0001558370-21-006201 | 10-Q | XBRL Viewer

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 05, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		59,192,012
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001620179
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 22,055	$ 68,221
Restricted cash	1,683	2,088
Accounts receivable, net of allowance for doubtful accounts of $5,634 and $5,647, respectively	216,077	206,868
Related party receivables and prepaid expenses	702	711
Inventories, net	14,845	14,314
Prepaid expenses and other current assets	33,429	31,091
Total current assets	288,791	323,293
Property, plant and equipment, net of accumulated depreciation of $192,177 and $193,760, respectively	81,862	87,851
Operating lease right-of-use assets, net	66,743	68,861
Goodwill	359,309	359,781
Intangible assets, net	280,891	292,664
Deferred income tax assets	6,370	6,606
Other noncurrent assets	20,756	18,723
Total assets	1,104,722	1,157,779
Current liabilities
Accounts payable	73,666	76,027
Related party payables	124	97
Income tax payable	1,531	2,466
Accrued liabilities	122,080	126,399
Accrued compensation and benefits	62,392	63,467
Accrued interest	24,059	48,769
Customer deposits	17,648	21,277
Deferred revenue	21,182	16,377
Obligation for claim payment	28,222	29,328
Current portion of finance lease liabilities	11,143	12,231
Current portion of operating lease liabilities	17,852	18,349
Current portion of long-term debts	39,713	39,952
Total current liabilities	419,612	454,739
Long-term debt, net of current maturities	1,499,031	1,498,004
Finance lease liabilities, net of current portion	11,401	13,287
Pension liabilities, net	35,335	35,515
Deferred income tax liabilities	9,154	9,569
Long-term income tax liabilities	2,260	2,759
Operating lease liabilities, net of current portion	54,929	56,814
Other long-term liabilities	13,336	13,624
Total liabilities	2,045,058	2,084,311
Commitments and Contingencies (Note 8)
Stockholders' equity (deficit)
Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 61,643,718 shares issued and 59,192,012 shares outstanding at March 31, 2021 and 51,693,931 shares issued and 49,242,225 shares outstanding at December 31, 2020	16	15
Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; 2,779,369 shares issued and outstanding at March 31, 2021 and 3,290,050 shares issued and outstanding at December, 2020	1	1
Additional paid in capital	471,804	446,739
Less: Common Stock held in treasury, at cost; 2,451,706 shares at March 31, 2021 and December 31, 2020	(10,949)	(10,949)
Equity-based compensation	52,570	52,183
Accumulated deficit	(1,429,238)	(1,390,038)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(7,319)	(7,419)
Unrealized pension actuarial losses, net of tax	(17,221)	(17,064)
Total accumulated other comprehensive loss	(24,540)	(24,483)
Total stockholders' deficit	(940,336)	(926,532)
Total liabilities and stockholders' deficit	$ 1,104,722	$ 1,157,779

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 5,634	$ 5,647
Accumulated depreciation	$ 192,177	$ 193,760
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	61,643,718	51,693,931
Common stock, shares outstanding	59,192,012	49,242,225
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	2,779,369	3,290,050
Preferred stock, shares outstanding	2,779,369	3,290,050
Common stock held in treasury at cost (in shares)	2,451,706	2,451,706

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Operations
Revenue	$ 300,056	$ 365,451
Cost of revenue (exclusive of depreciation and amortization)	232,587	292,539
Selling, general and administrative expenses (exclusive of depreciation and amortization)	41,885	50,374
Depreciation and amortization	19,599	23,185
Related party expense	1,707	1,551
Operating profit (loss)	4,278	(2,198)
Other expense (income), net:
Interest expense, net	43,131	41,588
Sundry expense (income), net	213	1,082
Other expense (income), net	152	(34,657)
Net loss before income taxes	(39,218)	(10,211)
Income tax expense	18	(2,459)
Net loss	(39,200)	(12,670)
Cumulative dividends for Series A Preferred Stock	896	1,440
Net loss attributable to common stockholders	$ (38,304)	$ (11,230)
Loss per share - Basic and diluted (in dollars per share)	$ (0.76)	$ (0.23)

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Comprehensive Loss
Net loss	$ (39,200)	$ (12,670)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	100	920
Unrealized pension actuarial gains (losses), net of tax	(157)	504
Total other comprehensive loss, net of tax	$ (39,257)	$ (11,246)

