019 and 2020.

Net Loss per Share

Earnings per share (“EPS”) is computed by dividing net loss available to holders of the Company’s 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 and if-converted method in periods of earnings. The two class method is an earnings allocation method

that determines earnings per share (when there are earnings) for Common Stock and participating securities. The if-converted method assumes all convertible securities are converted into Common Stock. Diluted EPS excludes all dilutive potential 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 using the if-converted method. As of December 31, 2020, the outstanding shares of the Company’s Series A Preferred Stock, if converted would have resulted in an additional 1,404,621 shares of Common Stock outstanding, however, they 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 1,662,155, 1,749,002 and 1,487,866, respectively in the calculation of diluted loss per share for the years ended December 31, 2020, 2019 and 2018 as their effects were anti-dilutive (i.e. reduces the net loss per share).

The components of basic and diluted EPS are as follows. All shares and per share amounts have been adjusted for a one share-for-three shares reverse stock split which took effect on January 26, 2021:


	Year Ended December 31,
	2020		2019		2018
Net loss attributable to common stockholders (A)	$	(179,839)	$	(512,425)	$	(173,461)
Weighted average common shares outstanding - basic and diluted (B)		49,144,429		48,572,979		49,257,696
Loss Per Share:
Basic and diluted (A/B)	$	(3.66)	$	(10.55)	$	(3.52)

The weighted average common shares outstanding - basic and diluted, in the table above, exclude in each case the 1,523,578 shares returned to the Company in the first quarter of 2020 in connection with the Appraisal Action (as defined and described further in Note 14 below) which became treasury stock, but which were included in the number of shares of Common Stock outstanding as of December 31, 2019 and 2018.

Business Combinations

The Company includes the results of operations of the businesses acquired as of the respective dates of acquisition. The Company allocates the fair value of the purchase price of acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Fair Value Measurements

The Company records the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is

reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Refer to Note 15 — Fair Value Measurement for further discussion.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and trade receivables. The Company maintains its cash and cash equivalents and certain other financial instruments with highly rated financial institutions and limits the amount of credit exposure with any one financial institution. From time to time, the Company assesses the credit worthiness of its customers. Credit risk on trade receivables is minimized because of the large number of entities comprising the Company’s client base and their dispersion across many industries and geographic areas. The Company generally has not experienced any material losses related to receivables from any individual customer or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable, net. The Company does not have any significant customers that account for 10% or more of the total consolidated revenues.

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 December 31, 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. 2018-14, “Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans”. The standard revises the annual disclosure requirements by removing disclosures no longer considered cost beneficial, clarifying specific requirements of disclosures and adding certain disclosures identified as relevant. ASU 2018-14 is effective for fiscal years ending after December 15, 2020. The standard should be applied on a retrospective basis to all periods presented. The standard did not have an impact on the Company’s results of operations, financial condition and cash flows.

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, 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 consolidated balance sheets, but did not have a material impact on the Company's consolidated statements of operations and 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.

Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) no. 2014-09, Revenue from Contracts with Customers (ASC 606). Under ASU 2014-09, revenue is recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard using the modified retrospective approach applied to those contracts that were not completed as of January 1, 2018. The results for the reporting period beginning after January 1, 2018 are presented in accordance with the new standard, although historical information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. The adoption of ASC 606 had a material impact on the Company's financial position, results of operations and cash flows as of or for the period ended December 31, 2019, primarily due to the change in contract costs capitalization criteria. However, we expect the impact of the adoption of the new standard will be immaterial to our results of operations on an ongoing basis. The cumulative effect of accounting change recognized was $12.8 million recorded as an increase to beginning balance of accumulated deficit.

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.

In August 2020, the FASB issued ASU no. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU eliminates two models in ASC 470-20 for convertible instruments that require separate accounting for embedded conversion features namely cash conversion model and beneficial conversion feature model. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares. The ASU is effective for the Company for fiscal years beginning after December 15, 2021, 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.

Sale of Non-Core Assets

12 Months Ended

Dec. 31, 2020

Sale of Non-Core Assets

Sale of Non-Core Assets

3. Sale of Non-Core Assets

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 $35.5 million on the sale of SourceHOV Tax, LLC during the first quarter of 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 consolidated statements of operations for the year ended December 31, 2020.

On July 22, 2020, the Company completed the sale of its physical records storage and logistics business for a purchase price of $12.3 million. The Company recognized a gain of $8.7 million on the sale of physical records storage and logistics business during the third quarter of 2020. The gain on sale of physical records storage and logistics business is included in Other expense (income), net in the consolidated statements of operations for the year ended December 31, 2020.

Inventories

12 Months Ended

Dec. 31, 2020

Inventories

Inventories

4. Inventories

Inventories, net consist of the following:


	December 31,
	2020		2019
Work in process	$	961	$	1,903
Finished goods		12,312		14,914
Supplies and parts		5,473		6,491
Less: Allowance for obsolescence		(4,432)		(4,261)
		14,314		19,047

Accounts Receivable

12 Months Ended

Dec. 31, 2020

Accounts Receivable.

Accounts Receivable

5. Accounts Receivable

Accounts receivable, net consist of the following:


	December 31,
	2020		2019
Billed receivables	$	179,696	$	222,168
Unbilled receivables		23,210		34,135
Other		9,609		10,072
Less: Allowance for doubtful accounts		(5,647)		(4,975)
	$	206,868	$	261,400

Unbilled receivables represent balances recognized as revenue that have not been billed to the customer. The Company’s allowance for doubtful accounts is based on a policy developed by historical experience and management judgment. Adjustments to the allowance for doubtful accounts may occur based on market conditions or specific client circumstances.

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2020

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	December 31,
	2020		2019
Prepaids	$	30,459	$	23,243
Deposits		632		420
	$	31,091	$	23,663

Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

7. Leases

Company leases numerous facilities worldwide with larger concentrations of space in Texas, Michigan, Connecticut, California, India, Mexico, the Philippines, and China. Company’s facilities house general offices, sales offices, service locations, and production facilities. Substantially all of Company’s operations facilities are leased under long-term leases with varying expiration dates, except for the few owned locations. The Company regular obtains various machinery, equipment, vehicles and furniture on leases. The machinery and equipment leases mainly include leasing of computers, servers, other IT equipment, mailing system, production equipment, generators, office equipment, printers, copiers and miscellaneous warehouse equipment.

Company’s ROU assets and lease liabilities as of December 31, 2020 recorded on the consolidated balance sheet are as follows:


	December 31,		December 31,
	2020		2019
Balance sheet location:
Operating Lease
Operating lease right-of-use assets, net	$	68,861	$	93,627
Current portion of operating lease liabilities		18,349		25,345
Operating lease liabilities, net of current portion		56,814		73,282
Finance Lease
Finance lease right-of-use assets, net (included in property, plant and equipment, net)		17,164		30,835
Current portion of finance lease liabilities		12,231		13,788
Finance lease liabilities, net of current portion		13,287		20,272

Supplemental balance sheet information related to leases is as follows:


	December 31,		December 31,
	2020		2019
Weighted-average remaining lease term
Operating leases		4.8 Years		4.8 Years
Finance leases		3.7 Years		3.2 Years

Weighted-average discount rate
Operating leases		11.9%		10.5%
Finance leases		10.7%		9.1%

The interest on financing lease liabilities was $2.6 million and $3.3 million for the year ended December 31, 2020 and 2019, respectively. The amortization expense on finance lease right-of-use assets was $12.8 million and $15.1 million for the year ended December 31, 2020 and 2019, respectively.

Maturities of finance and operating lease liabilities based on lease term for the next five years are as follows:



	Finance		Operating
	Leases		Leases
2021	$	14,339	$	25,733
2022		6,569		21,800
2023		3,700		15,944
2024		3,276		12,412
2025		2,061		8,648
2026 and thereafter		—		15,297
Total lease payments		29,945		99,834
Less: Imputed interest		(4,427)		(24,671)
Present value of lease liabilities	$	25,518	$	75,163

Consolidated rental expense for all operating leases was $69.1 million, $77.3 million, and $83.8 million for the years ended December 31, 2020, 2019, and 2018, respectively.

The following table summarizes the cash paid and related right-of-use operating finance or operating lease recognized for the year ended December 31, 2020.

		Year Ended		Year Ended
		December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	34,193	$	50,398
Financing cash flows from finance leases		12,925		20,860
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases		23,644		19,127
Finance leases		4,372		10,731

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

8. Property, Plant and Equipment, Net

Property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation, and amortization, and consist of the following:



	Estimated Useful Lives	December 31,
	(in Years)	2020		2019
Land	N/A	$	6,903	$	6,884
Buildings and improvements	7 – 40		20,688		20,288
Leasehold improvements	Shorter of life of improvement or lease term		39,797		47,036
Vehicles	5 – 7		337		531
Machinery and equipment	5 – 15		22,991		28,489
Computer equipment and software	3 – 8		99,434		92,500
Furniture and fixtures	5 – 15		8,599		9,440
Finance lease right-of-use assets	Shorter of life of the asset or lease term		82,862		85,464
			281,611		290,632
Less: Accumulated depreciation and amortization			(193,760)		(176,995)
Property, plant and equipment, net		$	87,851	$	113,637

Depreciation expense related to property, plant and equipment was $39.2 million, $41.4 million, and $43.1 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Intangibles Assets and Goodwill

12 Months Ended

Dec. 31, 2020

Intangibles Assets and Goodwill

Intangibles Assets and Goodwill

9. Intangible Assets and Goodwill

Intangibles

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


	Weighted Average	December 31, 2020
	Remaining Useful Life	Gross Carrying		Accumulated		Intangible
	(in Years)	Amount (a)		Amortization		Asset, net
Customer relationships	10.2	$	508,485	$	(278,306)	$	230,179
Developed technology	3.4		88,553		(87,111)		1,442
Trade names (b)	Indefinite-lived		8,400		(3,100)		5,300
Outsource contract costs	3.3		16,331		(13,036)		3,295
Internally developed software	3.7		47,182		(20,152)		27,030
Assembled workforce	2		4,473		(2,237)		2,236
Purchased software	13		26,749		(3,567)		23,182
Intangibles, net		$	700,173	$	(407,509)	$	292,664


	Weighted Average	December 31, 2019
	Remaining Useful Life	Gross Carrying		Accumulated		Intangible
	(in Years)	Amount (a)		Amortization		Asset, net
Customer relationships	10.9	$	508,074	$	(237,313)	$	270,761
Developed technology	4.3		89,053		(87,109)		1,944
Trade names (b)	Indefinite-lived		8,400		(3,100)		5,300
Outsource contract costs	3.3		16,726		(11,749)		4,977
Internally developed software	4.2		43,261		(12,129)		31,132
Trademarks	1		23,378		(23,370)		8
Assembled workforce	3		4,473		(1,118)		3,355
Purchased software	14		26,749		(1,783)		24,966
Intangibles, net		$	720,114	$	(377,671)	$	342,443

(a)	Amounts include intangibles 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. Carrying amount of $5.3 million as at December 31, 2020 represents indefinite-lived intangible asset.

In connection with the completion of the annual impairment test as of October 1, 2020, the Company recorded no impairment charge to goodwill and trade names.

During the third quarter of 2019, the Company made an evaluation based on factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, and concluded that a triggering event for an interim impairment analysis had occurred. As part of the assessment, it was determined that the increase in the discount rate applied in the valuation was required to reflect current market dynamics and company-specific risk. This higher discount rate, in conjunction with revised long-term projections, resulted in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. As a result of the interim impairment assessment in the third quarter, the Company recorded an impairment charge to goodwill and trade names of $96.2 million and $1.0 million, respectively. The Company did not update its analysis for purposes of the annual impairment test as of October 1, 2019 as the measurement date of the impairment test performed during the quarter-ended September 30, 2019 was one day from the annual impairment test date.

Additionally, later during the fourth quarter of 2019, the Company conducted its annual budgeting process along with an update to its long-range plan. Following the completion of that process, the Company made an evaluation based on factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, concluding that a second triggering event for an impairment analysis had occurred. Revised long-term projections coupled with a decline in the market capitalization, resulted in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. Accordingly, we performed another quantitative impairment test as of December 31, 2019, resulting in an additional impairment charge of $252.4 million to goodwill. Therefore, as a result of these two interim impairment assessments in the third and fourth quarters of 2019, impairment charges totaling $348.6 million and $1.0 million were recorded to goodwill and trade names, respectively, for the year ended December 31, 2019. Accumulated impairment losses on goodwill were $560.9 million as at December 31, 2020 and 2019.

The impairment charges are included within Impairment of goodwill and other intangible assets in the consolidated statements of operations.

Aggregate amortization expense related to intangibles was $54.7 million, $59.3 million, and $94.9 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Estimated intangibles amortization expense for the next five years and thereafter consists of the following:


	Estimated
	Amortization
	Expense
2021	$	51,120
2022		46,627
2023		38,108
2024		30,528
2025		23,106
Thereafter		98,237
	$	287,726

Goodwill

Goodwill by reporting segment consists of the following:




	Balances as at January 1, 2019 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at December 31, 2019 (a)
ITPS	$	571,575	$	—	$	(317,525)	$	70	$	254,120
HS		86,786		—		—		—		86,786
LLPS		49,897		—		(31,032)		—		18,865
Total	$	708,258	$	—	$	(348,557)	$	70	$	359,771

	Balances as at January 1, 2020 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at December 31, 2020 (a)
ITPS		254,120		—		—		10		254,130
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Total	$	359,771	$	—	$	—	$	10	$	359,781

(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 relating to LLPS as at December 31, 2018 and $317.5 million and $243.4 relating to ITPS and LLPS, respectively, as at December 31, 2020. ITPS and HS reporting segments had negative equity and LLPS reporting segment had positive equity as at October 1, 2020, the date of the annual impairment test.

Accrued Liabilities and Other Long-Term Liabilities

12 Months Ended

Dec. 31, 2020

Accrued Liabilities and Other Long-Term Liabilities

Accrued Liabilities and Other Long-Term Liabilities

10. Accrued Liabilities and Other Long-Term Liabilities

Accrued liabilities consist of the following:


	December 31,
	2020		2019
Accrued taxes (exclusive of income taxes)	$	12,953	$	9,608
Accrued lease exit obligations		270		1,127
Accrued professional and legal fees		33,897		33,421
Accrued appraisal action liability		60,654		56,412
Accrued legal reserve for pending litigation		15,146		5,669
Accrued transaction costs		2,739		2,250
Other accruals		740		13,066
	$	126,399	$	121,553

Other Long-term liabilities consist of the following:


	December 31,
	2020		2019
Deferred revenue	$	542	$	339
Accrued rent		449		669
Accrued lease exit obligations		195		136
Accrued compensation expense		1,897		2,075
Cares Act payroll tax deferrals		7,183		—
Other		3,358		3,743
	$	13,624	$	6,962

Long-Term Debt and Credit Facilities

12 Months Ended

Dec. 31, 2020

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

11. 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. As of December 31, 2020, the Company was in compliance with all covenants required under the Notes.

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 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 December 31, 2020 and December 31, 2019, the Company had outstanding irrevocable letters of credit totaling approximately $19.5 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 year ended December 31, 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 during the year ended December 31, 2019.

Third Amendment

On May 18, 2020, the Company amended the Prior 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 satisfied during the month of June 2020), the Company became 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 Prior 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. In connection with this amendment, the Company paid a forbearance fee of $5 million to the consenting lenders. The Company concluded that the amendment represents modification of debt under ASC 470-50. Accordingly, the forbearance fee paid was added to unamortized debt issuance cost which shall be amortized using updated effective interest rate based on modified cash flows. As of December 31, 2020, the Company was in compliance with all covenants required under these senior credit facilities.

Securitization Facilities

On January 10, 2020, certain subsidiaries of the Company entered into the $160.0 million 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 “A/R 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 made loans (the “A/R Loan”) to the A/R Borrower used to purchase certain receivables and related assets from its sole member, Exela Receivables Holdco, LLC (the “A/R Parent SPE”), a wholly-owned indirect subsidiary of the Company, (ii) sixteen other indirect, wholly-owned U.S. subsidiaries of the Company (collectively, the “A/R Originators”) sold or contributed to the A/R Parent SPE certain receivables and related assets in consideration for a combination of cash, equity in the A/R Parent SPE and/or letters of credit issued by the A/R LC Bank to the A/R Originators; and (iii) the A/R Parent SPE sold or contributed 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 A/R Parent SPE.

The Company used the proceeds of the initial borrowings under the A/R Facility 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.

The A/R Borrower and A/R Parent SPE were formed in December 2019, and are identified as variable interest entities (“VIEs”) and consolidated into the Company’s financial statements following variable interest entities (“VIE”) consolidation model under ASC 810. The A/R Borrower and A/R 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 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. In connection with these amendments a forbearance fee of $4.8 million was due and added to the outstanding principal balance of the loans. The Company concluded that the amendment represented modification of debt under ASC 470-50. Accordingly, the forbearance fee paid was added to unamortized debt issuance cost and amortized ratably over the remaining term of the A/R facility.

Each loan under the A/R Facility originally bore 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 (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. In connection with the above described amendments to the A/R Facility, the applicable margin of the Base Rate Loans was increased to 5.75% and the LIBOR Rate Loans was increased to 6.75%.

On December 17, 2020, the Company repaid in full the loans outstanding under the A/R Facility. The aggregate outstanding principal amount of loans under the A/R Facility as of such date was approximately $83.0 million. The early termination of the A/R Facility triggered an early termination fee of $0.8 million and required repayment of approximately $0.5 million in respect of principal, accrued interest and fees. All obligations under the A/R Facility (other than contingent indemnification obligations that expressly survive termination) terminated upon repayment. The A/R Facility was replaced by the Securitization Facility as described below. Repayment of A/R Facility was treated as an extinguishment of debt under ASC 470-50. Accordingly, the Company wrote off the unamortized balance of $8.2 million of debt issuance costs related to A/R facility.

On December 17, 2020, certain subsidiaries of Company closed on the $145.0 million Securitization Facility with a five year term. Borrowings under the Securitization Facility are subject to an improved borrowing base definition over the A/R Facility that consists of receivables and, subject to contribution, further supported by inventory and intellectual property, in each case, subject to certain eligibility criteria, concentration limits and reserves.

The Securitization Facility provided for an initial funding of approximately $92.0 million supported by the receivables portion of the borrowing base and, subject to contribution, a further funding of approximately $53.0 million supported by inventory and intellectual property. On December 17, 2020 the Company made the initial borrowing of approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to repay the A/R Facility and used the remaining proceeds for general corporate purposes.