- 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, 2019	$ 15	$ 1	$ (10,949)	$ 445,452	$ 49,336	$ (7,329)	$ (8,059)	$ (1,211,508)	$ (743,041)
Beginning balance (in shares) at Dec. 31, 2019	50,283,896	4,294,233	929,049
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(12,670)	(12,670)
Equity-based compensation					861				861
Foreign currency translation adjustment						920			920
Net realized pension actuarial gains, net of tax							504		$ 504
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares)	(1,523,578)		1,523,578						1,523,578
Preferred shares converted to common stock		(1,004,183)
Preferred shares converted to common stock (in shares)	409,238
Ending balance at Mar. 31, 2020	$ 15	$ 1	$ (10,949)	445,452	50,197	(6,409)	(7,555)	(1,224,178)	$ (753,426)
Ending balance (in shares) at Mar. 31, 2020	49,169,556	3,290,050	2,452,627
Beginning balance at Dec. 31, 2019	$ 15	$ 1	$ (10,949)	445,452	49,336	(7,329)	(8,059)	(1,211,508)	(743,041)
Beginning balance (in shares) at Dec. 31, 2019	50,283,896	4,294,233	929,049
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss									(178,500)
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
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss								(39,200)	(39,200)
Equity-based compensation					387				387
Foreign currency translation adjustment						100			100
Net realized pension actuarial gains, net of tax							(157)		(157)
Preferred shares converted to common stock		(510,681)
Preferred shares converted to common stock (in shares)	223,413
Payment for fractional shares on Reverse Stock Split				(14)					(14)
Payment for fractional shares on Reverse Stock Split (in shares)	(5,445)
Issuance of Common Stock	$ 1			25,079					$ 25,080
Issuance of Common Stock (in shares)	9,731,819
Shares repurchased (in shares)									(929,049)
Ending balance at Mar. 31, 2021	$ 16	$ 1	$ (10,949)	$ 471,804	$ 52,570	$ (7,319)	$ (17,221)	$ (1,429,238)	$ (940,336)
Ending balance (in shares) at Mar. 31, 2021	59,192,012	2,779,369	2,451,706

Consolidated Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Cash flows from operating activities
Net loss	$ (39,200)	$ (12,670)
Adjustments to reconcile net loss
Depreciation and amortization	19,599	23,185
Original issue discount and debt issuance cost amortization	3,840	3,193
Provision for doubtful accounts	50	74
Deferred income tax provision	(297)	(401)
Share-based compensation expense	387	861
Unrealized foreign currency losses	(159)	(936)
Loss (gain) on sale of assets	29	(35,246)
Fair value adjustment for interest rate swap	(125)	845
Change in operating assets and liabilities, net of effect from acquisitions
Accounts receivable	(11,248)	13,476
Prepaid expenses and other assets	(5,895)	(5,678)
Accounts payable and accrued liabilities	(30,787)	(21,420)
Related party payables	37	(568)
Additions to outsource contract costs	(156)	(88)
Net cash provided by (used in) operating activities	(63,925)	(35,373)	$ (29,800)
Cash flows from investing activities
Purchase of property, plant and equipment	(1,609)	(3,591)
Additions to internally developed software	(672)	(1,153)
Cash paid for acquisition, net of cash received		(3,500)
Proceeds from sale of assets		38,222
Net cash provided by (used in) investing activities	(2,281)	29,978
Cash flows from financing activities
Proceeds from issuance of stock	25,065
Borrowings under factoring arrangement and Securitization Facilities	32,432	131,591
Principal repayment on borrowings under factoring arrangement and Securitization Facilities	(31,533)	(23,042)
Lease terminations	(16)	(14)
Cash paid for debt issuance costs		(2,908)
Principal payments on finance lease obligations	(3,029)	(3,187)
Borrowings from senior secured revolving facility	3,000	29,750
Repayments on senior secured revolving facility		(14,000)
Borrowings from other loans	1,959	11,241
Principal repayments on senior secured term loans and other loans	(8,142)	(15,343)
Net cash provided by (used in) financing activities	19,736	114,088
Effect of exchange rates on cash	(101)	(216)
Net decrease in cash and cash equivalents	(46,571)	108,477
Cash, restricted cash, and cash equivalents
Beginning of period	70,309	14,099	14,099
End of period	23,738	122,576	$ 70,309
Supplemental cash flow data:
Income tax payments, net of refunds received	1,510	623
Interest paid	62,510	61,852
Noncash investing and financing activities:
Assets acquired through right-of-use arrangements	220	270
Accrued capital expenditures	$ 1,617	$ 1,565

General

3 Months Ended

Mar. 31, 2021

General

General

1. General

These condensed consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements as of and for the year ended December 31, 2020 included in the Exela Technologies, Inc. (the "Company," "Exela," "we," "our" or "us") annual report on Form 10-K for such period (the “2020 Form 10-K”).

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

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

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:

●

history of net losses of $39.2 million for the three months ended March 31, 2021 and $178.5 million for the year ended December 31, 2020. 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 its physical record storage and logistics business each recognized for the year ended December 31, 2020;

●

net operating cash outflows of $63.9 million for the three months ended March 31, 2021 and $29.8 million for the year ended December 31, 2020;

●

working capital deficits of $130.8 million and $131.4 million as of March 31, 2021 and December 31, 2020, respectively;

●

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 $61.7 million for the Appraisal Action (as defined in and as described further in Note 8);

●

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

●

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

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 May 3, 2021, the Company had $51.0 million of liquidity, comprised of available cash of $31.2 million and availability under borrowing facilities of $19.8 million. This does not take into account an add back for certain fees, costs and expenses incurred by the Company relating to the Credit Agreement and the receivables financings, which was approximately $22.8 million as of May 3, 2021, that is used to calculate minimum liquidity in accordance with the terms of 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:

●

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.

●

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 could 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.

●

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.

●

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.

●

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 $22.8 million.

●

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.

●

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.

●

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.

●

In February 2021, the Company decided to close a European production facility. This initiative is expected to result in annual cost savings of $5.0 million.

●

On March 18, 2021, the Company completed a private placement of Common Stock (as defined below) 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 due to late delivery of financial statements for the fiscal year ended December 31, 2019 and for the quarter ended March 31, 2020, that have been cured. However, despite these conditions, the Company believes management’s plans and actions to date, as described above, will provide sufficient liquidity to meet its financial obligations and further, maintain levels of liquidity as specifically required under the Credit Agreement. 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, provides for 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. 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 8, the petitioners in the Appraisal Action have filed additional actions to recognize the judgment against SourceHOV, which is a subsidiary without liquid 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.

Net Loss per Share

Earnings per share (“EPS”) is computed by dividing net loss available to holders of the Company’s common stock, par value $0.0001 per share (“Common Stock”) by the weighted average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method and the 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 March 31, 2021, the outstanding shares of the Company’s Series A Preferred Stock, if converted would have resulted in an additional 1,215,924 shares of Common Stock outstanding, however, they were not included in the computation of diluted loss per share as their effects were anti-dilutive (i.e., reduces the net loss per share).

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 also did not include the effect of 35,000,000 warrants sold in the Quinpario Initial Public Offering (“IPO”), the effect of 9,731,819 warrants sold in a private placement of securities on March 18, 2021 or the effect of the aggregate number of shares issuable pursuant to outstanding restricted stock units and options of 2,278,365 and 1,722,668 as of March 31, 2021 and 2020, respectively, in the calculation of diluted loss per share for the three months ended March 31, 2021 and 2020, because their effects were anti-dilutive.


	Three Months Ended March 31,
	2021		2020
Net loss attributable to common stockholders (A)	$	(38,304)	$	(11,230)
Weighted average common shares outstanding - basic and diluted (B)		50,646,482		49,065,055
Loss Per Share:
Basic and diluted (A/B)	$	(0.76)	$	(0.23)

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 which became treasury stock.

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 condensed consolidated statements of operations for the three months ended March 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.

Impact of COVID-19

The coronavirus pandemic (“COVID-19”) continues to expose our global operations to risks. COVID-19 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 have 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. We have been performing and delivering all of our essential services out of our facilities and delivery centers. Most of our customer site employees (onsite) continue to perform the work and take directions from our customers. A part of our non-essential services related 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 reliably predict. Management continues to actively monitor the global situation and its impact on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce. Overall, in light of the changing nature and continuing uncertainty around the COVID-19 pandemic, our ability to fully estimate the impact of COVID-19 on our results of operations, financial condition, or liquidity in future periods remains limited. Shifts in our customers’ priorities and changes to the transaction types offered are still evolving and the dynamic situation hinders reliable forecasting. The effects of the pandemic on our business are unlikely to be fully realized, or reflected in our financial results, until future periods.