The initial documentation for the Securitization Facility includes (i) a Loan and Security Agreement (the “Securitization Loan Agreement”), dated as of December 10, 2020, by and among Exela Receivables 3, LLC (the “Securitization Borrower”), a wholly-owned indirect subsidiary of the Company, the lenders (each, a “Securitization Lender” and collectively the “Securitization Lenders”), Alter Domus (US), LLC, as administrative agent (the “Securitization Administrative Agent”) and the Company, as initial servicer, pursuant to which the Securitization Lenders will make loans to the Securitization Borrower to be used to purchase receivables and related assets from the Securitization Parent SPE (as defined below), (ii) a First Tier Receivables Purchase and Sale Agreement (the, dated as of December 17, 2020, by and among Exela Receivables 3 Holdco, LLC (the “Securitization Parent SPE”), a wholly-owned indirect subsidiary of the Company, and certain other indirect, wholly-owned subsidiaries of the Company listed therein (collectively, the “Securitization Originators”), and the Company, as initial servicer, pursuant to which each

Securitization Originator has sold or contributed and will sell or contribute to the Securitization Parent SPE certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Parent SPE, (iii) a Second Tier Receivables Purchase and Sale Agreement, dated as of December 17, 2020, by and among, the Securitization Borrower, the Securitization Parent SPE and the Company, as initial servicer, pursuant to which Securitization Parent SPE has sold or contributed and will sell or contribute to the Securitization Borrower certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Borrower, (iv) the Sub-Servicing Agreement, dated as of December 17, 2020, by and among the Company and each Securitization Originator, (v) the Pledge and Guaranty, dated as of the December 10, 2020, between the Securitization Parent SPE and the Administrative Agent, and (vi) the Performance Guaranty, dated as of December 17, 2020, between the Company, as performance guarantor, and the Securitization Administrative Agent (and together with all other certificates, instruments, UCC financing statements, reports, notices, agreements and documents executed or delivered in connection with the Securitization Loan Agreement, the “Securitization Agreements”).

The Securitization Borrower, the Company, the Securitization Parent SPE and the Securitization Originators provide customary representations and covenants under the Securitization Agreements. The Securitization Loan Agreement provides for certain events of default upon the occurrence of which the Securitization Administrative Agent may declare the facility’s termination date to have occurred and declare the outstanding Securitization Loan and all other obligations of the Securitization Borrower to be immediately due and payable, however the Securitization Facility does not include an ongoing liquidity covenant like the A/R Facility and aligns reporting obligations with the Company’s other material indebtedness agreements.

The Securitization Borrower and Securitization Parent SPE were formed in December 2020, and are identified as VIEs and consolidated into the Company’s financial statements following VIE consolidation model under ASC 810. The Securitization Borrower and Securitization Parent SPE are bankruptcy remote entities and as such their assets are not available to creditors of the Company or any of its subsidiaries. Each loan under the Securitization Facility bears interest on the unpaid principal amount as follows: (i) if a Base Rate Loan, at a rate per annum equal to (x) the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the Adjusted LIBOR Rate (as defined in the Securitization Loan Agreement) plus 1.00%, plus (y) 8.75%; or (ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus 9.75%. As of December 31, 2020, there were borrowings of $91.9 million outstanding under the Securitization Facility. As of December 31, 2020, the Company was in compliance with all covenants required under the Securitization Facility.

Long-Term Debt Outstanding

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


	December 31,
	2020		2019
Other (a)	$	37,653		30,232
First lien credit agreement (b)		343,597		360,583
Senior secured notes (c)		984,216		979,060
Secured borrowings under Securitization Facility		91,947		—
Revolver		80,543		65,000
Total debt		1,537,956		1,434,875
Less: Current portion of long-term debt		(39,952)		(36,490)
Long-term debt, net of current maturities	$	1,498,004	$	1,398,385

(a)	Other debt represents outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company.

(b)	Net of unamortized original issue discount and debt issuance costs of $4.8 million and $17.1 million as of December 31, 2020 and $6.5 million and $18.9 million as of December 31, 2019.

(c)	Net of unamortized original issue discount and debt issuance costs of $11.3 million and $4.5 million as of December 31, 2020 and $14.9 million and $6.0 million as of December 31, 2019.

As of December 31, 2020, maturities of long-term debt are as follows:


	Maturity
2021	$	39,952
2022		115,000
2023		1,325,741
2024		2,923
2025		91,947
Thereafter		—
Total long-term debt		1,575,563
Less: Unamortized discount and debt issuance costs		(37,607)
	$	1,537,956

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

12. Income Taxes

The Company provides for income taxes using an asset and liability approach, under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.

For financial reporting purposes, income/ (loss) before income taxes includes the following components:


	Year Ended December 31,
	2020		2019		2018
United States	$	(158,187)	$	(511,165)	$	(180,245)
Foreign		(6,760)		9,691		18,792
	$	(164,947)	$	(501,474)	$	(161,453)

The provision for federal, state, and foreign income taxes consists of the following:


	Year Ended December 31,
	2020		2019		2018
Federal
Current	$	—	$	(1,308)	$	1,308
Deferred		480		(3,879)		(2,006)
State
Current		1,325		2,255		390
Deferred		1,542		(807)		2,339
Foreign
Current		4,318		5,770		3,435
Deferred		5,919		5,611		2,887
Income Tax Expense	$	13,584	$	7,642	$	8,353

The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows:


	Year Ended December 31,
	2020		2019		2018
Tax at statutory rate	$	(34,639)	$	(105,310)	$	(33,905)
Add (deduct)
State income taxes		(5,234)		(7,666)		(6,557)
Foreign income taxes		(516)		4,390		1,228
Nondeductible goodwill impairment		—		61,699		9,002
Permanent differences		218		1,275		2,542
Litigation settlement		71		3,310		608
Changes in valuation allowance		53,115		30,064		19,433
Unremitted earnings		(275)		1,604		4,735
GILTI Inclusion		(4,996)		3,772		2,289
Expiration of tax attributes		4,944		10,807		8,353
Other		896		3,697		625
Income Tax Expense	$	13,584	$	7,642	$	8,353

The Tax Cuts and Jobs Act (“TCJA”) was signed by the President of the United States and enacted into law on December 22, 2017. This overhaul of the U.S. tax law made a number of substantial changes, including the reduction of the corporate tax rate from 35% to 21%, establishing a dividends received deduction for dividends paid by foreign subsidiaries to the U.S., elimination or limitation of certain deductions (interest, domestic production activities and executive compensation), imposing a mandatory tax on previously unrepatriated earnings accumulated offshore since 1986 and establishing global minimum income tax and base erosion tax provisions related to offshore activities and affiliated party payments.

The TCJA subjects a U.S. shareholder to tax on Global Intangible Low-taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected the accounting policy to recognize the tax expense related to GILTI in the year the tax is incurred as a period expense. At December 31, 2020, the Company has no GILTI inclusion related to current-year operations.

On July 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations which will allow an annual election to exclude from the U.S. tax return certain GILTI amounts when the taxes paid by a foreign affiliate exceed 18.9% (90% of U.S. statutory rate of 21%) of the GILTI amount for that foreign affiliate (the “high-tax exception”). These regulations are effective for the 2021 taxable year with an election to apply to any taxable year beginning after 2017. In many of the countries in which the Company operates there are differences between local tax rules used to determine the tax base and the U.S. tax principles used to determine GILTI. Therefore, while many of the countries have a statutory tax rate above the 18.9% threshold, separate affiliates may not meet the 18.9% threshold each year and, as such, may not qualify for this exclusion. The Company plans to make the high-tax exception election for the 2020 tax year and recorded no GILTI cost in the total income tax expense for 2020. Additionally, the Company made an election for 2019 on its 2019 tax return and plans to make an election for 2018 by filing an amended tax return and recorded an estimated tax benefit of $5.0 million in the total income tax expense for 2020.

Beginning in 2018, the TCJA also subjects a U.S. shareholder of a controlled foreign corporation to current tax on certain payments from corporations subject to U.S. tax to related foreign persons, also referred to as base erosion and anti-abuse tax ("BEAT"). The BEAT provisions in the Tax Reform Act eliminate the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. The Company has recorded zero tax expense related to BEAT for the year ended December 31, 2020 and 2019.

On March 27, 2020, Congress enacted the Coronavirus Aid Relief and Economic Security Act ("CARES Act"), in response to the COVID-19 pandemic. The CARES Act contain numerous income tax provisions, including refundable payroll tax credit, 100% utilization on net operating loss (NOL) for taxable income in 2018, 2019 and 2020, 5 years NOL carryback from 2018, 2019 or 2020, interest limitation increase to 50% adjusted taxable income from 30% for tax years beginning January 1, 2019 and 2020, and immediate deduction on qualified improvement costs instead of depreciating them over 39 years. The Company has benefited from the increase of 50% adjusted taxable income limitation on net interest expense deduction, as well as the refundable payroll tax credit.

The components of deferred income tax liabilities and assets are as follows:


	Year Ended December 31,
	2020		2019
Deferred income tax liabilities:
Book over tax basis of intangible assets and fixed assets	$	(65,724)	$	(77,088)
Unremitted foreign earnings		(6,063)		(6,339)
Operating lease and finance lease right-of-use assets		(11,597)		(16,981)
Other, net	$	(2,604)	$	(2,571)
Total deferred income tax liabilities		(85,988)		(102,979)

Deferred income tax assets:
Allowance for doubtful accounts and receivable adjustments	$	1,704	$	1,498
Inventory		1,677		903
Accrued liabilities		15,345		11,608
Net operating loss and tax credit carryforwards		171,148		158,265
Tax deductible goodwill		6,171		8,066
Disallowed interest deduction		74,672		56,873
Operating lease and finance lease liabilities		13,004		18,127
Other, net		19,334		15,480
Total deferred income tax assets	$	303,055	$	270,820

Valuation allowance		(220,030)		(163,805)
Total net deferred income tax assets (liabilities)	$	(2,963)	$	4,036

Gross deferred tax assets are reduced by valuation allowances to the extent the Company determines it is not more-likely-than-not that the deferred tax assets are expected to be realized. At December 31, 2020, the Company recognized $220.0 million of valuation allowances against gross deferred tax assets primarily related to net operating loss and tax credit carryforwards. Of this amount, approximately $60.5 million and $4.5 million of the total valuation allowance relates to U.S. federal and state limitations, respectively, on the utilization of net operating loss carryforwards due to numerous changes in ownership. Approximately $64.7 million and $9.1 million of the total valuation allowance relates to U.S. federal disallowed interest deductions and state disallowed interest deductions, respectively, pursuant to the TCJA. The remaining $81.3 million of the valuation allowance relates to non-limited U.S. and non-U.S. net operating losses, capital losses, and tax credits that are not expected to be realizable.

The net change during the year in the total valuation allowance was an increase of $56.2 million primarily related to the increase of net regular deferred tax assets and the increase of deferred tax assets related to disallowed interest deduction.

Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), limits the amount of U.S. tax attributes (net operating losses and tax credit carryforwards) following a change in ownership. The Company has determined that for the purpose of these provisions an ownership change occurred under Section 382 on April 3, 2014 and October 31, 2014 for BancTec, Inc. and its subsidiaries and RC4Capital, LLC and its subsidiaries (collectively, the “Pangea Group”) and on October 31, 2014 for the historic SourceHOV group (the "2014 Reorganization"). The Section 382 limitations significantly limit the pre-acquisition Pangea Group net operating losses. Accordingly, upon the October 31, 2014 change in control, most of the historic Pangea Group federal net operating losses were limited and a valuation

allowance has been established against the related deferred tax assets. Following the filing of the October 31, 2014, Pangea Group federal tax returns and further Section 382 analysis, management finalized the amount of the limitation and as a result, approximately $3.5 million of the valuation allowance was released. Management has concluded that the U.S. tax attributes after Section 382 limitations were applied are more likely than not to be realized. With regard to Pangea Group's foreign subsidiaries, it was determined that most deferred tax assets are not likely to be realized and valuation allowances have been established. The Section 382 limit that applied to the historic SourceHOV group is greater than the net operating losses and tax credits generated in the predecessor periods. Therefore, no additional valuation allowances were established relating to Section 382 limitations other than the pre-2011 Section 382 limitations that applied.

Included in deferred tax assets are federal, foreign and state net operating loss carryforwards, federal capital loss carryforwards, federal general business credit carryforwards and state tax credit carryforwards due to expire beginning in 2021 through 2040. As of December 31, 2020, the Company has federal and state income tax net operating loss (NOL) carryforwards of $601.0 million and $413.1 million, which will expire at various dates from 2021 through 2040. Such NOL carryforwards expire as follows:


			State and Local
	Federal NOL		NOL
2021 – 2025	$	80,880	$	72,038
2026 – 2030		145,219		91,726
2031 – 2040		374,913		249,373
	$	601,012	$	413,137

As of December 31, 2020, the Company has foreign net operating loss carryforwards of $55.7 million, $1.2 million of which were generated by Exela Poland, $0.3 million were generated in Hungary and Serbia, $1.7 million is generated in Netherland, $0.9 million is generated in Finland, and will expire in 2024, 2026, 2027 and 2031 respectively. The rest of the foreign net operating losses will be carried forward indefinitely.

Since the 2014 Reorganization did not result in a new tax basis of assets and liabilities for the Company, some of the goodwill continues to be deductible over the remaining amortization period for tax purposes. At December 31, 2020, approximately $31.4 million of the Company goodwill is tax deductible, $19.2 million of which is carried over from the 2014 Reorganization. Additionally, the Company has tax deductible goodwill of $12.2 million in connection with the TransCentra acquisition. These amounts were related to the tax basis carried over from the seller in those acquisitions.

The Company adopted the provision of accounting for uncertainty in income taxes in ASC Topic 740. ASC 740 clarifies the accounting for uncertain tax positions in the Company's financial statements and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on tax returns. The total amount of unrecognized tax benefits, exclusive of interest and penalties, is $1.8 million, $4.3 million and $1.5 million at December 31, 2020, 2019 and 2018, respectively. Included in the balance of unrecognized tax benefits as of December 31, 2020, 2019 and 2018 is $0.7 million each, of tax benefits that, if recognized would benefit the effective tax rate. Total accrued interest and penalties recorded on the Consolidated Balance Sheet were $2.1 million, $2.1 million and $2.3 million at December 31, 2020, 2019 and 2018, respectively. The total amount of interest and penalties recognized in the Consolidated Statement of Operations at December 31, 2020, 2019, 2018 was $(0.0) million, $(0.2) million and $(0.4) million, respectively. For the year ending December 31, 2020, the Company has released $2.6 million in uncertain tax positions associated with Sec. 163(j) limitation permitted tax depreciation, which is based on the final Sec. 163j regulation that now allows the capitalized inventory under Sec. 263A as part of tax depreciation.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:


	Year Ended December 31,
	2020		2019		2018
Unrecognized tax benefits—January 1	$	4,314	$	1,476	$	1,047
Gross decreases—tax positions in prior period		(21)		1,378		301
Gross decreases—tax positions in prior period		(2,608)		(10)		—
Gross increases—tax positions in current period		151		1,470		128
Unrecognized tax benefits—December 31	$	1,836	$	4,314	$	1,476

The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The statute of limitations for U.S. purposes is open for tax years ending on or after December 31, 2016, However, NOLs generated in years prior to 2016 and utilized in future periods may be subject to examination by U.S. tax authorities. State jurisdictions that remain subject to examination are not considered significant. The Company has significant foreign operations in India and EMEA. The Company may be subject to examination by the India tax authorities for tax periods ending on or after March 31, 2014.

At December 31, 2020, the Company has not changed its prior indefinite reinvestment assertion on undistributed earnings related to certain foreign subsidiaries. Accordingly, no deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of approximately $106.3 million of undistributed foreign earnings from these foreign subsidiaries as those earnings continue to be permanently reinvested. However, the Company does not indefinitely reinvest earnings in Canada, China, India, Mexico and Philippines. The Company recorded $6.0 million and $6.3 million of foreign withholding taxes on the undistributed earnings of these jurisdictions at December 31, 2020 and 2019, respectively. The Company recorded $0.3 million deferred benefit, $1.6 million deferred expense, and $4.7 million deferred expense in the Consolidated Statement of Operations at December 31, 2020, 2019 and 2018, respectively. The foreign withholding taxes deferred benefit recorded in the current year is primarily attributable to the remeasurement of the cumulative withholding taxes on certain India undistributed earnings as a result of the change in the withholding rate on distributions, offset by a deferred expense due to the current year undistributed earnings.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

Employee Benefit Plans

13. 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.

The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (15 to 20 years) encompassing many business and economic cycles. The Company assumed a weighted average expected long-term rate on plan assets of 3.47%.

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 later of two dates, the participants leaving the Company or April 30, 2018.

Asterion Pension Plan

The Company acquired in 2018 through the Asterion Business Combination the obligation to provide pension benefits to eligible retirees and eligible dependents. 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.

With respect to all of the plans as discussed, no new employees are registered under these plans and the employees who are already eligible to receive benefits under these plans are no longer employed by the Company.

Funded Status

The change in benefit obligations, the change in the fair value of the plan assets and the funded status of the Company’s pension plans (except for the German pension plan which is unfunded) and the amounts recognized in the Company’s consolidated financial statements are as follows:


	Year ended December,
	2020		2019
Change in Benefit Obligation:
Benefit obligation at beginning of period	$	100,961	$	90,051
Service cost		69		80
Interest cost		1,984		2,448
Actuarial loss (gain)		18,861		9,168
Plan amendments		(10)		(835)
Benefits paid		(4,745)		(3,082)
Foreign-exchange rate changes		4,891		3,131
Benefit obligation at end of year	$	122,011	$	100,961

Change in Plan Assets:
Fair value of plan assets at beginning of period	$	75,875	$	62,952
Actual return on plan assets		10,755		10,906
Employer contributions		2,052		2,557
Benefits paid		(4,651)		(2,995)
Foreign-exchange rate changes		3,184		2,455
Fair value of plan assets at end of year		87,215		75,875
Funded status at end of year	$	(34,796)	$	(25,086)

Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net (a)	$	(35,515)	$	(25,681)
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial loss		(17,064)		(8,059)
Net amount recognized in accumulated other comprehensive loss, net of tax	$	(17,064)	$	(8,059)

Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	$	122,010	$	100,961
Aggregate accumulated benefit obligation	$	122,010	$	100,961
Aggregate fair value of plan assets	$	87,215	$	75,875

(a)

Consolidated balance of $35.5 million as of December 31, 2020 includes pension liabilities of $29.7 million, $2.7 million, $2.4 million and less than $0.1 million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.6 million. Consolidated balance of $25.7 million as of December 31, 2019 includes pension liabilities of $20.6 million, $2.4 million, $2.1 million and less than $0.1 million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.5 million.

Tax Effect on Accumulated Other Comprehensive Loss

As of December 31, 2020 and 2019, the Company recorded actuarial losses of $17.1 million and $8.1 million, respectively, which is net of a deferred tax benefit of $2.0 million for each period.

Pension and Postretirement Expense

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


	Year ended December 31,
	2020		2019		2018
Service cost	$	74	$	80	$	82
Interest cost		1,984		2,448		2,350
Expected return on plan assets		(2,530)		(2,460)		(2,841)
Amortization:
Amortization of prior service cost		150		(169)		9
Amortization of net loss		1,739		1,768		1,755
Settlement loss		552		—		—
Net periodic benefit cost	$	1,969	$	1,667	$	1,355

Valuation

The Company uses the corridor approach and projected unit credit method in the valuation of its defined benefit plans for the UK, Germany, and Norway respectively. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. For defined benefit pension plans, these unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over 15 years. Similarly, the Company used the Projected Unit Credit Method for the German Plan, and evaluated the assumptions used to derive the related benefit obligations consisting primarily of financial and demographic assumptions including commencement of employment, biometric decrement tables, retirement age, staff turnover. The projected unit credit method determines the present value of the Company’s defined benefit obligations and related service costs by taking into account each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately in building up the final obligation. Benefit is attributed to periods of service using the plan's benefit formula, unless an employee's service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight-line basis is used.