New Accounting Pronouncements

3 Months Ended

Mar. 31, 2021

New Accounting Pronouncements

New Accounting Pronouncements

2. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective January 1, 2021, the Company adopted Accounting Standards Update (“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 adoption had no material impact on the Company's consolidated results of operations, cash flows, financial position or disclosures.

Recently Issued Accounting Pronouncements

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.

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”, is 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.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies

Significant accounting policies

3. Significant Accounting Policies

The information presented below supplements the Significant Accounting Policies information presented in our 2020 Form 10-K.

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

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021								2020
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	172,924	$	51,093	$	17,088	$	241,105	$	223,326	$	64,049	$	17,290	$	304,665
EMEA		54,209		—		—		54,209		53,906		—		—		53,906
Other		4,742		—		—		4,742		6,880		—		—		6,880
Total	$	231,875	$	51,093	$	17,088	$	300,056	$	284,112	$	64,049	$	17,290	$	365,451

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2021 and December 31, 2020:


	March 31, 2021		December 31, 2020
Accounts receivable, net	$	216,077	$	206,868
Deferred revenues		21,413		16,919
Customer deposits		17,648		21,277
Costs to obtain and fulfill a contract		3,018		3,295

Accounts receivable, net includes $25.4 million and $23.2 million as of March 31, 2021 and December 31, 2020, respectively, representing amounts not yet 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 $6.6 million during the three months ended March 31, 2021 that had been deferred as of December 31, 2020.

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 $0.4 million of amortization for these costs for the three months ended March 31, 2021 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 March 31, 2021 in each of the future periods below:


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2021	$	40,880
2022		37,579
2023		31,854
2024		28,416
2025		27,757
2026 and thereafter		306
Total	$	166,792

Intangibles Assets and Goodwill

3 Months Ended

Mar. 31, 2021

Intangibles Assets and Goodwill

Intangibles Assets and Goodwill

4. Intangibles Assets and Goodwill

Intangible Assets

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


	March 31, 2021
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	508,396	$	(287,749)	$	220,647
Developed technology		88,553		(87,236)		1,317
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		16,447		(13,429)		3,018
Internally developed software		47,878		(21,963)		25,915
Assembled workforce		4,473		(2,516)		1,957
Purchased software		26,749		(4,012)		22,737
Intangibles, net	$	700,896	$	(420,005)	$	280,891


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

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

(b)	The carrying amount of trade names for 2021 and 2020 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at March 31, 2021 represents indefinite-lived intangible asset.

Goodwill

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with its clients. The Company is organized into three segments: Information & Transaction Processing Solutions (“ITPS”), Healthcare Solutions (“HS”), and Legal & Loss Prevention Services (“LLPS”) (See Note 13).

Goodwill by reporting segment consists of the following:




	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

	Balances as at January 1, 2021 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at March 31, 2021 (a)
ITPS	$	254,130	$	—	$	—	$	(472)	$	253,658
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Total	$	359,781	$	—	$	—	$	(472)	$	359,309

(a)

The goodwill amount for all periods presented is net of accumulated impairment amount as at December 31, 2019. Accumulated impairment is $317.5 million and $243.4 relating to ITPS and LLPS, respectively, as at December 31, 2019 and March 31, 2021.

Long-Term Debt and Credit Facilities

3 Months Ended

Mar. 31, 2021

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

5. Long-Term Debt and Credit Facilities

Senior Secured Notes

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

Senior Credit Facilities

On July 12, 2017, the Company entered into a First Lien Credit Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch and KKR Corporate Lending LLC providing Exela Intermediate LLC, a wholly owned subsidiary of the Company, upon the terms and subject to the conditions set forth in the Credit Agreement, (i) a $350.0 million senior secured term loan maturing July 12, 2023 with an original issue discount (“OID”) of $7.0 million, and (ii) a $100.0 million senior secured revolving facility maturing July 12, 2022. As of March 31, 2021 and December 31, 2020, the Company had outstanding irrevocable letters of credit totaling approximately $16.5 million and $19.5 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 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 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. The Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Repricing Term Loans and prior senior secured term 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.

2019 Incremental Term Loan

On April 16, 2019, the Company 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 mature on July 12, 2023, the same maturity date as the Incremental Term Loans, Repricing Term Loans and prior senior secured term loans.