The following tables set forth the principal actuarial assumptions used to determine benefit obligation and net periodic benefit costs:


	December 31,
	2020		2019		2020		2019		2020		2019		2020		2019

	UK				Germany				Norway				Asterion
Weighted-average assumptions used to determine benefit obligations:
Discount rate	1.40	%	2.10	%	0.75	%	1.00	%	1.70	%	2.30	%	0.79	%	1.10
Rate of compensation increase	N/A		N/A		N/A		N/A		2.25	%	2.25	%	N/A	%	2.50
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	2.10	%	2.80	%	0.75	%	1.00	%	1.70	%	2.30	%	0.79	%	1.10
Expected asset return	3.47	%	3.87	%	N/A	%	N/A	%	2.70	%	3.80	%	0.79	%	1.10
Rate of compensation increase	N/A		N/A		N/A		N/A		2.25	%	2.25	%	N/A	%	2.50

The Germany plan is an unfunded plan and therefore has no plan assets. The expected rate of return assumptions for plan assets are based mainly on historical performance achieved over a long period of time (10 to 20 years) encompassing many business and economic cycles. Adjustments, upward and downward, may be made to those historical returns to reflect future capital market expectations; these expectations are typically derived from expert advice from the investment community and surveys of peer company assumptions.

The Company assumed a weighted average expected long-term rate of return on plan assets for the overall scheme of 3.45%. The Company’s long-term expected rate of return on cash is determined by reference to UK government 10 year bond yields at the balance sheet dates. The long-term expected return on bonds is determined by reference to corporate bond yields at the balance sheet date. The long-term expected rate of return on equities and diversified growth funds is based on the rate of return on UK long dated government bonds with an allowance for out-performance. The long-term expected rate of return on the liability driven investments holdings is determined by reference to UK government 20 year bond yields at the balance sheet date.

The discount rate assumption was developed considering the current yield on an investment grade non-gilt index with an adjustment to the yield to match the average duration of the index with the average duration of the plan’s liabilities. The index utilized reflected the market’s yield requirements for these types of investments.

The inflation rate assumption was developed considering the difference in yields between a long-term government stocks index and a long-term index-linked stocks index. This difference was modified to consider the depression of the yield on index-linked stocks due to the shortage of supply and high demand, the premium for inflation above the expectation built into the yield on fixed-interest stocks and the government’s target rate for inflation (CPI) at 2.0%. The assumptions used are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered, may not necessarily be borne out in practice.

Plan Assets

The investment objective for the plan is to earn, over moving fifteen to twenty year periods, the long-term expected rate of return, net of investment fees and transaction costs, to satisfy the benefit obligations of the plan, while at the same time maintaining sufficient liquidity to pay benefit obligations and proper expenses, and meet any other cash needs, in the short-to medium-term.

The Company’s investment policy related to the defined benefit plan is to continue to maintain investments in government gilts and highly rated bonds as a means to reduce the overall risk of assets held in the fund. No specific targeted allocation percentages have been set by category, but are set at the direction and discretion of the plan trustees. The weighted average allocation of plan assets by asset category is as follows:


	December 31,
	2020		2019		2018
U.K. and other international equities	31.4	%	29.9	%	27.1	%
U.K. government and corporate bonds	2.7		12.5		12.7
Diversified growth fund	21.0		41.3		38.9
Liability driven investments	40.6		16.3		21.3
Multi-asset credit fund	4.3		—		—
Total	100.0	%	100.0	%	100.0	%

The following tables set forth, by category and within the fair value hierarchy, the fair value of the Company’s pension assets at December 31, 2020 and 2019:


	December 31, 2020
	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	430	$	430	$	—	$	—
Equity funds:
U.K.		16,201		—		16,201		—
Other international		10,802		—		10,802		—
Fixed income securities:
Corporate bonds / U.K. Gilts		2,353		—		2,353		—
Other investments:
Diversified growth fund		18,313		—		18,313		—
Liability driven investments		35,403		—		35,403		—
Multi-asset credit fund		3,713		—		3,713		—
Total fair value	$	87,215	$	430	$	86,785	$	—


	December 31, 2019
	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	837	$	837	$	—	$	—
Equity funds:
U.K.		13,121		—		13,121		—
Other international		8,747		—		8,747		—
Fixed income securities:
Corporate bonds / U.K. Gilts		9,446		—		9,446		—
Other investments:
Diversified growth fund		31,345		—		31,345		—
Liability driven investments		12,379				12,379
Total fair value	$	75,875	$	837	$	75,038	$	—

The plan assets are categorized as follows, as applicable:

Level 1: Any asset for which a unit price is available and used without adjustment, cash balances, etc.

Level 2: Any asset for which the amount disclosed is based on market data, for example a fair value measurement based on a present value technique (where all calculation inputs are based on data).

Level 3: Other assets. For example, any asset value with a fair value adjustment made not based on available indices or data.

Employer Contributions

The Company’s funding is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $2.1 million and $2.6 million to its pension plans during the years ended December 31, 2020 and 2019, respectively. The Company has fully funded the pension plans for 2020 based on current plan provisions. The Company expects to contribute $3.1 million to the pension plans during 2021, based on current plan provisions.

Estimated Future Benefit Payments

The estimated future pension benefit payments expected to be paid to plan participants are as follows:


	Estimated
	Benefit
	Payments
Year ended December 31,
2021	$	1,817
2022		2,161
2023		2,078
2024		2,966
2025		2,995
2026 - 2030		17,878
Total	$	29,895

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

14. Commitments and Contingencies

Litigation

The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe these actions will have a material, adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.

Appraisal Demand

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 (the “Court”), 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 a preliminary transaction in connection with 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 awarding the petitioners $57,698,426 inclusive of costs and interest. 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.

SourceHOV appealed the judgment in the Appraisal Action on June 30, 2020. On January 22, 2021, the Delaware Supreme Court affirmed the judgment of the Delaware Court of Chancery in favor of the petitioners. To date, SourceHOV has not paid the judgment in the Appraisal Action, and the petitioners have not been successful in their attempts to collect on the judgment against SourceHOV.

The appraisal petitioners have filed additional actions to recognize the judgment against SourceHOV, an action alleging unjust enrichment and seeking restitution and to pierce the corporate veil and seek alter ego liability against Exela Technologies, Inc. and over 50 alleged subsidiaries and/or affiliates in an attempt to collect the award in the Appraisal Action from entities other than SourceHOV, and an action against SourceHOV and certain of its directors and officers alleging creditor derivative claims relating to the Company’s securitization facilities. In early February 2021,

petitioners also filed a motion for a preliminary injunction in the derivative action in which they seek a court order freezing certain property and prohibiting certain transfers and payments by Exela subsidiaries other that SourceHOV, including preventing them from paying their creditors unless the payments are made equally among Exela’s other creditors and toward the Appraisal Action liability. Although the Company believes that it has valid defenses to these ancillary proceedings and has moved to dismiss them, there can be no assurance that the Company will be successful.

As a result of the Appraisal Action and following repayment of the Margin Loan by Ex-Sigma 2, 1,523,578 shares of our Common Stock issued to Ex-Sigma 2, our largest shareholder following the Novitex Business Combination, were returned to the Company during the first quarter of 2020.

As of December 31, 2020, the Company has an accrued liability of $60.7 million for the Appraisal Action based on the judgment received on January 30, 2020 plus accrued interest, which is management’s best estimate of the total payment.

Adverse Arbitration Order

In April 2020, one of the Company's Nordic subsidiaries commenced an arbitration in Finland against a customer alleging breach of contract and other damages in connection with an outsourcing services agreement and transition services agreement executed in 2017. In September 2020, the customer submitted counterclaims against the Company in an aggregate amount over EUR 10.0 million. Following an expedited arbitration, in late November 2020, the arbitrator awarded the customer approximately $13.0 million in the aggregate for the counterclaimed damages and costs. The Company filed an application to annul the award in late January 2021 with the relevant court asserting, among other bases, that the arbitrator violated due process and procedural rules by disallowing the Company’s witness and expert testimony and maintaining the expedited format following the assertion of significant counterclaims which would ordinarily have required the application of normal rather than expedited rules. In mid-February 2021, the court ordered an interim stay and prohibition of enforcement of the arbitration award. At this time, it is not practicable to render an opinion about whether an unfavorable outcome is probable or remote with respect to the appeal; however, the Company believes it has meritorious claims and defenses and is vigorously asserting them. However, at the same time principals from the Company and the customer’s owner groups are engaged in substantive settlement discussions seeking a commercial solution, which are in an advanced stage, but have not yet come to a resolution. The Company recorded an accrual in the amount of $9.6 million as of December 31, 2020 for this matter.

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.

Fair Value Measurement

12 Months Ended

Dec. 31, 2020

Fair Value Measurement

Fair Value Measurement

15. Fair Value Measurement

Assets and Liabilities Measured at Fair Value

The carrying amount of assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable approximated their fair value as of December 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 34.8% and 30.8% respectively, of the respective principal balance outstanding as of December 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 3 measurement as it is based on the settlement amount based on the settlement agreement terms less amount already paid.

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. (Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policies).

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


	Carrying		Fair		Fair Value Measurements
As of December 31, 2020	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,498,004	$	604,775	$	—	$	604,775	$	—
Interest rate swap liability		125		125		—		125		—
Acquisition contingent liability		300		300		—		—		300
Nonrecurring assets and liabilities:
Goodwill		359,781		359,781		—		—		359,781


	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 asset		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:


	December 31,		December 31,
	2020		2019
Balance as of January 1,	$	721	$	721
Earn-out Adjustment		279		—
Payments/Reductions		(700)		—
Balance as of December 31,	$	300	$	721

During 2019, goodwill impairment charge totaling $348.6 million was recognized. See Note 9.

- 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

12 Months Ended

Dec. 31, 2020

Stock-Based Compensation

Stock-Based Compensation

16. Stock-Based Compensation

At Closing, SourceHOV had 24,535 restricted stock units (“RSUs”) outstanding under its 2013 Long Term Incentive Plan (“2013 Plan”). Simultaneous with the Closing, the 2013 Plan, as well as all vested and unvested RSUs under the 2013 Plan, were assumed by Ex-Sigma (the sole equityholder of Ex-Sigma 2), an entity formed by the former SourceHOV equity holders. In accordance with U.S. 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, because the recipients of the RSUs were employees of the Company. All unvested RSUs under the 2013 Plan were vested by April 2019. As of December 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 2,774,588 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 RSU activity under the 2018 Plan for the year 2020 is summarized in the following table:


				Average
		Weighted		Remaining
	Number	Average Grant		Contractual Life	Aggregate
	of Shares	Date Fair Value		(Years)	Intrinsic Value
Outstanding Balance as of December 31, 2019	103,102	$	5.97	1.19	$	616
Granted	—		—
Forfeited	—		—
Vested	(76,647)		7.55
Outstanding Balance as of December 31, 2020	26,455	$	3.78	0.91	$	50

Out of the RSUs that vested in 2020, 3,433 were net-share settled such that the Company withheld shares with value equivalent to the employee’s minimum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were 1,567 shares and were based on the value of the RSUs on their vesting date as determined by the Company’s closing stock price. Total payment for the employee’s tax obligations to taxing authorities was less than $0.1 million and is reflected as a financing activity within the Consolidated Statements of Cash flows.

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 for the year 2020 is summarized in the following table:


						Average
		Weighted		Weighted		Remaining
		Average Grant		Average		Vesting Period	Aggregate
	Outstanding	Date Fair Value		Exercise Price		(Years)	Intrinsic Value (2)
Outstanding Balance as of December 31, 2019	1,645,900	$	5.91	$	12.42	2.27	$	—
Granted	70,000		0.75
Exercised	—		—
Forfeited	(80,200)		6.19
Expired	—		—
Outstanding Balance as of December 31, 2020 (1)	1,635,700	$	5.67	$	11.89	1.42	$	—

(1) 379,480 of the outstanding options are exercisable as of December 31, 2020.

(2) Exercise prices of all of the outstanding options as of December 31, 2020 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value was zero.

As of December 31, 2020, there was approximately $2.8 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 $2.8 million, $7.8 million, and $7.6 million related to the 2013 Plan and 2018 Plan awards for the years ended December 31, 2020, 2019, and 2018.

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Stockholders' Equity

17. 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. During fiscal 2020, 1,004,183 shares of Series A Preferred Stock were converted into 409,238 shares of Common Stock. As of December 31, 2020 and December 31, 2019, there were 49,242,225 and 50,283,896 shares outstanding, respectively (the outstanding shares of Common Stock as of December 31, 2019 includes the 1,523,578 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 December 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 is convertible at the holder's option, at any time into the number of shares of Common Stock determined as of the date of conversion using a certain conversion formula that takes into account the amount of Liquidation Preference per share as adjusted for accrued but unpaid dividends, as described below. As of December 31, 2020, after taking into account the effect of the Reverse Stock Split, each outstanding shares of Series A Preferred Stock was

convertible into 0.4269 shares of Common Stock using this conversion formula. Accordingly, as of December 31, 2020, 1,404,621 shares of Common Stock were issuable upon conversion of the remaining 3,290,050 shares of Series A Preferred Stock.

Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate per annum of 10% of the dollar amount of per share liquidation preference (plus accumulated but unpaid dividends, the “Liquidation Preference") per share of Series A Preferred Stock, paid or accrued quarterly in arrears. From the issue date through December 31, 2020 the amount of all accrued but unpaid dividends on the Series A Preferred Stock have been added to the Liquidation Preference. The Company shall add the amount of all accrued but unpaid dividends on each quarterly dividend payment date to the Liquidation Preference, except to the extent the Company elects to make all or any portion of such payment in cash on or prior to the applicable dividend payment date, in which case, the amount of the accrued but unpaid dividends that is added to the Liquidation Preference shall be reduced on a dollar-for-dollar basis by the amount of any such cash payment. 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 of such shares. The dividend accumulation for the years ended December 31, 2020 and 2019 was $1.3 million and $3.3 million, respectively as reflected on the Consolidated Statement of Operations. As of December 31, 2020, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 was $10.8 million. The per share average of cumulative preferred dividends is $3.3.

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 1,666,667 shares of Common Stock. The Share Buyback Program has expired. As of December 31, 2020, 929,049 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, 1,523,578 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, 2020, there were a total of 34,986,302 warrants outstanding. As part of its IPO, Quinpario had issued 35,000,000 units comprising one share of Common Stock and one warrant of which 34,986,302 have been separated from the original unit and 13,698 warrants remain an unseparated part of the originally issued units (the Common Stock included in these originally issued units (adjusted to reflect the Reverse Split) have been accounted for in the number of shares of Common Stock outstanding referred to above). The warrants traded on the OTC Pink under the symbol “XELAW” as of December 31, 2020.

Each warrant entitles the holder to purchase one-sixth of one share of Common Stock at a price of $5.75 per one-sixth share ($34.50 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 $72.00 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

12 Months Ended

Dec. 31, 2020

Related-Party Transactions

Related-Party Transactions

18. 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 $0.1 million, $0.6 million and less than $0.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, and following a distribution of all the shares held by Ex-Sigma 2, HGM may be deemed to beneficially own approximately 50% of the Company’s Common Stock, including shares controlled, pursuant to voting agreements.

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 $1.9 million, $1.0 million, and $0.7 million for the years ended December 31, 2020, 2019 and 2018, 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 $0.2 million, $0.4 million, and $0.7 million for the years ended December 31, 2020, 2019, and 2018, respectively. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $1.4 million, $1.5 million, and $1.6 million for the years ended December 31, 2020, 2019, and 2018, respectively. These expenses are included in cost of revenue in the consolidated statements of operations.

Certain premium payments, secondary offering fees and legal expenses were reimbursed to Ex-Sigma 2 pursuant to 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”). These expenses are included in related party expense in the consolidated statements of operations. The Company recorded related party expenses of $1.7 million and $5.2 million during the years ended December 31, 2019 and 2018, respectively, related to the Company’s obligation to reimburse Ex-Sigma 2 for premium payments on the Margin Loan. The Company recorded related party expenses of $2.1 million and $2.4 million for the years ended December 31, 2019 and 2018, respectively, for reimbursable expenses related to secondary offerings of shares by Ex-Sigma 2, the proceeds of which were used to repay the Margin Loan. The reimbursement payments were made in the second half of 2019. The Company recorded related party expenses of $0.3 million, $0.6 million and $0.4 million for the years ended December 31, 2020, 2019 and 2018, respectively, for reimbursable legal expenses of Ex-Sigma 2.

The Company made payments totaling $5.6 million to Ex-Sigma 2 during the fourth quarter of 2019. Separately, the Company determined it was obligated to reimburse premium payments of $6.9 million made by Ex-Sigma 2 on the Margin Loan under the terms of the Consent, Waiver and Amendment. Pursuant to a written settlement agreement entered into in June 2020, Ex-Sigma, SourceHOV and the Company agreed that the $5.6 million of payments made during the fourth quarter of 2019 would be accepted to fully discharge the Company’s obligation to reimburse Ex-Sigma 2 for the $6.9 million of premium payments. The Company recorded the difference of $1.3 million between the obligation amount and the settlement amount as an increase to additional paid in capital in the consolidated statements of stockholders’ deficit for the year ended December 31, 2020.

In addition, in October 2019, the Company awarded $6.3 million in bonuses to certain employees who were also indirect equity holders of Ex-Sigma 2 through their holdings of Ex-Sigma that had been issued upon the vesting of RSUs granted under the 2013 Plan. Ex-Sigma 2 pledged all of its capital stock in the Company as collateral for the Margin Loan. The Company remitted the net amount of $4.6 million (after withholding payroll taxes of $1.7 million) toward the outstanding balance on the Margin Loan in order to benefit such employees. The bonus amount remitted by the Company was originally determined by Ex-Sigma management based on such employees’ over-all equity ownership of Ex-Sigma. Following payment in full of the Margin Loan, during the first quarter of 2020, Ex-Sigma 2 distributed the shares of the Company’s capital stock held by it to its sole equity holder, Ex-Sigma, who distributed the shares to its equity holders, including the bonus recipients. These bonus payments were not processed or approved according to the Company’s internal control policies. In May 2020, each employee that received the bonus countersigned an authorization letter confirming their authorization for the Company to remit the amount of their net bonus to pay a portion of the Margin Loan. The Company recorded the $6.3 million bonus payments as compensation expense in selling, general and administrative expenses in the accompanying statements of operations for the year ended December 31, 2019.

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 approximately $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Relationship with Apollo Global Management, LLC

The Company provides services to and receives services from certain Apollo Global Management, LLC (“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. The Company excluded disclosure of transactions related to Apollo after March 31, 2020 as the related party relationship with Apollo ceased during the first quarter of 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 $0.1 million, $0.6 million and $0.6 million under this agreement for the years ended December 31, 2020, 2019 and 2018, respectively, in our consolidated statements of operations.

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 the years ended December 31, 2020, 2019 and 2018 there were related party expenses of $0.2 million, $1.0 million and $0.7 million, respectively, for this service.

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, $4.4 million and $4.1 million for years ended December 31, 2020, 2019 and 2018.

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, $1.2 million and $0.6 million in our consolidated statements of operations from ADT LLC under this master services agreement for the years ended December 31, 2020, 2019 and 2018.

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, $5.4 million and $5.7 million for the year ended December 31, 2020, 2019 and 2018 and cost of revenue of less than $0.1 million for each of the years ended December 31, 2020, 2019 and 2018 from Diamond Resorts Centralized Services Company under this master services agreement.

Payable and Receivable/Prepayment Balances with Affiliates

Payable and receivable/prepayment balances with affiliates as of December 31, 2020 and December 31, 2019 are as follows:



	December 31, 2020				December 31, 2019
	Receivables and Prepaid Expenses		Payables		Receivables and Prepaid Expenses		Payables
HOV Services, Ltd	$	711	$	—	$	601	$	—
Rule 14		—		44		—		250
HGM		—		52		115		—
Apollo affiliated company		—		—		—		202
Oakana		—		1		—		1
Ex-Sigma 2		—		—		—		1,287
	$	711	$	97	$	716	$	1,740

Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2020

Segment and Geographic Area Information

Segment and Geographic Area Information

19. 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.


		Year ended December 31, 2020
	ITPS		HS		LLPS		Total
Revenue	$	1,005,043	$	219,047	$	68,472	$	1,292,562
Cost of revenue (exclusive of depreciation and amortization)		815,013		159,917		48,614		1,023,544
Segment profit		190,030		59,130		19,858		269,018
Selling, general and administrative expenses (exclusive of depreciation and amortization)								186,104
Depreciation and amortization								93,953
Impairment of goodwill and other intangible assets								—
Related party expense								5,381
Interest expense, net								173,878
Debt modification and extinguishment costs								9,589
Sundry income, net								(153)
Other income, net								(34,788)
Net loss before income taxes							$	(164,946)


		Year ended December 31, 2019
	ITPS		HS		LLPS		Total
Revenue	$	1,234,284	$	256,721	$	71,332	$	1,562,337
Cost of revenue (exclusive of depreciation and amortization)		1,001,655		180,045		43,035		1,224,735
Segment profit		232,629		76,676		28,297		337,602
Selling, general and administrative expenses (exclusive of depreciation and amortization)								198,864
Depreciation and amortization								100,903
Impairment of goodwill and other intangible assets								349,557
Related party expense								9,501
Interest expense, net								163,449
Debt modification and extinguishment costs								1,404
Sundry expense, net								969
Other expense, net								14,429
Net loss before income taxes							$	(501,474)


		Year ended December 31, 2018
	ITPS		HS		LLPS		Total
Revenue	$	1,273,647	$	228,015	$	84,560	$	1,586,222
Cost of revenue (exclusive of depreciation and amortization)		1,010,320		151,877		51,206		1,213,403
Segment profit		263,327		76,138		33,354		372,819
Selling, general and administrative expenses (exclusive of depreciation and amortization)								184,908
Depreciation and amortization								138,077
Impairment of goodwill and other intangible assets								48,127
Related party expense								12,403
Interest expense, net								155,991
Debt modification and extinguishment costs								1,067
Sundry income, net								(3,271)
Other income, net								(3,030)
Net loss before income taxes							$	(161,453)

The following table presents revenues by principal geographic area where the Company’s customers are located for the years ended December 31, 2020, 2019, and 2018.


	Years ended December 31,
	2020		2019		2018
United States	$	1,057,006	$	1,286,678	$	1,347,516
EMEA		213,418		248,466		211,314
Other		22,138		27,193		27,392
Total Consolidated Revenue	$	1,292,562	$	1,562,337	$	1,586,222

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Unaudited Quarterly Financial Data

12 Months Ended

Dec. 31, 2020

Selected Quarterly Financial Results (Unaudited)

Selected Quarterly Financial Results (Unaudited)

20. Selected Quarterly Financial Results (Unaudited)

The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2020 and 2019 (dollars in thousands, except per share data):


	Q1 2020		Q2 2020		Q3 2020		Q4 2020
Revenue:
ITPS	$	284,112	$	243,029	$	234,365	$	243,537
HS		64,049		49,166		54,209		51,623
LLPS		17,290		15,527		16,706		18,949
Total Revenue		365,451		307,722		305,280		314,109

Cost of revenue:
ITPS		235,120		195,835		183,671		200,387
HS		44,931		36,148		39,444		39,394
LLPS		12,488		9,805		11,107		15,214
Cost of revenue (exclusive of depreciation and amortization)		292,539		241,788		234,222		254,995

Selling, general and administrative expenses (exclusive of depreciation and amortization)		50,374		47,014		42,837		45,879
Depreciation and amortization		23,185		22,847		22,095		25,826
Impairment of goodwill and other intangible assets		—		—		—		—
Related party expense		1,551		1,146		1,360		1,324
Operating income (loss)		(2,198)		(5,073)		4,766		(13,915)

Other expense (income), net:
Interest expense, net		41,588		44,440		43,612		44,238
Debt modification and extinguishment costs		—		—		—		9,589
Sundry expense (income), net		1,082		(899)		(434)		98
Other expense (income), net		(34,657)		(584)		(10,414)		10,867
Net loss before income taxes		(10,211)		(48,030)		(27,998)		(78,707)
Income tax (expense) benefit		(2,459)		(661)		(320)		(10,144)
Net loss		(12,670)		(48,691)		(28,318)		(88,851)
Cumulative dividends for Series A Preferred Stock		1,440		(858)		(976)		(915)
Net loss attributable to common stockholders	$	(11,230)	$	(49,549)	$	(29,294)	$	(89,766)
Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2)		49,065,055		49,169,556		49,170,477		49,172,037
Earnings per share:
Basic and diluted	$	(0.23)	$	(1.01)	$	(0.60)	$	(1.82)


	Q1 2019		Q2 2019		Q3 2019		Q4 2019
Revenue:
ITPS	$	325,172	$	309,840	$	292,607	$	306,665
HS		61,343		63,440		62,132		69,806
LLPS		17,842		17,569		18,806		17,115
Total Revenue		404,357		390,849		373,545		393,586

Cost of revenue:
ITPS		259,272		249,589		241,867		250,927
HS		40,341		43,353		42,717		53,634
LLPS		10,988		10,889		10,861		10,297
Cost of revenue (exclusive of depreciation and amortization)		310,601		303,831		295,445		314,858

Selling, general and administrative expenses (exclusive of depreciation and amortization)		49,677		51,162		48,347		49,678
Depreciation and amortization		26,624		24,779		25,079		24,421
Impairment of goodwill and other intangible assets		—		—		97,158		252,399
Related party expense		998		5,331		1,430		1,742
Operating income (loss)		16,457		5,746		(93,914)		(249,512)

Other expense (income), net:
Interest expense, net		39,701		39,959		40,573		43,216
Debt modification and extinguishment costs		—		1,404		—		—
Sundry expense (income), net		2,715		(1,311)		165		(600)
Other expense, net		1,493		2,527		406		10,003
Net loss before income taxes		(27,452)		(36,833)		(135,058)		(302,131)
Income tax (expense) benefit		(4,720)		(4,738)		3,769		(1,953)
Net loss		(32,172)		(41,571)		(131,289)		(304,084)
Cumulative dividends for Series A Preferred Stock		(914)		(914)		(884)		(597)
Net loss attributable to common stockholders	$	(33,086)	$	(42,485)	$	(132,173)	$	(304,681)
Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2)		48,524,074		48,488,731		48,545,583		48,720,451
Earnings per share:						—
Basic and diluted	$	(0.68)	$	(0.88)	$	(2.72)	$	(6.27)

Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events

Subsequent Events

21. Subsequent Events

Reverse Stock Split

On January 25, 2021, the Company filed a Certificate of Amendment of the Company’s Second Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Amendment”), with the Secretary of State of Delaware, to effect a one share-for-three shares reverse stock split of the Company’s Common Stock. The reverse stock split, had no effect on the par value of the Common Stock and did not reduce the number of authorized shares. It also did not affect the number of Series A Preferred Stock outstanding; however, it did reduce the conversion factor of the Company’s Series A Convertible Preferred Stock. The reason for the reverse stock split was to maintain the Company’s listing on The Nasdaq Capital Market, which pursuant to Nasdaq Listing Rule 5550(a)(2)(the “Rule”) requires that if the closing bid price of the Common Stock is below $1.00 for 30 consecutive trading days, then the closing bid price must be $1.00 or more for 10 consecutive trading days during a grace period to regain compliance with the Rule.

Private Placement of Common Stock and Warrants

On March 15, 2021, the Company entered into a securities purchase agreement with institutional investors for the purchase and sale of 9,731,819 shares of Common Stock at a price of $2.75 per share and warrants to purchase 9,731,819 shares of Common Stock at an exercise price of $4.00 per share. The warrants will be exercisable beginning on the calendar date following the six month anniversary of the closing and will expire five years from the date when first exercisable. The gross proceeds to Exela from this offering were approximately $26.8 million before deducting placement agent fees and other estimated offering expenses. The offering closed on March 18, 2021.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Basis of Presentation

Principles of Consolidation

Use of Estimates in Preparation of the Financial Statements

Reverse Stock Split

Reverse Stock Split

Giving effect to the Reverse Split the Company’s issued and outstanding stock decreased from 147,511,430 to 49,242,225 and 150,851,689 to 50,283,896 at December 31, 2020 and 2019, respectively.

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:

●

net operating cash outflow of $29.8 million and $63.9 million in 2020 and 2019, respectively;

●

working capital deficits of $131.4 million as of December 31, 2020 and $147.1 million as of December 31, 2019;

●

significant cash payments for interest on our long-term debt of $152.7 million in 2020 and a similar amount expected in 2021;

●

a liability incurred of $60.7 million for the Appraisal Action (as described further in Note 14);

●

an adverse impact on the results of operations, financial condition and liquidity related to effect of COVID-19 pandemic.

During the second quarter of 2020, both the Prior Credit Agreement and the A/R Facility were amended, as discussed further below in Consideration of Management’s Plans.

Consideration of Management’s Plans

●

approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to repay the A/R Facility, which terminated on such date.

●

On March 15, 2021, the Company completed a private placement of common stock and warrants. The net proceeds to the Company were $25.2 million.

Substantial Doubt Alleviated

Future Plans and Other Considerations

Segment Reporting

The Company consists of the following three segments:

Cash and Cash Equivalents

any certificates of deposit or fixed deposits that are classified as short-term investments or non-current assets appear in the investing section of the consolidated statements of cash flows.

Obligation For Claim Payment

Obligation for Claim Payment

Accounts Receivable and Allowance for Doubtful Accounts

Inventories

Property, Plant and Equipment

Intangible Assets

Customer Relationships

Trade Names

Trademarks

Developed Technology

Capitalized Software Costs

Outsourced Contract Costs

Non-compete Agreements

Assembled Workforce

Impairment of Indefinite-Lived Assets

Impairment of Indefinite-Lived Assets

Impairment of Long-Lived Assets

Goodwill

Derivative Instruments and Hedging Activities

The following table summarizes the Company’s interest rate swap positions as of December 31, 2020:


		December 31, 2020
Effective	Maturity	(In Millions)		Weighted Average
date	date	Notional Amount		Interest Rate
1/12/2018	1/12/2021	$	328.1	1.9275	%

Benefit Plan Accruals

Leases

Stock-Based Compensation

in the case of stock options. The expense resulting from share-based payments is recorded in Selling, general and administrative expense in the accompanying consolidated statements of operations.

Revenue Recognition

Nature of Services

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the years ended December 31, 2020, 2019, and 2018:


	Years Ended December 31,
	2020								2019								2018
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	769,487	$	219,047	$	68,472	$	1,057,006	$	958,625	$	256,721	$	71,332	$	1,286,678	$	1,034,941	$	228,015	$	84,560	$	1,347,516
EMEA		213,418		—		—		213,418		248,466		—		—		248,466		211,314		—		—		211,314
Other		22,138		—		—		22,138		27,193		—		—		27,193		27,392		—		—		27,392
Total	$	1,005,043	$	219,047	$	68,472	$	1,292,562	$	1,234,284	$	256,721	$	71,332	$	1,562,337	$	1,273,647	$	228,015	$	84,560	$	1,586,222

Contract Balances

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


	December 31, 2020		December 31, 2019
Accounts receivable, net	$	206,868	$	261,400
Deferred revenues		16,919		16,621
Customer deposits		21,277		27,765
Costs to obtain and fulfill a contract		3,295		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

2021	$	54,229
2022		35,692
2023		29,022
2024		26,849
2025		27,144
2026 and thereafter		—
Total	$	172,936

Research and Development

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2020, 2019, and 2018, were $0.7 million, $1.1 million, and $0.9 million, respectively.

Income Taxes

Loss Contingencies

Operations

Foreign Currency Translation

Beneficial Conversion Feature

Net Loss per Share

The components of basic and diluted EPS are as follows. All shares and per share amounts have been adjusted for a one share-for-three shares reverse stock split which took effect on January 26, 2021:


	Year Ended December 31,
	2020		2019		2018
Net loss attributable to common stockholders (A)	$	(179,839)	$	(512,425)	$	(173,461)
Weighted average common shares outstanding - basic and diluted (B)		49,144,429		48,572,979		49,257,696
Loss Per Share:
Basic and diluted (A/B)	$	(3.66)	$	(10.55)	$	(3.52)

Business Combinations

Fair Value Measurements

reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Refer to Note 15 — Fair Value Measurement for further discussion.

Concentration of Credit Risk

Concentration of Credit Risk

Recently Adopted Accounting Pronouncements

●

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.

Recently Issued Accounting Pronouncements

COVID 19

Impact of COVID-19

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Basis of Presentation and Summary of Significant Accounting Policies

Schedule of interest rate swap positions


		December 31, 2020
Effective	Maturity	(In Millions)		Weighted Average
date	date	Notional Amount		Interest Rate
1/12/2018	1/12/2021	$	328.1	1.9275	%

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


	Years Ended December 31,
	2020								2019								2018
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	769,487	$	219,047	$	68,472	$	1,057,006	$	958,625	$	256,721	$	71,332	$	1,286,678	$	1,034,941	$	228,015	$	84,560	$	1,347,516
EMEA		213,418		—		—		213,418		248,466		—		—		248,466		211,314		—		—		211,314
Other		22,138		—		—		22,138		27,193		—		—		27,193		27,392		—		—		27,392
Total	$	1,005,043	$	219,047	$	68,472	$	1,292,562	$	1,234,284	$	256,721	$	71,332	$	1,562,337	$	1,273,647	$	228,015	$	84,560	$	1,586,222

Schedule of contract balances


	December 31, 2020		December 31, 2019
Accounts receivable, net	$	206,868	$	261,400
Deferred revenues		16,919		16,621
Customer deposits		21,277		27,765
Costs to obtain and fulfill a contract		3,295		4,977

Schedule of estimated remaining fixed consideration for unsatisfied performance obligations


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

2021	$	54,229
2022		35,692
2023		29,022
2024		26,849
2025		27,144
2026 and thereafter		—
Total	$	172,936

Schedule of components of basic and diluted EPS


	Year Ended December 31,
	2020		2019		2018
Net loss attributable to common stockholders (A)	$	(179,839)	$	(512,425)	$	(173,461)
Weighted average common shares outstanding - basic and diluted (B)		49,144,429		48,572,979		49,257,696
Loss Per Share:
Basic and diluted (A/B)	$	(3.66)	$	(10.55)	$	(3.52)

Inventories (Tables)

12 Months Ended

Dec. 31, 2020

Inventories

Schedule of inventories


	December 31,
	2020		2019
Work in process	$	961	$	1,903
Finished goods		12,312		14,914
Supplies and parts		5,473		6,491
Less: Allowance for obsolescence		(4,432)		(4,261)
		14,314		19,047

Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2020

Accounts Receivable.

Schedule of accounts receivable, net


	December 31,
	2020		2019
Billed receivables	$	179,696	$	222,168
Unbilled receivables		23,210		34,135
Other		9,609		10,072
Less: Allowance for doubtful accounts		(5,647)		(4,975)
	$	206,868	$	261,400

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2020

Prepaid Expenses and Other Current Assets

Schedule of prepaid expenses and other current assets


	December 31,
	2020		2019
Prepaids	$	30,459	$	23,243
Deposits		632		420
	$	31,091	$	23,663

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases

Schedule of balance sheet location

Company’s ROU assets and lease liabilities as of December 31, 2020 recorded on the consolidated balance sheet are as follows:


	December 31,		December 31,
	2020		2019
Balance sheet location:
Operating Lease
Operating lease right-of-use assets, net	$	68,861	$	93,627
Current portion of operating lease liabilities		18,349		25,345
Operating lease liabilities, net of current portion		56,814		73,282
Finance Lease
Finance lease right-of-use assets, net (included in property, plant and equipment, net)		17,164		30,835
Current portion of finance lease liabilities		12,231		13,788
Finance lease liabilities, net of current portion		13,287		20,272

Supplemental balance sheet information related to leases is as follows:


	December 31,		December 31,
	2020		2019
Weighted-average remaining lease term
Operating leases		4.8 Years		4.8 Years
Finance leases		3.7 Years		3.2 Years

Weighted-average discount rate
Operating leases		11.9%		10.5%
Finance leases		10.7%		9.1%

Schedule of maturities of operating lease liabilities



	Finance		Operating
	Leases		Leases
2021	$	14,339	$	25,733
2022		6,569		21,800
2023		3,700		15,944
2024		3,276		12,412
2025		2,061		8,648
2026 and thereafter		—		15,297
Total lease payments		29,945		99,834
Less: Imputed interest		(4,427)		(24,671)
Present value of lease liabilities	$	25,518	$	75,163

Schedule of maturities of finance lease liabilities



	Finance		Operating
	Leases		Leases
2021	$	14,339	$	25,733
2022		6,569		21,800
2023		3,700		15,944
2024		3,276		12,412
2025		2,061		8,648
2026 and thereafter		—		15,297
Total lease payments		29,945		99,834
Less: Imputed interest		(4,427)		(24,671)
Present value of lease liabilities	$	25,518	$	75,163

Schedule of cash paid and lease recognition

		Year Ended		Year Ended
		December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	34,193	$	50,398
Financing cash flows from finance leases		12,925		20,860
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases		23,644		19,127
Finance leases		4,372		10,731

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment, Net

Schedule of property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation and amortization



	Estimated Useful Lives	December 31,
	(in Years)	2020		2019
Land	N/A	$	6,903	$	6,884
Buildings and improvements	7 – 40		20,688		20,288
Leasehold improvements	Shorter of life of improvement or lease term		39,797		47,036
Vehicles	5 – 7		337		531
Machinery and equipment	5 – 15		22,991		28,489
Computer equipment and software	3 – 8		99,434		92,500
Furniture and fixtures	5 – 15		8,599		9,440
Finance lease right-of-use assets	Shorter of life of the asset or lease term		82,862		85,464
			281,611		290,632
Less: Accumulated depreciation and amortization			(193,760)		(176,995)
Property, plant and equipment, net		$	87,851	$	113,637

Intangibles Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2020

Intangibles Assets and Goodwill

Schedule of intangible assets


	Weighted Average	December 31, 2020
	Remaining Useful Life	Gross Carrying		Accumulated		Intangible
	(in Years)	Amount (a)		Amortization		Asset, net
Customer relationships	10.2	$	508,485	$	(278,306)	$	230,179
Developed technology	3.4		88,553		(87,111)		1,442
Trade names (b)	Indefinite-lived		8,400		(3,100)		5,300
Outsource contract costs	3.3		16,331		(13,036)		3,295
Internally developed software	3.7		47,182		(20,152)		27,030
Assembled workforce	2		4,473		(2,237)		2,236
Purchased software	13		26,749		(3,567)		23,182
Intangibles, net		$	700,173	$	(407,509)	$	292,664


	Weighted Average	December 31, 2019
	Remaining Useful Life	Gross Carrying		Accumulated		Intangible
	(in Years)	Amount (a)		Amortization		Asset, net
Customer relationships	10.9	$	508,074	$	(237,313)	$	270,761
Developed technology	4.3		89,053		(87,109)		1,944
Trade names (b)	Indefinite-lived		8,400		(3,100)		5,300
Outsource contract costs	3.3		16,726		(11,749)		4,977
Internally developed software	4.2		43,261		(12,129)		31,132
Trademarks	1		23,378		(23,370)		8
Assembled workforce	3		4,473		(1,118)		3,355
Purchased software	14		26,749		(1,783)		24,966
Intangibles, net		$	720,114	$	(377,671)	$	342,443

(a)	Amounts include intangibles 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. Carrying amount of $5.3 million as at December 31, 2020 represents indefinite-lived intangible asset.