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 within the time frames stated therein (which the Company satisfied during the month of June 2020), the Company became in compliance with respect to the financial statement delivery requirements set forth in the Credit Agreement. 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.

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 March 31, 2021, there were borrowings of $91.9 million outstanding under the Securitization Facility.

Long-Term Debt Outstanding

As of March 31, 2021 and December 31, 2020, the following long-term debt instruments were outstanding:


	March 31,		December 31,
	2021		2020
Other (a)	$	37,199		37,653
Term loan under first lien credit agreement (b)		340,482		343,597
Senior secured notes (c)		985,573		984,216
Secured borrowings under Securitization Facility		91,947		91,947
Revolver		83,543		80,543
Total debt		1,538,744		1,537,956
Less: Current portion of long-term debt		(39,713)		(39,952)
Long-term debt, net of current maturities	$	1,499,031	$	1,498,004

(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 $4.3 million and $15.5 million as of March 31, 2021 and $4.8 million and $17.1 million as of December 31, 2020.

(c)	Net of unamortized debt discount and debt issuance costs of $10.3 million and $4.1 million as of March 31, 2021 and $11.3 million and $4.5 million as of December 31, 2020.

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Taxes

Income Taxes

6. Income Taxes

The Company applies an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods, as required under GAAP. The Company recorded an income tax benefit of less than $0.1 million and income tax expense of $2.5 million for the three months ended March 31, 2021 and 2020, respectively.

The Company's ETR of 0.05% for the three months ended March 31, 2021 differed from the expected U.S. statutory tax rate of 21.0% and was primarily impacted by permanent tax adjustments, state and local current expense,

foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s deferred tax assets on U.S. disallowed interest expense carryforwards created by the provisions of The Tax Cuts and Jobs Act (“TCJA”).

For the three months ended March 31, 2020, the Company’s ETR of (24.1%) differed from the expected U.S. statutory tax rate of 21.0%, and was primarily impacted by permanent tax adjustments, state and local current expense, foreign operations, and valuation allowances, including valuation allowances on a portion of the Company’s U.S. disallowed interest expense carryforwards created by the provisions of the TCJA.

As of March 31, 2021, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2020.

- 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

3 Months Ended

Mar. 31, 2021

Employee Benefit Plans

Employee Benefit Plans

7. Employee Benefit Plans

German Pension Plan

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

U.K. Pension Plan

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

Norway Pension Plan

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

Asterion Pension Plan

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

Tax Effect on Accumulated Other Comprehensive Loss

As of March 31, 2021 and December 31, 2020 the Company recorded actuarial losses of $17.2 million and $17.1 million in accumulated other comprehensive loss on the condensed consolidated balance sheets, respectively, which is net of a deferred tax benefit of $2.0 million for each period.

Pension Expense

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


	Three Months Ended March 31,
	2021		2020
Service cost	$	19	$	19
Interest cost		424		498
Expected return on plan assets		(605)		(644)
Amortization:
Amortization of prior service cost		45		26
Amortization of net loss		838		432
Net periodic benefit cost	$	721	$	331

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

Employer Contributions

The Company’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $0.9 million and $0.6 million to its pension plans during the three months ended March 31, 2021 and 2020, respectively. The Company has funded the pension plans with the required contributions for 2021 based on current plan provisions.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

Appraisal Action

On September 21, 2017, former stockholders of SourceHOV Holdings, Inc. (“SourceHOV”), who owned 10,304 shares of SourceHOV common stock, filed a petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery (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 paid $1.0 million toward 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 sought a court order to force Exela to set aside sufficient assets for SourceHOV to pay the potential judgment in the derivative action prior to paying other creditors or, in the alternative, to pay all creditors, including the creditors of SourceHOV, on a pari passu basis. The Delaware Court of Chancery denied the motion seeking the preliminary injunction on April 29, 2021. 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, LLC (“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 March 31, 2021, the Company has an accrued liability of $61.7 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 obligation as of such date.

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 in excess of €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. 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 has an accrued liability of $9.2 million for this matter as of March 31, 2021.

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

3 Months Ended

Mar. 31, 2021

Fair Value Measurement

Fair Value Measurement

9. Fair Value Measurement

Assets and Liabilities Measured at Fair Value

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of March 31, 2021, and December 31, 2020, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan and secured notes at approximately 39.0% and 35.5% respectively, of the respective principal balance outstanding as of March 31, 2021. The fair values of secured borrowings under the Company’s securitization facility and senior secured revolving credit facility are equal to the respective carrying values. Other debt represents the Company's 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 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 used closing prices as provided by a third party institution.

The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of March 31, 2021, and December 31, 2020:


	Carrying		Fair		Fair Value Measurements
As of March 31, 2021	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,499,031	$	668,483	$	—	$	668,483	$	—
Nonrecurring assets and liabilities:
Goodwill		359,309		359,309		—		—		359,309


	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

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

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


	March 31,		December 31,
	2021		2020
Balance as of Beginning of Period	$	300	$	721
Earn-out Adjustment		—		279
Payments		(300)		(700)
Balance as of End of Period	$	—	$	300

- Definition

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

+ References + Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

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 three months ended March 31, 2021 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, 2020	26,455	$	3.78	0.91	$	50
Granted	676,677		2.71
Forfeited	—		—
Vested	—		—
Outstanding Balance as of March 31, 2021	703,132	$	2.75	0.88	$	1,934

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 three months ended March 31, 2021 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, 2020	1,635,700	$	5.67	$	11.89	1.42	$	—
Granted	—		—
Exercised	—		—
Forfeited	(60,467)		5.72
Expired	—		—
Outstanding Balance as of March 31, 2021 (1)	1,575,233	$	5.67	$	11.89	1.22	$	—

(1) 364,680 of the outstanding options are exercisable as of March 31, 2021.

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

As of March 31, 2021, there was approximately $4.0 million of total unrecognized compensation expense related to non-vested awards for the 2018 Plan, which will be recognized over the respective service period. Stock-based compensation expense is recorded within Selling, general, and administrative expenses. The Company incurred total compensation expense of $0.4 million and $0.9 million related to plan awards for the three months ended March 31, 2021 and 2020, respectively.

Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Stockholders' Equity

Stockholders' Equity

11. Stockholders’ Equity

The following description summarizes the material terms and provisions of the securities that the Company has authorized.

Common Stock

The Company is authorized to issue 1,600,000,000 shares of Common Stock. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock or as provided for in the Director Nomination Agreement to which the Company is party, 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 the three months ended March 31, 2021, 510,681 shares of Series A Preferred Stock were converted into 223,413 shares of Common Stock. As of March 31, 2021 and December 31, 2020, there were 59,192,012 and 49,242,225 shares outstanding, respectively.

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. 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 at December 31, 2020.

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 March 31, 2021, after taking into account the effect of the Reverse Stock Split, each outstanding share of Series A Preferred Stock was convertible into 0.4375 shares of Common Stock using this conversion formula. Accordingly, as of March 31, 2021, 1,215,924 shares of Common Stock were issuable upon conversion of the remaining 2,779,369 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 gross dividend accumulation for the three months ended March 31, 2021 was $0.9 million. However, as a result of 510,681 shares of Series A Preferred Stock being converted into 223,413 shares of Common Stock during the first quarter of 2021, accumulated dividend of $1.8 million was reversed, resulting in a net reduction of dividend accumulation of $0.9 million for the three months ended March 31, 2021. Similarly, the gross dividend accumulation for the three months ended March 31, 2020 was $0.9 million. However, as a result of 1,004,183 shares of Series A Preferred Stock being converted into 409,238 shares of Common Stock during the first quarter of 2020, accumulated dividend of $2.3 million was reversed, resulting in a net reduction of dividend accumulation of $1.4 million for the three months ended March 31, 2020. As of March 31, 2021, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 is $9.9 million. The per share average of cumulative preferred dividends for the three months ended March 31, 2021 and 2020 is $(0.3) and $(0.4), respectively.

Following the third anniversary of the issue date, dividends on the Series A Preferred Stock will be accrued by adding to the Liquidation Preference or paid in cash, or a combination thereof. In addition, holders of the Series A Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution.

Treasury Stock

On November 8, 2017, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company was permitted to purchase up to 1,666,667 shares of Common Stock. The Share Buyback Program has expired. As of March 31, 2021, 929,049 shares had been repurchased under the Share Buyback Program and they are held as 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 March 31, 2021, there were warrants outstanding to purchase 15,565,152 shares of our Common Stock, consisting of 35,000,000 warrants to purchase one-sixth of one share outstanding from our 2015 IPO and 9,731,819 warrants to purchase one share from the private placement that was completed in March 2021.