Schedule of estimated intangibles amortization expense


	Estimated
	Amortization
	Expense
2021	$	51,120
2022		46,627
2023		38,108
2024		30,528
2025		23,106
Thereafter		98,237
	$	287,726

Schedule of goodwill by reporting segment




	Balances as at January 1, 2019 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at December 31, 2019 (a)
ITPS	$	571,575	$	—	$	(317,525)	$	70	$	254,120
HS		86,786		—		—		—		86,786
LLPS		49,897		—		(31,032)		—		18,865
Total	$	708,258	$	—	$	(348,557)	$	70	$	359,771

	Balances as at January 1, 2020 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at December 31, 2020 (a)
ITPS		254,120		—		—		10		254,130
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Total	$	359,771	$	—	$	—	$	10	$	359,781

(a)

Accrued Liabilities and Other Long-Term Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Accrued Liabilities and Other Long-Term Liabilities

Schedule of accrued liabilities


	December 31,
	2020		2019
Accrued taxes (exclusive of income taxes)	$	12,953	$	9,608
Accrued lease exit obligations		270		1,127
Accrued professional and legal fees		33,897		33,421
Accrued appraisal action liability		60,654		56,412
Accrued legal reserve for pending litigation		15,146		5,669
Accrued transaction costs		2,739		2,250
Other accruals		740		13,066
	$	126,399	$	121,553

Schedule of other Long-term liabilities


	December 31,
	2020		2019
Deferred revenue	$	542	$	339
Accrued rent		449		669
Accrued lease exit obligations		195		136
Accrued compensation expense		1,897		2,075
Cares Act payroll tax deferrals		7,183		—
Other		3,358		3,743
	$	13,624	$	6,962

Long-Term Debt and Credit Facilities (Tables)

12 Months Ended

Dec. 31, 2020

Long-Term Debt and Credit Facilities

Schedule of outstanding long-term debt instruments


	December 31,
	2020		2019
Other (a)	$	37,653		30,232
First lien credit agreement (b)		343,597		360,583
Senior secured notes (c)		984,216		979,060
Secured borrowings under Securitization Facility		91,947		—
Revolver		80,543		65,000
Total debt		1,537,956		1,434,875
Less: Current portion of long-term debt		(39,952)		(36,490)
Long-term debt, net of current maturities	$	1,498,004	$	1,398,385

(a)	Other debt represents outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company.

(b)	Net of unamortized original issue discount and debt issuance costs of $4.8 million and $17.1 million as of December 31, 2020 and $6.5 million and $18.9 million as of December 31, 2019.

(c)	Net of unamortized original issue discount and debt issuance costs of $11.3 million and $4.5 million as of December 31, 2020 and $14.9 million and $6.0 million as of December 31, 2019.

Schedule of maturities of long-term debt


	Maturity
2021	$	39,952
2022		115,000
2023		1,325,741
2024		2,923
2025		91,947
Thereafter		—
Total long-term debt		1,575,563
Less: Unamortized discount and debt issuance costs		(37,607)
	$	1,537,956

- 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
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of components of income/ (loss) before income taxes


	Year Ended December 31,
	2020		2019		2018
United States	$	(158,187)	$	(511,165)	$	(180,245)
Foreign		(6,760)		9,691		18,792
	$	(164,947)	$	(501,474)	$	(161,453)

Schedule of provision for federal, state, and foreign income taxes


	Year Ended December 31,
	2020		2019		2018
Federal
Current	$	—	$	(1,308)	$	1,308
Deferred		480		(3,879)		(2,006)
State
Current		1,325		2,255		390
Deferred		1,542		(807)		2,339
Foreign
Current		4,318		5,770		3,435
Deferred		5,919		5,611		2,887
Income Tax Expense	$	13,584	$	7,642	$	8,353

Schedule of income tax reconciliation


	Year Ended December 31,
	2020		2019		2018
Tax at statutory rate	$	(34,639)	$	(105,310)	$	(33,905)
Add (deduct)
State income taxes		(5,234)		(7,666)		(6,557)
Foreign income taxes		(516)		4,390		1,228
Nondeductible goodwill impairment		—		61,699		9,002
Permanent differences		218		1,275		2,542
Litigation settlement		71		3,310		608
Changes in valuation allowance		53,115		30,064		19,433
Unremitted earnings		(275)		1,604		4,735
GILTI Inclusion		(4,996)		3,772		2,289
Expiration of tax attributes		4,944		10,807		8,353
Other		896		3,697		625
Income Tax Expense	$	13,584	$	7,642	$	8,353

Schedule of components of deferred income tax liabilities and assets


	Year Ended December 31,
	2020		2019
Deferred income tax liabilities:
Book over tax basis of intangible assets and fixed assets	$	(65,724)	$	(77,088)
Unremitted foreign earnings		(6,063)		(6,339)
Operating lease and finance lease right-of-use assets		(11,597)		(16,981)
Other, net	$	(2,604)	$	(2,571)
Total deferred income tax liabilities		(85,988)		(102,979)

Deferred income tax assets:
Allowance for doubtful accounts and receivable adjustments	$	1,704	$	1,498
Inventory		1,677		903
Accrued liabilities		15,345		11,608
Net operating loss and tax credit carryforwards		171,148		158,265
Tax deductible goodwill		6,171		8,066
Disallowed interest deduction		74,672		56,873
Operating lease and finance lease liabilities		13,004		18,127
Other, net		19,334		15,480
Total deferred income tax assets	$	303,055	$	270,820

Valuation allowance		(220,030)		(163,805)
Total net deferred income tax assets (liabilities)	$	(2,963)	$	4,036

Schedule of NOL carryforwards expiry


			State and Local
	Federal NOL		NOL
2021 – 2025	$	80,880	$	72,038
2026 – 2030		145,219		91,726
2031 – 2040		374,913		249,373
	$	601,012	$	413,137

Schedule of reconciliation of the total amounts of unrecognized tax benefits


	Year Ended December 31,
	2020		2019		2018
Unrecognized tax benefits—January 1	$	4,314	$	1,476	$	1,047
Gross decreases—tax positions in prior period		(21)		1,378		301
Gross decreases—tax positions in prior period		(2,608)		(10)		—
Gross increases—tax positions in current period		151		1,470		128
Unrecognized tax benefits—December 31	$	1,836	$	4,314	$	1,476

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

Schedule of change in benefit obligations, fair value of the plan assets and funded status of Company's pension plans and the amounts recognized in the Company's consolidated financial statements


	Year ended December,
	2020		2019
Change in Benefit Obligation:
Benefit obligation at beginning of period	$	100,961	$	90,051
Service cost		69		80
Interest cost		1,984		2,448
Actuarial loss (gain)		18,861		9,168
Plan amendments		(10)		(835)
Benefits paid		(4,745)		(3,082)
Foreign-exchange rate changes		4,891		3,131
Benefit obligation at end of year	$	122,011	$	100,961

Change in Plan Assets:
Fair value of plan assets at beginning of period	$	75,875	$	62,952
Actual return on plan assets		10,755		10,906
Employer contributions		2,052		2,557
Benefits paid		(4,651)		(2,995)
Foreign-exchange rate changes		3,184		2,455
Fair value of plan assets at end of year		87,215		75,875
Funded status at end of year	$	(34,796)	$	(25,086)

Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net (a)	$	(35,515)	$	(25,681)
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial loss		(17,064)		(8,059)
Net amount recognized in accumulated other comprehensive loss, net of tax	$	(17,064)	$	(8,059)

Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	$	122,010	$	100,961
Aggregate accumulated benefit obligation	$	122,010	$	100,961
Aggregate fair value of plan assets	$	87,215	$	75,875

(a)

Schedule of components of the net periodic benefit cost


	Year ended December 31,
	2020		2019		2018
Service cost	$	74	$	80	$	82
Interest cost		1,984		2,448		2,350
Expected return on plan assets		(2,530)		(2,460)		(2,841)
Amortization:
Amortization of prior service cost		150		(169)		9
Amortization of net loss		1,739		1,768		1,755
Settlement loss		552		—		—
Net periodic benefit cost	$	1,969	$	1,667	$	1,355

Schedule of principal assumptions used to determine benefit obligation and net periodic benefit costs


	December 31,
	2020		2019		2020		2019		2020		2019		2020		2019

	UK				Germany				Norway				Asterion
Weighted-average assumptions used to determine benefit obligations:
Discount rate	1.40	%	2.10	%	0.75	%	1.00	%	1.70	%	2.30	%	0.79	%	1.10
Rate of compensation increase	N/A		N/A		N/A		N/A		2.25	%	2.25	%	N/A	%	2.50
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	2.10	%	2.80	%	0.75	%	1.00	%	1.70	%	2.30	%	0.79	%	1.10
Expected asset return	3.47	%	3.87	%	N/A	%	N/A	%	2.70	%	3.80	%	0.79	%	1.10
Rate of compensation increase	N/A		N/A		N/A		N/A		2.25	%	2.25	%	N/A	%	2.50

Schedule of weighted average allocation of plan assets by asset category


	December 31,
	2020		2019		2018
U.K. and other international equities	31.4	%	29.9	%	27.1	%
U.K. government and corporate bonds	2.7		12.5		12.7
Diversified growth fund	21.0		41.3		38.9
Liability driven investments	40.6		16.3		21.3
Multi-asset credit fund	4.3		—		—
Total	100.0	%	100.0	%	100.0	%

Schedule of fair value of pension assets


	December 31, 2020
	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	430	$	430	$	—	$	—
Equity funds:
U.K.		16,201		—		16,201		—
Other international		10,802		—		10,802		—
Fixed income securities:
Corporate bonds / U.K. Gilts		2,353		—		2,353		—
Other investments:
Diversified growth fund		18,313		—		18,313		—
Liability driven investments		35,403		—		35,403		—
Multi-asset credit fund		3,713		—		3,713		—
Total fair value	$	87,215	$	430	$	86,785	$	—


	December 31, 2019
	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	837	$	837	$	—	$	—
Equity funds:
U.K.		13,121		—		13,121		—
Other international		8,747		—		8,747		—
Fixed income securities:
Corporate bonds / U.K. Gilts		9,446		—		9,446		—
Other investments:
Diversified growth fund		31,345		—		31,345		—
Liability driven investments		12,379				12,379
Total fair value	$	75,875	$	837	$	75,038	$	—

Schedule of estimated future benefit payments


	Estimated
	Benefit
	Payments
Year ended December 31,
2021	$	1,817
2022		2,161
2023		2,078
2024		2,966
2025		2,995
2026 - 2030		17,878
Total	$	29,895

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Measurement

Schedule of fair value of financial instruments


	Carrying		Fair		Fair Value Measurements
As of December 31, 2020	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,498,004	$	604,775	$	—	$	604,775	$	—
Interest rate swap liability		125		125		—		125		—
Acquisition contingent liability		300		300		—		—		300
Nonrecurring assets and liabilities:
Goodwill		359,781		359,781		—		—		359,781


	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 asset		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


	December 31,		December 31,
	2020		2019
Balance as of January 1,	$	721	$	721
Earn-out Adjustment		279		—
Payments/Reductions		(700)		—
Balance as of December 31,	$	300	$	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)

12 Months Ended

Dec. 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
Outstanding Balance as of December 31, 2019	103,102	$	5.97	1.19	$	616
Granted	—		—
Forfeited	—		—
Vested	(76,647)		7.55
Outstanding Balance as of December 31, 2020	26,455	$	3.78	0.91	$	50

Schedule of stock option activity


						Average
		Weighted		Weighted		Remaining
		Average Grant		Average		Vesting Period	Aggregate
	Outstanding	Date Fair Value		Exercise Price		(Years)	Intrinsic Value (2)
Outstanding Balance as of December 31, 2019	1,645,900	$	5.91	$	12.42	2.27	$	—
Granted	70,000		0.75
Exercised	—		—
Forfeited	(80,200)		6.19
Expired	—		—
Outstanding Balance as of December 31, 2020 (1)	1,635,700	$	5.67	$	11.89	1.42	$	—

(1) 379,480 of the outstanding options are exercisable as of December 31, 2020.

(2) Exercise prices of all of the outstanding options as of December 31, 2020 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value was zero.

Related-Party Transactions (Tables)

12 Months Ended

Dec. 31, 2020

Related-Party Transactions

Schedule of payable and receivable balances with affiliates



	December 31, 2020				December 31, 2019
	Receivables and Prepaid Expenses		Payables		Receivables and Prepaid Expenses		Payables
HOV Services, Ltd	$	711	$	—	$	601	$	—
Rule 14		—		44		—		250
HGM		—		52		115		—
Apollo affiliated company		—		—		—		202
Oakana		—		1		—		1
Ex-Sigma 2		—		—		—		1,287
	$	711	$	97	$	716	$	1,740

Segment and Geographic Area Information (Tables)

12 Months Ended

Dec. 31, 2020

Segment and Geographic Area Information

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


		Year ended December 31, 2020
	ITPS		HS		LLPS		Total
Revenue	$	1,005,043	$	219,047	$	68,472	$	1,292,562
Cost of revenue (exclusive of depreciation and amortization)		815,013		159,917		48,614		1,023,544
Segment profit		190,030		59,130		19,858		269,018
Selling, general and administrative expenses (exclusive of depreciation and amortization)								186,104
Depreciation and amortization								93,953
Impairment of goodwill and other intangible assets								—
Related party expense								5,381
Interest expense, net								173,878
Debt modification and extinguishment costs								9,589
Sundry income, net								(153)
Other income, net								(34,788)
Net loss before income taxes							$	(164,946)


		Year ended December 31, 2019
	ITPS		HS		LLPS		Total
Revenue	$	1,234,284	$	256,721	$	71,332	$	1,562,337
Cost of revenue (exclusive of depreciation and amortization)		1,001,655		180,045		43,035		1,224,735
Segment profit		232,629		76,676		28,297		337,602
Selling, general and administrative expenses (exclusive of depreciation and amortization)								198,864
Depreciation and amortization								100,903
Impairment of goodwill and other intangible assets								349,557
Related party expense								9,501
Interest expense, net								163,449
Debt modification and extinguishment costs								1,404
Sundry expense, net								969
Other expense, net								14,429
Net loss before income taxes							$	(501,474)


		Year ended December 31, 2018
	ITPS		HS		LLPS		Total
Revenue	$	1,273,647	$	228,015	$	84,560	$	1,586,222
Cost of revenue (exclusive of depreciation and amortization)		1,010,320		151,877		51,206		1,213,403
Segment profit		263,327		76,138		33,354		372,819
Selling, general and administrative expenses (exclusive of depreciation and amortization)								184,908
Depreciation and amortization								138,077
Impairment of goodwill and other intangible assets								48,127
Related party expense								12,403
Interest expense, net								155,991
Debt modification and extinguishment costs								1,067
Sundry income, net								(3,271)
Other income, net								(3,030)
Net loss before income taxes							$	(161,453)

Schedule of revenues by principal geographic area


	Years ended December 31,
	2020		2019		2018
United States	$	1,057,006	$	1,286,678	$	1,347,516
EMEA		213,418		248,466		211,314
Other		22,138		27,193		27,392
Total Consolidated Revenue	$	1,292,562	$	1,562,337	$	1,586,222

Unaudited Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2020

Selected Quarterly Financial Results (Unaudited)

Schedule of selected quarterly financial information

The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2020 and 2019 (dollars in thousands, except per share data):


	Q1 2020		Q2 2020		Q3 2020		Q4 2020
Revenue:
ITPS	$	284,112	$	243,029	$	234,365	$	243,537
HS		64,049		49,166		54,209		51,623
LLPS		17,290		15,527		16,706		18,949
Total Revenue		365,451		307,722		305,280		314,109

Cost of revenue:
ITPS		235,120		195,835		183,671		200,387
HS		44,931		36,148		39,444		39,394
LLPS		12,488		9,805		11,107		15,214
Cost of revenue (exclusive of depreciation and amortization)		292,539		241,788		234,222		254,995

Selling, general and administrative expenses (exclusive of depreciation and amortization)		50,374		47,014		42,837		45,879
Depreciation and amortization		23,185		22,847		22,095		25,826
Impairment of goodwill and other intangible assets		—		—		—		—
Related party expense		1,551		1,146		1,360		1,324
Operating income (loss)		(2,198)		(5,073)		4,766		(13,915)

Other expense (income), net:
Interest expense, net		41,588		44,440		43,612		44,238
Debt modification and extinguishment costs		—		—		—		9,589
Sundry expense (income), net		1,082		(899)		(434)		98
Other expense (income), net		(34,657)		(584)		(10,414)		10,867
Net loss before income taxes		(10,211)		(48,030)		(27,998)		(78,707)
Income tax (expense) benefit		(2,459)		(661)		(320)		(10,144)
Net loss		(12,670)		(48,691)		(28,318)		(88,851)
Cumulative dividends for Series A Preferred Stock		1,440		(858)		(976)		(915)
Net loss attributable to common stockholders	$	(11,230)	$	(49,549)	$	(29,294)	$	(89,766)
Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2)		49,065,055		49,169,556		49,170,477		49,172,037
Earnings per share:
Basic and diluted	$	(0.23)	$	(1.01)	$	(0.60)	$	(1.82)


	Q1 2019		Q2 2019		Q3 2019		Q4 2019
Revenue:
ITPS	$	325,172	$	309,840	$	292,607	$	306,665
HS		61,343		63,440		62,132		69,806
LLPS		17,842		17,569		18,806		17,115
Total Revenue		404,357		390,849		373,545		393,586

Cost of revenue:
ITPS		259,272		249,589		241,867		250,927
HS		40,341		43,353		42,717		53,634
LLPS		10,988		10,889		10,861		10,297
Cost of revenue (exclusive of depreciation and amortization)		310,601		303,831		295,445		314,858

Selling, general and administrative expenses (exclusive of depreciation and amortization)		49,677		51,162		48,347		49,678
Depreciation and amortization		26,624		24,779		25,079		24,421
Impairment of goodwill and other intangible assets		—		—		97,158		252,399
Related party expense		998		5,331		1,430		1,742
Operating income (loss)		16,457		5,746		(93,914)		(249,512)

Other expense (income), net:
Interest expense, net		39,701		39,959		40,573		43,216
Debt modification and extinguishment costs		—		1,404		—		—
Sundry expense (income), net		2,715		(1,311)		165		(600)
Other expense, net		1,493		2,527		406		10,003
Net loss before income taxes		(27,452)		(36,833)		(135,058)		(302,131)
Income tax (expense) benefit		(4,720)		(4,738)		3,769		(1,953)
Net loss		(32,172)		(41,571)		(131,289)		(304,084)
Cumulative dividends for Series A Preferred Stock		(914)		(914)		(884)		(597)
Net loss attributable to common stockholders	$	(33,086)	$	(42,485)	$	(132,173)	$	(304,681)
Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2)		48,524,074		48,488,731		48,545,583		48,720,451
Earnings per share:						—
Basic and diluted	$	(0.68)	$	(0.88)	$	(2.72)	$	(6.27)

Description of the Business (Details)	12 Months Ended
Description of the Business (Details)	Dec. 31, 2020 segment
Description of the Business
Number of segments	3

Basis of Presentation and Summary of Significant Accounting Policies - Basis of Presentation (Details) $ / shares in Units, $ in Millions			12 Months Ended
	Jan. 26, 2021	Jan. 25, 2021 $ / shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 $ / shares shares
Common stock, shares issued			51,693,931	51,212,945
Common Stock, par value (in dollars per share) \| $ / shares			$ 0.0001	$ 0.0001
Common Stock, Shares, Outstanding			49,242,225	50,283,896
Prior To Stock Split [Member]
Common stock, shares issued			147,511,430	150,851,689
Common Stock, Shares, Outstanding			147,511,430	150,851,689
Subsequent Events
Reverse stock split	0.3333	0.3333
Common Stock, par value (in dollars per share) \| $ / shares		$ 0.0001
Ex-Sigma 2, LLC
Principal amount \| $			$ 55.8
Common stock, shares issued			28,304,167
Exposure to loss \| $			$ 0.0
Ex-Sigma 2, LLC \| Exela Technologies, Inc [Member]
Ownership percentage			54.90%

Basis of Presentation and Summary of Significant Accounting Policies - Going Concern (Details) $ in Thousands							1 Months Ended		3 Months Ended								12 Months Ended
	Mar. 15, 2021 USD ($)	Dec. 17, 2020 USD ($)	Jul. 22, 2020 USD ($)	Mar. 27, 2020 USD ($) installment	Mar. 16, 2020 USD ($)	Jan. 10, 2020 USD ($)	Jan. 31, 2021 USD ($)	Dec. 31, 2020 USD ($) facility	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 18, 2021 USD ($)	May 18, 2020 USD ($)
Net loss									$ 88,851	$ 28,318	$ 48,691	$ 12,670	$ 304,084	$ 131,289	$ 41,571	$ 32,172		$ 178,530	$ 509,116	$ 169,806
Impairment of goodwill and other intangible assets													252,399	$ 97,158					349,557	48,127
Net operating cash outflow																		29,781	63,851	$ (23,600)
Working Capital Deficit								$ 131,400	131,400				147,100					131,400	147,100
Interest Paid on Long Term Debt																		152,700
Accrued liability								60,700	60,700									60,700
Liquidity																					$ 54,100
Cash and cash equivalents								$ 68,221	68,221				$ 6,198					68,221	$ 6,198		34,400
Borrowing facility																					19,700
Receivable Financing																					$ 20,100
Cash Saving Due To Refund Of Tax Relating To Aid Relief				$ 27,900
Number of installments \| installment				2
Numberof production facilities \| facility								1
Expected cost saving							$ 32,500
Net proceeds of private placement	$ 25,200
Forecast
Interest Paid on Long Term Debt																	$ 152,700
A/R Facility
Minimum Liquidity								$ 35,000	35,000									35,000
Amount of facility						$ 160,000
Facility term (years)						5 years
Outstanding borrowings under the facility		$ 83,000				$ 0
Credit Agreement
Minimum Liquidity																						$ 35,000
Receivable Financing																						$ 19,200
Securitization Facility
Available facility amount		$ 145,000
Facility term (years)		5 years
Initial funding supported by receivables		$ 92,000
Further funding supported by inventory and intellectual property		$ 53,000
Outstanding borrowings under the facility								$ 91,900	$ 91,900									91,900
SourceHOV
Gain on sale of investments												35,500						35,500
Membership interests					$ 40,000
Adjustment of purchase consideration												$ 2,000						2,000
Disposed of by sale not discontinued operations \| Physical Records Storage Business
Gain on sale of investments										$ 8,700								$ 8,700
Proceeds from sale of business			$ 12,300

Basis of Presentation and Summary of Significant Accounting Policies - Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2020 segment
Basis of Presentation and Summary of Significant Accounting Policies
Number of segments	3

Basis of Presentation and Summary of Significant Accounting Policies - Obligation For Claim Payment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Restricted Cash
Obligation for claim payment	$ 29,328	$ 39,156

Basis of Presentation and Summary of Significant Accounting Policies - Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) item
Customer relationships \| Minimum
Intangible Assets
Estimated useful life	4 years
Customer relationships \| Maximum
Intangible Assets
Estimated useful life	16 years
Trademarks
Intangible Assets
Estimated useful life	1 year
Developed technology \| Minimum
Intangible Assets
Estimated useful life	5 years
Developed technology \| Maximum
Intangible Assets
Estimated useful life	8 years 6 months
Capitalized Software Costs \| Minimum
Intangible Assets
Estimated useful life	3 years
Capitalized Software Costs \| Maximum
Intangible Assets
Estimated useful life	5 years
Outsource contract costs
Intangible Assets
Number of principal categories \| $	2
Non compete agreements
Intangible Assets
Number of executives terminated \| item	4
Assembled workforce
Intangible Assets
Estimated useful life	4 years

Basis of Presentation and Summary of Significant Accounting Policies - Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basis of Presentation and Summary of Significant Accounting Policies
Impairment related to property, plant and equipment, customer relationships, trademarks, developed technology, capitalized software or outsourced contract costs	$ 0	$ 0	$ 0

Basis of Presentation and Summary of Significant Accounting Policies - Derivative Instruments and Hedging Activities (Details) - Interest rate swap - Not designated as hedging instrument - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2017	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Term of hedging contract (in years)	3 years
Notional amount	$ 347.8	$ 328.1
Weighted Average Interest Rate		1.9275%
Gain (loss) on interest rate swaps		$ 0.4	$ (4.3)

Basis of Presentation and Summary of Significant Accounting Policies - Leases (Details)	12 Months Ended
	Dec. 31, 2020
Basis of Presentation and Summary of Significant Accounting Policies
Options to terminate - operating lease	True
Options to extend - finance lease	true
Options to extend - operating lease	True
Options to terminate - finance lease	true

Basis of Presentation and Summary of Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenues
Revenue	$ 314,109	$ 305,280	$ 307,722	$ 365,451	$ 393,586	$ 373,545	$ 390,849	$ 404,357	$ 1,292,562	$ 1,562,337	$ 1,586,222
United States
Disaggregation of Revenues
Revenue									1,057,006	1,286,678	1,347,516
EMEA
Disaggregation of Revenues
Revenue									213,418	248,466	211,314
Other
Disaggregation of Revenues
Revenue									22,138	27,193	27,392
ITPS
Disaggregation of Revenues
Revenue	243,537	234,365	243,029	284,112	306,665	292,607	309,840	325,172	1,005,043	1,234,284	1,273,647
ITPS \| United States
Disaggregation of Revenues
Revenue									769,487	958,625	1,034,941
ITPS \| EMEA
Disaggregation of Revenues
Revenue									213,418	248,466	211,314
ITPS \| Other
Disaggregation of Revenues
Revenue									22,138	27,193	27,392
HS
Disaggregation of Revenues
Revenue	51,623	54,209	49,166	64,049	69,806	62,132	63,440	61,343	219,047	256,721	228,015
HS \| United States
Disaggregation of Revenues
Revenue									219,047	256,721	228,015
LLPS
Disaggregation of Revenues
Revenue	$ 18,949	$ 16,706	$ 15,527	$ 17,290	$ 17,115	$ 18,806	$ 17,569	$ 17,842	68,472	71,332	84,560
LLPS \| United States
Disaggregation of Revenues
Revenue									$ 68,472	$ 71,332	$ 84,560

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Basis of Presentation and Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Basis of Presentation and Summary of Significant Accounting Policies
Accounts receivable, net	$ 206,868	$ 261,400
Deferred revenues	16,919	16,621
Customer deposits	21,277	27,765
Costs to obtain and fulfill a contract	3,295	4,977
Unbilled receivables, net	23,210	34,135
Revenue recognized from deferred revenue	14,400
Amortization of contract costs	$ 2,400	$ 2,900
Practical expedient on incremental costs of obtaining contracts	true

Basis of Presentation and Summary of Significant Accounting Policies - Performance Obligations (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Basis of Presentation and Summary of Significant Accounting Policies
Contracts with an original expected length	true
2021	$ 54,229
2022	35,692
2023	29,022
2024	26,849
2025	27,144
Total	$ 172,936

Basis of Presentation and Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basis of Presentation and Summary of Significant Accounting Policies
Research and development costs	$ 1.1	$ 1.7	$ 2.0

Basis of Presentation and Summary of Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basis of Presentation and Summary of Significant Accounting Policies
Advertising costs	$ 0.7	$ 1.1	$ 0.9

Basis of Presentation and Summary of Significant Accounting Policies - Operations (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Outside United States
Long-lived assets	$ 31.2	$ 33.7

Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basis of Presentation and Summary of Significant Accounting Policies
Net exchange gains	$ 414	$ 511	$ 1,180

Basis of Presentation and Summary of Significant Accounting Policies - Beneficial Conversion Feature (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Basis of Presentation and Summary of Significant Accounting Policies
Preferred Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Dividend equivalent on Series A Preferred Stock	$ 0.0	$ 0.0	$ 0.0	$ 16.4

Basis of Presentation and Summary of Significant Accounting Policies - Net Loss per Share (Details) $ / shares in Units, $ in Thousands			3 Months Ended								12 Months Ended
	Jan. 26, 2021	Jan. 25, 2021	Dec. 31, 2020 USD ($) $ / shares	Sep. 30, 2020 USD ($) $ / shares	Jun. 30, 2020 USD ($) $ / shares	Mar. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares	Sep. 30, 2019 USD ($) $ / shares	Jun. 30, 2019 USD ($) $ / shares	Mar. 31, 2019 USD ($) $ / shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares
Net loss per share
Anti dilutive shares											1,662,155	1,749,002	1,487,866
Net loss attributable to common stockholders \| $			$ (89,766)	$ (29,294)	$ (49,549)	$ (11,230)	$ (304,681)	$ (132,173)	$ (42,485)	$ (33,086)	$ (179,839)	$ (512,425)	$ (173,461)
Weighted average common shares outstanding - basic and diluted											49,144,429	48,572,979	49,257,696
Loss per share - Basic and diluted (in dollars per share) \| $ / shares			$ (1.82)	$ (0.60)	$ (1.01)	$ (0.23)	$ (6.27)	$ (2.72)	$ (0.88)	$ (0.68)	$ (3.66)	$ (10.55)	$ (3.52)
Common stock, shares returned						1,523,578
Subsequent Events
Net loss per share
Reverse stock split	0.3333	0.3333
Series A Preferred Stock
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share											1,404,621
Warrants
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share											35,000,000

Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accumulated deficit	$ (1,390,038)	$ (1,211,508)
ASU 2014-09
Accumulated deficit		$ 12,800

Sale of Non-Core Assets (Details) - USD ($) $ in Millions			3 Months Ended		12 Months Ended
Sale of Non-Core Assets (Details) - USD ($) $ in Millions	Jul. 22, 2020	Mar. 16, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2020
SourceHOV
Membership interests		$ 40.0
Gain on sale of investments				$ 35.5	$ 35.5
Adjustment of purchase consideration				$ 2.0	2.0
Physical Records Storage Business \| Disposed of by sale not discontinued operations
Gain on sale of investments			$ 8.7		$ 8.7
Proceeds from sale of business	$ 12.3

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventories
Work in process	$ 961	$ 1,903
Finished goods	12,312	14,914
Supplies and parts	5,473	6,491
Less: Allowance for obsolescence	(4,432)	(4,261)
Inventory, Net, Total	$ 14,314	$ 19,047

Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accounts Receivable.
Billed receivables	$ 179,696	$ 222,168
Unbilled receivables	23,210	34,135
Other	9,609	10,072
Less: Allowance for doubtful accounts	(5,647)	(4,975)
Accounts Receivable, net	$ 206,868	$ 261,400

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Prepaid Expenses and Other Current Assets
Prepaids	$ 30,459	$ 23,243
Deposits	632	420
Prepaid expenses and other current assets	$ 31,091	$ 23,663

Leases - Balance Sheet Location (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases
Operating lease right-of-use assets, net	$ 68,861	$ 93,627
Current portion of operating lease liabilities	18,349	25,345
Operating lease liabilities, net of current portion	56,814	73,282
Finance Lease
Finance lease right-of-use asset, net	$ 17,164	$ 30,835
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	US_GAAP:PropertyPlantAndEquipment	US_GAAP:PropertyPlantAndEquipment
Current portion of finance lease liabilities	$ 12,231	$ 13,788
Finance lease liabilities, net of current portion	$ 13,287	$ 20,272

Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Leases
Weighted-average remaining lease term of operating leases	4 years 7 months 6 days	4 years 9 months 18 days
Weighted-average remaining lease term of finance leases	3 years 2 months 12 days	3 years 2 months 12 days
Weighted-average discount rate for operating leases	11.90%	10.50%
Weighted-average discount rate for finance leases	10.70%	9.10%
Interest on financing lease liabilities	$ 2.6	$ 3.3
Amortization expense on finance lease right-of-use assets	$ 12.8	$ 15.1

Leases - Maturities of Finance and Operating Lease Liabilities (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Maturities of operating lease liabilities:
2021	$ 25,733
2022	21,800
2023	15,944
2024	12,412
2025	8,648
2026 and thereafter	15,297
Total operating lease payments	99,834
Less: Imputed interest	(24,671)
Present value of lease liabilities	75,163
Maturities of finance lease liabilities
2021	14,339
2022	6,569
2023	3,700
2024	3,276
2025	2,061
Total finance lease payments	29,945
Less: imputed interest	(4,427)
Present value of finance lease liabilities	$ 25,518

Leases - Rental Expenses (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Rental Expenses (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Rental expenses
Rental expense on operating leases under ASC 842	$ 69.1	$ 77.3
Rent expense for operating leases under ASC 840			$ 83.8

Leases - Cash Paid and Lease Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 34,193	$ 50,398
Financing cash flows from finance leases	12,925	20,860
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases	23,644	19,127
Finance leases	$ 4,372	$ 10,731

Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment, Net
Finance lease right-of-use assets	$ 82,862	$ 85,464
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, before Accumulated Depreciation and Amortization	281,611	290,632
Less: Accumulated depreciation and amortization	(193,760)	(176,995)
Property, plant and equipment, net	87,851	113,637
Depreciation expense
Depreciation expense	39,200	41,400	$ 43,100
Land
Property, Plant and Equipment, Net
Property, plant and equipment, gross	6,903	6,884
Buildings and improvements
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 20,688	20,288
Buildings and improvements \| Minimum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	7 years
Buildings and improvements \| Maximum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	40 years
Leasehold improvements
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 39,797	47,036
Vehicles
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 337	531
Vehicles \| Minimum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	5 years
Vehicles \| Maximum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	7 years
Machinery and equipment
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 22,991	28,489
Machinery and equipment \| Minimum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	5 years
Machinery and equipment \| Maximum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	15 years
Computer equipment and software
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 99,434	92,500
Computer equipment and software \| Minimum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	3 years
Computer equipment and software \| Maximum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	8 years
Furniture and fixtures
Property, Plant and Equipment, Net
Property, plant and equipment, gross	$ 8,599	$ 9,440
Furniture and fixtures \| Minimum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment, Net
Estimated Useful Lives (in Years)	15 years

Intangibles Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
	Oct. 01, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Intangibles
Gross Carrying Amount		$ 720,114		$ 700,173	$ 720,114
Amortization		(377,671)		(407,509)	(377,671)
Intangible Asset, net		342,443		292,664	342,443
Impairment of goodwill	$ 0	252,400	$ 96,200		348,557
Additional impairment charge					1,000
Accumulated impairment losses		560,900			560,900
Carrying amount of indefinite-lived trade names which are not amortizable				5,300
Aggregated amortization expense				$ 54,700	$ 59,300	$ 94,900
Customer relationships
Intangibles
Weighted Average Useful Life (in years)				10 years 2 months 12 days	10 years 10 months 24 days
Gross Carrying Amount		508,074		$ 508,485	$ 508,074
Amortization		(237,313)		(278,306)	(237,313)
Intangible Asset, net		270,761		$ 230,179	$ 270,761
Developed technology
Intangibles
Weighted Average Useful Life (in years)				3 years 4 months 24 days	4 years 3 months 18 days
Gross Carrying Amount		89,053		$ 88,553	$ 89,053
Amortization		(87,109)		(87,111)	(87,109)
Intangible Asset, net		1,944		1,442	1,944
Trade names
Intangibles
Gross Carrying Amount		8,400		8,400	8,400
Amortization		(3,100)		(3,100)	(3,100)
Intangible Asset, net		5,300		5,300	5,300
Impairment charge	$ 0		$ 1,000		1,000
Accumulated impairment losses		44,100		$ 44,100	$ 44,100
Outsource contract costs
Intangibles
Weighted Average Useful Life (in years)				3 years 3 months 18 days	3 years 3 months 18 days
Gross Carrying Amount		16,726		$ 16,331	$ 16,726
Amortization		(11,749)		(13,036)	(11,749)
Intangible Asset, net		4,977		$ 3,295	$ 4,977
Internally developed software
Intangibles
Weighted Average Useful Life (in years)				3 years 8 months 12 days	4 years 2 months 12 days
Gross Carrying Amount		43,261		$ 47,182	$ 43,261
Amortization		(12,129)		(20,152)	(12,129)
Intangible Asset, net		31,132		$ 27,030	$ 31,132
Trademarks
Intangibles
Weighted Average Useful Life (in years)					1 year
Gross Carrying Amount		23,378			$ 23,378
Amortization		(23,370)			(23,370)
Intangible Asset, net		8			$ 8
Assembled workforce
Intangibles
Weighted Average Useful Life (in years)				2 years	3 years
Gross Carrying Amount		4,473		$ 4,473	$ 4,473
Amortization		(1,118)		(2,237)	(1,118)
Intangible Asset, net		3,355		$ 2,236	$ 3,355
Purchased software
Intangibles
Weighted Average Useful Life (in years)				13 years	14 years
Gross Carrying Amount		26,749		$ 26,749	$ 26,749
Amortization		(1,783)		(3,567)	(1,783)
Intangible Asset, net		$ 24,966		$ 23,182	$ 24,966

Intangibles Assets and Goodwill - Intangibles - Amortization expense (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Intangibles amortization expense
2021	$ 51,120
2022	46,627
2023	38,108
2024	30,528
2025	23,106
Thereafter	98,237
Intangible assets, net	$ 287,726

Intangibles Assets and Goodwill - Goodwill (Details) $ in Thousands			3 Months Ended	12 Months Ended
	Oct. 01, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)
Goodwill
Number of segments \| segment				3
Beginning of Year Balance				$ 359,771	$ 708,258
Impairments	$ 0	$ (252,400)	$ (96,200)		(348,557)
Currency Translation Adjustments				10	70
End of Year Balance		359,771		359,781	359,771
Accumulated impairment losses		560,900			560,900
ITPS
Goodwill
Beginning of Year Balance				254,120	571,575
Impairments					(317,525)
Currency Translation Adjustments				10	70
End of Year Balance		254,120		254,130	254,120
Accumulated impairment losses				317,500
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
Impairments					(31,032)
End of Year Balance		18,865		18,865	18,865
Accumulated impairment losses		$ 212,300		$ 243,400	$ 212,300

Accrued Liabilities and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued liabilities
Accrued taxes (exclusive of income taxes)	$ 12,953	$ 9,608
Accrued lease exit obligations	270	1,127
Accrued professional and legal fees	33,897	33,421
Accrued appraisal action liability	60,654	56,412
Accrued legal reserve for pending litigation	15,146	5,669
Accrued transaction costs	2,739	2,250
Other accruals	740	13,066
Total accrued liabilities including accrued interest	126,399	121,553
Other Long-term liabilities
Deferred revenue	542	339
Accrued rent	449	669
Accrued lease exit obligations	195	136
Accrued compensation expense	1,897	2,075
Cares Act payroll tax deferrals	7,183
Other	3,358	3,743
Other Long-term liabilities	$ 13,624	$ 6,962

Long-Term Debt and Credit Facilities - Senior Secured Notes (Details) - Senior secured notes $ in Billions	Jul. 12, 2017 USD ($)
Debt instruments
Principal amount	$ 1.0
Interest rate (in percent)	10.00%

Long-Term Debt and Credit Facilities - Debt Refinancing (Details) - USD ($) $ in Millions	Jul. 12, 2017	Dec. 31, 2020	Dec. 31, 2019
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		$ 19.5	$ 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	Dec. 31, 2020	Dec. 31, 2019
Debt instruments
Outstanding amount of term loans			$ 1,537,956	$ 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)		1.00%
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			12 Months Ended
	Apr. 16, 2019	Jul. 13, 2018	Dec. 31, 2019	Dec. 31, 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 Thousands				1 Months Ended	12 Months Ended
	Dec. 17, 2020	May 21, 2020	Jan. 10, 2020	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	May 18, 2020
Proceeds from initial borrowings					$ 29,750	$ 206,500	$ 30,000
A/R Facility
Accounts Receivable from Securitization			$ 160,000
Accounts Receivable, Securitization, Term			5 years
Minimum liquidity for A/R facility			$ 60,000					$ 35,000
Forbearance fee								$ 5,000
Forbearance fee payable			$ 4,800
Variable interest rate (as a percent)			4.50%
Outstanding borrowings under the facility	$ 83,000		$ 0
Facility term (years)			5 years
Early termination fee	800
Write off of previously recognized debt issuance costs					8,200
Repayment of principal, accrued interest and fees	$ 500
A/R Facility \| Base rate
Variable interest rate (as a percent)		5.75%	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)		6.75%	4.75%
Floor interest rate			1.00%
Securitization Facility
Variable interest rate (as a percent)				8.75%
Outstanding borrowings under the facility				$ 91,900	$ 91,900
Facility term (years)	5 years
Available facility amount	$ 145,000
Initial funding supported by receivables	92,000
Further funding supported by inventory and intellectual property	53,000
Proceeds from initial borrowings	$ 92,000
Securitization Facility \| Federal funds rate
Variable interest rate (as a percent)				0.50%
Securitization Facility \| One-month adjusted LIBOR
Variable interest rate (as a percent)				1.00%
Securitization Facility \| LIBOR
Variable interest rate (as a percent)				9.75%

Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt instruments
Total debt	$ 1,537,956	$ 1,434,875
Less: Current portion of long-term debt	(39,952)	(36,490)
Long-term debt, net of current maturities	1,498,004	1,398,385
Senior secured notes
Debt instruments
Total debt	984,216	979,060
Other
Debt instruments
Total debt	37,653	30,232
First lien credit agreement
Debt instruments
Total debt	343,597	360,583
Debt discount	4,800	6,500
Unamortized debt issuance costs	17,100	18,900
Senior secured notes
Debt instruments
Debt discount	11,300	14,900
Unamortized debt issuance costs	4,500	6,000
Revolver
Debt instruments
Total debt	80,543	$ 65,000
Securitization Facility
Debt instruments
Total debt	$ 91,947

Long-Term Debt and Credit Facilities - Maturities of long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Maturities of long-term debt
2021	$ 39,952
2022	115,000
2023	1,325,741
2024	2,923
2025	91,947
Total long-term debt	1,575,563
Less: Unamortized discount and debt issuance costs	(37,607)
Total debt	$ 1,537,956	$ 1,434,875

Income Taxes - Components And Provisions (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Components income/ (loss) before income taxes
United States									$ (158,187)	$ (511,165)	$ (180,245)
Foreign									(6,760)	9,691	18,792
Income/ (loss) before income taxes									(164,947)	(501,474)	(161,453)
Provision for federal, state, and foreign income taxes
Federal - Current										(1,308)	1,308
Federal - Deferred									480	(3,879)	(2,006)
State - Current									1,325	2,255	390
State - Deferred									1,542	(807)	2,339
Foreign - Current									4,318	5,770	3,435
Foreign - Deferred									5,919	5,611	2,887
Income tax expense	$ 10,144	$ 320	$ 661	$ 2,459	$ 1,953	$ (3,769)	$ 4,738	$ 4,720	$ 13,584	$ 7,642	$ 8,353

Income Taxes - Income tax reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Statutory tax rate									21.00%	35.00%
Reconciliation of effective income tax amount
Tax at statutory rate									$ (34,639)	$ (105,310)	$ (33,905)
State income taxes									(5,234)	(7,666)	(6,557)
Foreign income taxes									(516)	4,390	1,228
Nondeductible goodwill impairment										61,699	9,002
Permanent differences									218	1,275	2,542
Litigation settlement									71	3,310	608
Changes in valuation allowance									53,115	30,064	19,433
Unremitted earnings									(275)	1,604	4,735
GILTI Inclusion									(4,996)	3,772	2,289
Expiration of tax attributes									4,944	10,807	8,353
Other									896	3,697	625
Income tax expense	$ 10,144	$ 320	$ 661	$ 2,459	$ 1,953	$ (3,769)	$ 4,738	$ 4,720	13,584	$ 7,642	$ 8,353
Income tax expense (benefit) GILTI									0
Estimated income tax expense (benefit) GILT									5,000
Income tax expense (benefit) BEAT									$ 0

Income Taxes - Components of deferred income tax liabilities and assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2015	Dec. 31, 2019
Deferred income tax liabilities:
Book over tax basis of intangible assets and fixed assets	$ (65,724)		$ (77,088)
Unremitted foreign earnings	(6,063)		(6,339)
Operating lease and finance lease right-of-use assets	(11,597)		(16,981)
Other, net	(2,604)		(2,571)
Total deferred income tax liabilities	(85,988)		(102,979)
Deferred income tax assets:
Allowance for doubtful accounts and receivable adjustments	1,704		1,498
Inventory	1,677		903
Accrued liabilities	15,345		11,608
Net operating loss and tax credit carryforwards	171,148		158,265
Tax deductible goodwill	6,171		8,066
Disallowed Interest Deduction	74,672		56,873
Operating lease and finance lease liabilities	13,004		18,127
Other, net	19,334		15,480
Total deferred income tax assets	303,055		270,820
Valuation allowance	(220,030)		(163,805)
Total net deferred income tax assets			$ 4,036
Total net deferred income tax liabilities	(2,963)
Increase (decrease) in valuation allowance	56,200
Federal
Deferred income tax assets:
Valuation allowance related to disallowed interest deduction	64,700
Valuation allowance related to limitation of utilization of NOL carryforwards	60,500
Increase (decrease) in valuation allowance		$ 3,500
State
Deferred income tax assets:
Valuation allowance related to disallowed interest deduction	9,100
Valuation allowance related to limitation of utilization of NOL carryforwards	4,500
Foreign.
Deferred income tax assets:
Valuation allowance related to disallowed interest deduction	$ 81,300

Income Taxes - Net operating loss carryforwards (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Operating loss carryforwards
Tax deductible goodwill	$ 31,400
Trans Centra Inc
Operating loss carryforwards
Tax deductible goodwill	12,200
Reorganization 2014
Operating loss carryforwards
Tax deductible goodwill	19,200
Federal
Operating loss carryforwards
Net operating loss carryforwards	601,012
Federal \| 2021 - 2025
Operating loss carryforwards
Net operating loss carryforwards	80,880
Federal \| 2026 - 2030
Operating loss carryforwards
Net operating loss carryforwards	145,219
Federal \| 2031 - 2040
Operating loss carryforwards
Net operating loss carryforwards	374,913
State
Operating loss carryforwards
Net operating loss carryforwards	413,137
State \| 2021 - 2025
Operating loss carryforwards
Net operating loss carryforwards	72,038
State \| 2026 - 2030
Operating loss carryforwards
Net operating loss carryforwards	91,726
State \| 2031 - 2040
Operating loss carryforwards
Net operating loss carryforwards	249,373
Foreign.
Operating loss carryforwards
Net operating loss carryforwards	55,700
Foreign. \| 2024 \| Exela Poland
Operating loss carryforwards
Net operating loss carryforwards	1,200
Foreign. \| 2026 \| Hungary and Serbia
Operating loss carryforwards
Net operating loss carryforwards	300
Foreign. \| 2027 \| Netherland
Operating loss carryforwards
Net operating loss carryforwards	1,700
Foreign. \| 2031 \| Finland
Operating loss carryforwards
Net operating loss carryforwards	$ 900

Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Recognized tax benefit				$ 700
Unrecognized tax benefits	$ 1,836	$ 1,476	$ 1,047	1,836	$ 4,314	$ 1,476
Accrued interest and penalties on unrecognized tax benefits				2,100	2,100	$ 2,300
Interest and penalties recorded on unrecognized tax benefits	(0)	(200)	(400)
Uncertain tax position	2,600
Reconciliation of total amounts of unrecognized tax benefits
Balance at beginning of the period	4,314	1,476	1,047
Gross increases - tax positions in current period	151	1,470	128
Balance at end of the period	1,836	4,314	1,476
Deferred taxes provided for withholding or other taxes for repatriation of foreign earnings	0
Undistributed earnings from foreign subsidiaries				106,300
Foreign withholding taxes on the undistributed earnings				$ 6,000	$ 6,300
Undistributed Foreign Earnings	300	1,600	4,700
Prior tax period 1
Reconciliation of total amounts of unrecognized tax benefits
Gross increases - tax positions in prior period		1,378	$ 301
Gross decreases - tax positions in prior period	(21)
Prior tax period 2
Reconciliation of total amounts of unrecognized tax benefits
Gross decreases - tax positions in prior period	$ (2,608)	$ (10)

Employee Benefit Plans - Germany & UK (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Pension plans
Plan assets	$ 87,215	$ 75,875	$ 62,952
Weighted average expected long-term rate	3.45%
German Pension Plan \| Unfunded Plan
Pension plans
Plan assets	$ 0
German Pension Plan \| Unfunded Plan \| Minimum
Pension plans
Qualifying period	10 years
U.K. Pension Plan
Pension plans
Historical performance period	10 years
Weighted average expected long-term rate	3.47%	3.87%
U.K. Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Historical performance period	15 years	10 years
U.K. Pension Plan \| Maximum
Pension plans
Historical performance period	20 years	20 years
Asterion Pension Plan
Pension plans
Weighted average expected long-term rate	0.79%	1.10%
Asterion Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Norway Pension Plan
Pension plans
Weighted average expected long-term rate	2.70%	3.80%
Norway Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years

Employee Benefit Plans - Funded Status (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Change in Benefit Obligation:
Benefit obligation at beginning of period	$ 100,961	$ 90,051
Service cost	69	80
Interest cost	1,984	2,448
Actuarial loss	18,861	9,168
Plan amendments	(10)	(835)
Benefits paid	(4,745)	(3,082)
Foreign-exchange rate changes	4,891	3,131
Benefit obligation at end of year	122,011	100,961
Change in Plan Assets:
Fair value of plan assets at beginning of period	75,875	62,952
Actual return on plan assets	10,755	10,906
Employer contributions	2,052	2,557
Benefits paid	(4,651)	(2,995)
Foreign-exchange rate changes	3,184	2,455
Fair value of plan assets at end of period	87,215	75,875
Funded status at end of year			$ (34,796)	$ (25,086)
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(35,515)	(25,681)
Minimum regulatory benefit for Philippine legal entity			600	500
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial loss	(17,064)	(8,059)
Net amount recognized in accumulated other comprehensive loss			17,064	8,059
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate fair value of plan assets	87,215	62,952	87,215	75,875
Defined Benefit Plan, Overfunded Plan [Member]
Change in Plan Assets:
Fair value of plan assets at end of period	87,215
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate fair value of plan assets	87,215		87,215
Defined Benefit Plan, Underfunded Plan [Member]
Change in Plan Assets:
Fair value of plan assets at beginning of period	75,875
Fair value of plan assets at end of period		75,875
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate fair value of plan assets	75,875	75,875		75,875
Underfunded Or Unfunded Plan [Member]
Change in Plan Assets:
Fair value of plan assets at beginning of period	75,875
Fair value of plan assets at end of period	87,215	75,875
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation			122,010	100,961
Aggregate accumulated benefit obligation			122,010	100,961
Aggregate fair value of plan assets	75,875	$ 75,875	87,215	75,875
U.K. And Asterion Plans
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(35,515)	(25,681)
U.K. Pension Plan
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(29,700)	(20,600)
Asterion Pension Plan
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(2,700)	(2,400)
Norway Pension Plan
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(100)	(100)
German Pension Plan
Net amount recognized in the Consolidated Balance Sheets:
Pension liability (b)			(2,400)	$ (2,100)
German Pension Plan \| Unfunded Plan
Change in Plan Assets:
Fair value of plan assets at end of period	0
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate fair value of plan assets	$ 0		$ 0

Employee Benefit Plans - Tax Effect on Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs
Net actuarial loss	$ (17,064)	$ (8,059)
Deferred tax benefit	$ 2,000	$ 2,000

Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net periodic benefit cost
Service cost	$ 69	$ 80
Interest cost	1,984	2,448
Employer contributions	2,052	2,557
Pension And Postretirement [Member]
Net periodic benefit cost
Service cost	74	80	$ 82
Interest cost	1,984	2,448	2,350
Expected return on plan assets	(2,530)	(2,460)	(2,841)
Amortization of prior service cost	150	(169)	9
Amortization of net (gain) loss	1,739	1,768	1,755
Settlement loss	552
Net periodic benefit cost	$ 1,969	$ 1,667	$ 1,355

Employee Benefits Plans - Valuation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Valuation
Maximum percentage of unrecognized gains (losses) for amortization	10.00%
Amortization period for gains (losses) of defined benefit plans	15 years
Fair value of plan assets	$ 87,215	$ 75,875	$ 62,952
Weighted-average assumptions used to determine net periodic benefit cost:
Expected asset return	3.45%
U.K. Pension Plan
Valuation
Historical performance period	10 years
Weighted-average assumptions used to determine benefit obligations:
Discount rate	1.40%	2.10%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	2.10%	2.80%
Expected asset return	3.47%	3.87%
U.K. Pension Plan \| Minimum
Valuation
Historical performance period	15 years	10 years
U.K. Pension Plan \| Maximum
Valuation
Historical performance period	20 years	20 years
Asterion Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	0.79%	1.10%
Rate of compensation increase		2.50%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	0.79%	1.10%
Expected asset return	0.79%	1.10%
Rate of compensation increase		2.50%
Norway Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	1.70%	2.30%
Rate of compensation increase	2.25%	2.25%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	1.70%	2.30%
Expected asset return	2.70%	3.80%
Rate of compensation increase	2.25%	2.25%
German Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	0.75%	1.00%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	0.75%	1.00%
Unfunded Plan \| German Pension Plan
Valuation
Fair value of plan assets	$ 0

Employee Benefit Plans - Plan Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	100.00%	100.00%	100.00%
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 87,215	$ 75,875	$ 62,952
Minimum
Defined Benefit Plan Disclosure [Line Items]
Investment objective period to earn long-term expected rate of return	15 years
Maximum
Defined Benefit Plan Disclosure [Line Items]
Investment objective period to earn long-term expected rate of return	20 years
Level 1
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 430	837
Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	86,785	75,038
Cash.
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	430	837
Cash. \| Level 1
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 430	$ 837
UK and international equities
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	31.40%	29.90%	27.10%
U.S.
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 16,201	$ 13,121
U.S. \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	16,201	13,121
International
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	10,802	8,747
International \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 10,802	$ 8,747
UK government and corporate bonds
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	2.70%	12.50%	12.70%
Corporate bonds / UK Gilts
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 2,353	$ 9,446
Corporate bonds / UK Gilts \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 2,353	$ 9,446
Diversified growth fund
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	21.00%	41.30%	38.90%
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 18,313	$ 31,345
Diversified growth fund \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 18,313	$ 31,345
Multi Asset Credit Fund [Member]
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	4.30%
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 3,713
Multi Asset Credit Fund [Member] \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 3,713
Liability Driven Investments [Member]
Defined Benefit Plan, Plan Assets, Allocations [Abstract]
Weighted average allocation of plan assets (as a percent)	40.60%	16.30%	21.30%
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 35,403	$ 12,379
Liability Driven Investments [Member] \| Level 2
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract]
Fair value of plan assets	$ 35,403	$ 12,379

Employee Benefit Plans - Employer Contributions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Employer Contributions
Total employer contributions to pension plans	$ 2,100	$ 2,600
Employer contributions to pension plans expected during 2021	3,100
Estimated Future Benefit Payments
2021	1,817
2022	2,161
2023	2,078
2024	2,966
2025	2,995
2026 - 2030	17,878
Total estimated future benefit payments	$ 29,895

Commitments and Contingencies (Details) - USD ($)	Mar. 26, 2020	Jan. 30, 2020	Sep. 21, 2017	Dec. 31, 2020	Mar. 31, 2020
Commitments and Contingencies
Shares returned to company					1,523,578
Accrued liability				$ 60,700,000
Accrual amount for settlement				60,700,000
Adverse Arbitration Order
Commitments and Contingencies
Accrued liability				9,600,000
Accrual amount for settlement				$ 9,600,000
SourceHOV \| Petitioners
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
SourceHOV \| Minimum \| Petitioners
Commitments and Contingencies
Argued fair value per share			$ 1,633.85
SourceHOV \| Maximum \| Petitioners
Commitments and Contingencies
Argued fair value per share			$ 5,079.28
SourceHOV \| Fair value guarantee \| Common Stock
Commitments and Contingencies
Number of shares owned			10,304
Ex-Sigma 2, LLC \| Petitioners
Commitments and Contingencies
Shares returned to company					1,523,578

Fair Value Measurement (Details) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Oct. 01, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Assets and liabilities measured at fair value
Impairment of goodwill	$ 0	$ 252,400	$ 96,200		$ 348,557
Carrying amounts and estimated fair values of financial instruments
Goodwill		359,771		$ 359,781	359,771	$ 708,258
Senior secured term loan
Assets and liabilities measured at fair value
Fair value percentage				34.80%
Senior secured notes
Assets and liabilities measured at fair value
Fair value percentage				30.80%
Level 3
Reconciliation of net assets and liabilities
Balance as of Beginning of Period				$ 721	721
Earn-out Adjustments				279
Payments/Reductions				(700)
Balance as of End of Period		721		300	721
Carrying Amount \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt		1,398,385		1,498,004	1,398,385
Interest rate swap liability		501		125	501
Acquisition contingent liability		721		300	721
Carrying Amount \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill		359,771		359,781	359,771
Fair Value \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt		632,796		604,775	632,796
Interest rate swap liability		501		125	501
Acquisition contingent liability		721		300	721
Fair Value \| Recurring assets and liabilities \| Level 2
Carrying amounts and estimated fair values of financial instruments
Long-term debt		632,796		604,775	632,796
Interest rate swap liability		501		125	501
Fair Value \| Recurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability		721		300	721
Fair Value \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill		359,771		359,781	359,771
Fair Value \| Nonrecurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Goodwill		$ 359,771		$ 359,781	$ 359,771

Stock-Based Compensation (Details) - RSU's - 2013 Plan - shares	Dec. 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	Dec. 31, 2020	Dec. 31, 2019	Dec. 20, 2017
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			2,774,588

Stock-Based Compensation - Restricted Stock Unit Grants (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Stock-Based Compensation
Adjustment in number of tax withholding shares in 2018	3,433
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings	1,567
Payment, Tax Withholding, Share-based Payment Arrangement	$ 7	$ 223
RSU's
Stock-Based Compensation
Payment, Tax Withholding, Share-based Payment Arrangement	$ 100
RSU's \| 2018 Plan
Number of Shares
Balance at the beginning of the period (in shares)	103,102
Shares vested	(76,647)
Balance at the end of the period (in shares)	26,455	103,102
Weighted Average Grant Date Fair Value
Balance at the beginning of the period	$ 5.97
Shares vested	7.55
Balance at the end of the period	$ 3.78	$ 5.97
Average Remaining Contractual Life (Years)
Weighted average remaining contractual life (in years)	10 months 28 days	1 year 2 months 8 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding	$ 50	$ 616
RSU's \| 2018 Plan \| Minimum
Stock-Based Compensation
Vesting period	1 year
RSU's \| 2018 Plan \| Maximum
Stock-Based Compensation
Vesting period	2 years
Common Stock
Stock-Based Compensation
Adjustment in number of tax withholding shares in 2018	921

Stock-Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Jan. 18, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
2013 Plan and 2018 Plan \| Selling, general and administrative expense
Unrecognized compensation expense
Total compensation expense		$ 2.8	$ 7.8	$ 7.6
Stock options
Outstanding
Exercised (in shares)		379,480
Stock options \| 2013 Plan and 2018 Plan
Unrecognized compensation expense
Unrecognized compensation expense		$ 2.8
Stock options \| 2018 Plan
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)		1,645,900
Granted (in shares)		70,000
Forfeited (in shares)		(80,200)
Outstanding Balance at the end of the year (in shares)		1,635,700	1,645,900
Weighted average Grant Date fair Value
Outstanding balance at the beginning of the period		$ 5.91
Granted		0.75
Forfeited		6.19
Outstanding balance at the end of the period		5.67	$ 5.91
Weighted Average Exercise Price
Outstanding Balance at the beginning of the year		12.42
Outstanding Balance at the end of the year (in shares)		$ 11.89	$ 12.42
Additional information
Average Remaining Vesting Period		1 year 5 months 1 day	2 years 3 months 7 days
Aggregate Intrinsic Value		$ 0.0
Stock options \| 2018 Plan \| Minimum
Stock-based compensation
Vesting period		2 years
Stock options \| 2018 Plan \| Maximum
Stock-based compensation
Vesting period		4 years

Stockholders' Equity - Common Stock (Details)	12 Months Ended
Stockholders' Equity - Common Stock (Details)	Dec. 31, 2020 Vote shares	Dec. 31, 2019 shares	Dec. 31, 2018 shares	Mar. 31, 2020 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	51,693,931	51,212,945
Common Stock, shares, outstanding	49,242,225	50,283,896
Common stock, shares returned				1,523,578
Series A Preferred Stock
Common Stock
Preferred shares converted to common shares (in shares)	1,004,183
Common Stock
Common Stock
Preferred shares converted to common shares (in shares)	409,238	112,071	662,256

Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 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
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
Preferred Stock convertible	0.4269
Preferred Stock, cumulative dividends rate (in percentage)	10.00%
Accumulated preferred stock, Dividends	$ 1.3	$ 3.3
Additional common stock issuable upon conversion of remaining convertible shares	1,404,621
Cumulative accrued but unpaid dividends			$ 10.8
Per share average of cumulative preferred dividends (in dollars per share)	$ 3.3

Stockholders' Equity - Treasury Stock (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2020	Nov. 08, 2017
Stockholders' Equity
Treasury stock, shares authorized			1,666,667
Share Repurchased (in shares)		929,049
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares)	1,523,578

Stockholders' Equity - Warrants (Details)	12 Months Ended
Stockholders' Equity - Warrants (Details)	Dec. 31, 2020 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	$ 34.50
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	$ 72.00
Minimum trading days within 30-day period at $72 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	34,986,302
Number of warrants separated from the original unit	34,986,302
Number of warrants not separated from the original unit	13,698
Warrants \| IPO
Warrants
Units issued	35,000,000
Common stock included in units	1
Warrants included in units	1

Related-Party Transactions - Relationship with HandsOn Global Management (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) agreement	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2016
Related-Party Transactions
Amount of related party transaction									$ 5,381	$ 9,501	$ 12,403
Related party expense	$ 1,324	$ 1,360	$ 1,146	$ 1,551	$ 1,742	$ 1,430	$ 5,331	$ 998	$ 5,381	9,501	12,403
HGM
Related-Party Transactions
Ownership percentage	50.00%								50.00%
HGM \| Travel Expense
Related-Party Transactions
Amount of related party transaction									$ 100	600
HGM \| Travel Expense \| Maximum
Related-Party Transactions
Amount of related party transaction											100
HGM \| Master Service Agreement
Related-Party Transactions
Number of master agreements \| agreement									10
Entities affiliated with HGM managed funds \| Master Service Agreement
Related-Party Transactions
Revenue share percentage												25.00%
SourceHOV \| Master Service Agreement
Related-Party Transactions
Revenue share percentage												75.00%
SourceHOV \| Entities affiliated with HGM managed funds \| Master Service Agreement
Related-Party Transactions
Related party expense									$ 1,900	$ 1,000	$ 700

Related-Party Transactions - Relationship with HOV Services, Ltd (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related-Party Transactions
Rental expense on operating leases under ASC 842	$ 69,100	$ 77,300
Amount of related party transaction	5,381	9,501	$ 12,403
Affiliate of largest stockholder
Related-Party Transactions
Rental expense on operating leases under ASC 842	200	400	700
HOV Services, Ltd \| Data Capture And Technology Services \| Cost of revenue
Related-Party Transactions
Amount of related party transaction	$ 1,400	$ 1,500	$ 1,600

Related Party Transactions - Relationship with Ex-Sigma and Ex-Sigma 2 (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Oct. 31, 2019	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Related party expense		$ 1,324	$ 1,360	$ 1,146	$ 1,551	$ 1,742	$ 1,430	$ 5,331	$ 998	$ 5,381	$ 9,501	$ 12,403
Settlement gain on related party payable to Ex-Sigma 2										1,287
Ex-Sigma 2, LLC
Related Party Transaction [Line Items]
Cash reimbursed to related parties						$ 5,600
Margin Loan \| Ex-Sigma 2, LLC
Related Party Transaction [Line Items]
Related party expense										1,700	5,200
Related party payables		$ 6,900								6,900
Settlement gain on related party payable to Ex-Sigma 2										1,300
Amount of bonus paid	$ 4,600
Payroll taxes	1,700
Margin Loan \| Ex-Sigma 2, LLC \| Selling, general and administrative expense
Related Party Transaction [Line Items]
Amount of bonus expense incurred	$ 6,300										6,300
Secondary Offering \| Ex-Sigma 2, LLC
Related Party Transaction [Line Items]
Related party expense											2,100	2,400
Legal Expenses \| Ex-Sigma 2, LLC
Related Party Transaction [Line Items]
Related party expense										$ 300	$ 600	$ 400

Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related-Party Transactions
Related party expense	$ 1,324	$ 1,360	$ 1,146	$ 1,551	$ 1,742	$ 1,430	$ 5,331	$ 998	$ 5,381	$ 9,501	$ 12,403
Consulting Services \| Oakana Holdings Inc
Related-Party Transactions
Related party expense									$ 200	$ 200	$ 200

Related Party Transactions - Relationship with Apollo Global Management, LLC (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related-Party Transactions
Related party expense	$ 1,324	$ 1,360	$ 1,146	$ 1,551	$ 1,742	$ 1,430	$ 5,331	$ 998	$ 5,381	$ 9,501	$ 12,403
Management Holdings \| Master Service Agreement
Related-Party Transactions
Revenue from related parties									100	600	600
Caesars \| Master Service Agreement
Related-Party Transactions
Revenue from related parties									900	4,400	4,100
ADT LLC \| Master Service Agreement
Related-Party Transactions
Revenue from related parties									300	1,200	600
Diamond Resorts Centralized Services \| Master Service Agreement
Related-Party Transactions
Revenue from related parties									900	5,400	5,700
Diamond Resorts Centralized Services \| Master Service Agreement \| Maximum
Related-Party Transactions
Related party cost of revenue									100	100	100
Presidio Group \| Master Service Agreement
Related-Party Transactions
Related party expense									$ 200	$ 1,000	$ 700

Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payable and Receivable Balances with Affiliates
Receivables and Prepaid Expenses	$ 711	$ 716
Payables	97	1,740
HOV Services, Ltd
Payable and Receivable Balances with Affiliates
Receivables and Prepaid Expenses	711	601
Rule 14, LLC
Payable and Receivable Balances with Affiliates
Payables	44	250
HGM
Payable and Receivable Balances with Affiliates
Receivables and Prepaid Expenses		115
Payables	52
Apollo
Payable and Receivable Balances with Affiliates
Payables		202
Oakana Holdings Inc
Payable and Receivable Balances with Affiliates
Payables	$ 1	1
Ex-Sigma
Payable and Receivable Balances with Affiliates
Payables		$ 1,287

Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment information
Number of segments \| segment									3
Revenue	$ 314,109	$ 305,280	$ 307,722	$ 365,451	$ 393,586	$ 373,545	$ 390,849	$ 404,357	$ 1,292,562	$ 1,562,337	$ 1,586,222
Cost of revenue (exclusive of depreciation and amortization)	254,995	234,222	241,788	292,539	314,858	295,445	303,831	310,601	1,023,544	1,224,735	1,213,403
Segment profit									269,018	337,602	372,819
Selling, general and administrative expenses (exclusive of depreciation and amortization)	45,879	42,837	47,014	50,374	49,678	48,347	51,162	49,677	186,104	198,864	184,908
Depreciation and amortization	25,826	22,095	22,847	23,185	24,421	25,079	24,779	26,624	93,953	100,903	138,077
Impairment of goodwill and other intangible assets					252,399	97,158				349,557	48,127
Related party expense									5,381	9,501	12,403
Interest expense, net	44,238	43,612	44,440	41,588	43,216	40,573	39,959	39,701	173,878	163,449	155,991
Debt modification and extinguishment costs	9,589						1,404		9,589	1,404	1,067
Sundry expense (income), net	98	(434)	(899)	1,082	(600)	165	(1,311)	2,715	(153)	969	(3,271)
Other expense (income), net	10,867	(10,414)	(584)	(34,657)	10,003	406	2,527	1,493	(34,788)	14,429	(3,030)
Net loss before income taxes	(78,707)	(27,998)	(48,030)	(10,211)	(302,131)	(135,058)	(36,833)	(27,452)	(164,946)	(501,474)	(161,453)
ITPS
Segment information
Revenue	243,537	234,365	243,029	284,112	306,665	292,607	309,840	325,172	1,005,043	1,234,284	1,273,647
Cost of revenue (exclusive of depreciation and amortization)	200,387	183,671	195,835	235,120	250,927	241,867	249,589	259,272	815,013	1,001,655	1,010,320
Segment profit									190,030	232,629	263,327
HS
Segment information
Revenue	51,623	54,209	49,166	64,049	69,806	62,132	63,440	61,343	219,047	256,721	228,015
Cost of revenue (exclusive of depreciation and amortization)	39,394	39,444	36,148	44,931	53,634	42,717	43,353	40,341	159,917	180,045	151,877
Segment profit									59,130	76,676	76,138
LLPS
Segment information
Revenue	18,949	16,706	15,527	17,290	17,115	18,806	17,569	17,842	68,472	71,332	84,560
Cost of revenue (exclusive of depreciation and amortization)	$ 15,214	$ 11,107	$ 9,805	$ 12,488	$ 10,297	$ 10,861	$ 10,889	$ 10,988	48,614	43,035	51,206
Segment profit									$ 19,858	$ 28,297	$ 33,354

Segment and Geographic Area Information - Revenues by principal geographic area (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues by principal geographic area
Revenue	$ 314,109	$ 305,280	$ 307,722	$ 365,451	$ 393,586	$ 373,545	$ 390,849	$ 404,357	$ 1,292,562	$ 1,562,337	$ 1,586,222
United States
Revenues by principal geographic area
Revenue									1,057,006	1,286,678	1,347,516
EMEA
Revenues by principal geographic area
Revenue									213,418	248,466	211,314
Other
Revenues by principal geographic area
Revenue									$ 22,138	$ 27,193	$ 27,392

- Definition

+ References

+ Details

Unaudited Quarterly Financial Data - Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Selected Quarterly Financial Results (Unaudited)
Revenue	$ 314,109	$ 305,280	$ 307,722	$ 365,451	$ 393,586	$ 373,545	$ 390,849	$ 404,357	$ 1,292,562	$ 1,562,337	$ 1,586,222
Cost of revenue (exclusive of depreciation and amortization)	254,995	234,222	241,788	292,539	314,858	295,445	303,831	310,601	1,023,544	1,224,735	1,213,403
Selling, general and administrative expenses (exclusive of depreciation and amortization)	45,879	42,837	47,014	50,374	49,678	48,347	51,162	49,677	186,104	198,864	184,908
Depreciation and amortization	25,826	22,095	22,847	23,185	24,421	25,079	24,779	26,624	93,953	100,903	138,077
Impairment of goodwill and other intangible assets					252,399	97,158				349,557	48,127
Related party expense	1,324	1,360	1,146	1,551	1,742	1,430	5,331	998	5,381	9,501	12,403
Operating loss	(13,915)	4,766	(5,073)	(2,198)	(249,512)	(93,914)	5,746	16,457	(16,420)	(321,223)	(10,696)
Other expense (income), net:
Interest expense, net	44,238	43,612	44,440	41,588	43,216	40,573	39,959	39,701	173,878	163,449	155,991
Debt modification and extinguishment costs	9,589						1,404		9,589	1,404	1,067
Sundry expense (income), net	98	(434)	(899)	1,082	(600)	165	(1,311)	2,715	(153)	969	(3,271)
Other expense (income), net	10,867	(10,414)	(584)	(34,657)	10,003	406	2,527	1,493	(34,788)	14,429	(3,030)
Net loss before income taxes	(78,707)	(27,998)	(48,030)	(10,211)	(302,131)	(135,058)	(36,833)	(27,452)	(164,946)	(501,474)	(161,453)
Income tax (expense) benefit	(10,144)	(320)	(661)	(2,459)	(1,953)	3,769	(4,738)	(4,720)	(13,584)	(7,642)	(8,353)
Net loss	(88,851)	(28,318)	(48,691)	(12,670)	(304,084)	(131,289)	(41,571)	(32,172)	(178,530)	(509,116)	(169,806)
Cumulative dividends for Series A Preferred Stock	(915)	(976)	(858)		(597)	(884)	(914)	(914)	(1,309)	(3,309)	(3,655)
Cumulative dividends for Series A Preferred Stock				1,440
Net loss attributable to common stockholders	$ (89,766)	$ (29,294)	$ (49,549)	$ (11,230)	$ (304,681)	$ (132,173)	$ (42,485)	$ (33,086)	$ (179,839)	$ (512,425)	$ (173,461)
Weighted average outstanding common shares	49,172,037	49,170,477	49,169,556	49,065,055	48,720,451	48,545,583	48,488,731	48,524,074
Earnings per share:
Basic and diluted	$ (1.82)	$ (0.60)	$ (1.01)	$ (0.23)	$ (6.27)	$ (2.72)	$ (0.88)	$ (0.68)	$ (3.66)	$ (10.55)	$ (3.52)
ITPS
Selected Quarterly Financial Results (Unaudited)
Revenue	$ 243,537	$ 234,365	$ 243,029	$ 284,112	$ 306,665	$ 292,607	$ 309,840	$ 325,172	$ 1,005,043	$ 1,234,284	$ 1,273,647
Cost of revenue (exclusive of depreciation and amortization)	200,387	183,671	195,835	235,120	250,927	241,867	249,589	259,272	815,013	1,001,655	1,010,320
HS
Selected Quarterly Financial Results (Unaudited)
Revenue	51,623	54,209	49,166	64,049	69,806	62,132	63,440	61,343	219,047	256,721	228,015
Cost of revenue (exclusive of depreciation and amortization)	39,394	39,444	36,148	44,931	53,634	42,717	43,353	40,341	159,917	180,045	151,877
LLPS
Selected Quarterly Financial Results (Unaudited)
Revenue	18,949	16,706	15,527	17,290	17,115	18,806	17,569	17,842	68,472	71,332	84,560
Cost of revenue (exclusive of depreciation and amortization)	$ 15,214	$ 11,107	$ 9,805	$ 12,488	$ 10,297	$ 10,861	$ 10,889	$ 10,988	$ 48,614	$ 43,035	$ 51,206

Subsequent Events (Details) $ / shares in Units, $ in Millions	Mar. 18, 2021 USD ($) $ / shares shares	Mar. 15, 2021 USD ($)	Jan. 26, 2021	Jan. 25, 2021 $ / shares	Dec. 31, 2020 $ / shares	Dec. 31, 2019 $ / shares
Subsequent Event [Line Items]
Common stock, par value (in dollars per share)					$ 0.0001	$ 0.0001
Exercise price of warrants					$ 34.50
Gross proceeds from offering expected \| $		$ 25.2
Subsequent Events
Subsequent Event [Line Items]
Reverse stock split			0.3333	0.3333
Common stock, par value (in dollars per share)				$ 0.0001
Common Stock bid price				$ 1.00
Consecutive trading days				30 days
Subsequent Events \| Private Placement
Subsequent Event [Line Items]
Purchase of common stock, share \| shares	9,731,819
Common stock issued price	$ 2.75
Number of warrants issued \| shares	9,731,819
Exercise price of warrants	$ 4.00
Warrants expiration term	6 months
Warrants exercisable period	5 years
Gross proceeds from offering expected \| $	$ 26.8
Subsequent Events \| 180-day grace period
Subsequent Event [Line Items]
Common Stock bid price				$ 1.00
Consecutive trading days				10 days