IPO Warrants

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 March 31, 2021.

Each IPO 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). IPO 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 IPO 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 IPO 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.

Private Placement of Unregistered Shares and Warrants

On March 15, 2021, the Company, entered into a securities purchase agreement with certain accredited institutional investors pursuant to which the Company issued and sold to the ten accredited institutional investors in a private placement an aggregate of 9,731,819 unregistered shares of the Company’s Common Stock at a price of $2.75 per share and an equal number of warrants, generating gross proceeds to the Company of $26.8 million. Cantor Fitzgerald acted as underwriter in connection with such sale of unregistered securities and received a placement fee of 5.5% of gross proceeds in connection with such service. In selling the shares without registration, the Company relied on exemptions from registration available under Section 4(a)(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. The shares of Common Stock sold together with these warrants are included in the Company’s calculation of total shares outstanding. The Company filed a registration statement on Form S-3 on May 3, 2021 to register these shares and the shares underlying these private placement warrants.

Each private placement warrant entitles the holder to purchase one share of Common Stock, will be exercisable at an exercise price of $4.00 per share beginning on September 19, 2021 and will expire on September 19, 2026. The private placement warrants are not traded as of March 31, 2021 and are not subject to redemption by the Company.

Related-Party Transactions

3 Months Ended

Mar. 31, 2021

Related-Party Transactions

Related-Party Transactions

12. Related-Party Transactions

Relationship with HandsOn Global Management

The Company incurred reimbursable travel expenses to HOVS LLC and HandsOn Fund 4 I, LLC (collectively, together with certain affiliated entities controlled by HandsOn Global Management LLC, “HGM”) of less than $0.1 million for each of the three months ended March 31, 2021 and 2020. As of March 31, 2021, HGM beneficially owned approximately 40% of the Company’s Common Stock, including shares controlled pursuant to voting agreements (as described below) and shares issuable upon conversion of Series A Preferred Stock.

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 $1.1 million and less than $0.4 million for the three months ended March 31, 2021 and 2020, respectively.

Certain operating companies lease their operating facilities from HOV RE, LLC and HOV Services Limited, which are affiliates under common control with HGM. The rental expense for these operating leases was less than $0.1 million for each of the three months ended March 31, 2021 and 2020. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $0.3

million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively. These expenses are included in cost of revenue in the consolidated statements of operations.

The Company determined it is obligated to reimburse certain reimbursable expenses incurred by Ex-Sigma 2, the former majority shareholder of the Company, under the terms of the Consent, Waiver and Amendment dated June 15, 2017, by and among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., SourceHOV, Novitex, Novitex Parent, L.P., Ex Sigma LLC (“Ex-Sigma”), HOVS LLC and HandsOn Fund 4 I, LLC, amending the Novitex Business Combination agreement (the “Consent, Waiver and Amendment”). The Company incurred reimbursable expenses to Ex-Sigma 2 of $0.2 million for the three months ended March 31, 2020 in connection with legal expenses of Ex-Sigma 2. There were no such reimbursable expenses incurred during the three months ended March 31, 2021. Ex-Sigma 2 distributed the shares held by it during the first quarter of 2020 and is no longer a shareholder of Exela. Many recipients of these shares have entered into voting agreements in respect of those shares with HGM.

Consulting Agreement

The Company receives services from Oakana Holdings, Inc. The Company and Oakana Holdings, Inc. are related through a family relationship between certain shareholders and the president of Oakana Holdings, Inc. The expense recognized for these services was less than $0.1 million for each of the three months ended March 31, 2021 and 2020, 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 provided printer supplies and maintenance services, including toner maintenance, training, quarterly business review and printer procurement. The Company recognized revenue of less than $0.1 million under this agreement for the three months ended March 31, 2020 in its 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 provided the Company with employees, subcontractors, and/or goods and services. For the three months ended March 31, 2020 there were related party expenses of $0.2 million.

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 provided managed print services to Caesars, including general equipment operation, supply management, support services and technical support. The Company recognized revenue of $0.9 million for the three months ended March 31, 2020 in its consolidated statements of operations.

On May 5, 2017, one of the Company’s subsidiaries entered into a master services agreement with ADT LLC. ADT LLC is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, the Company provided 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 under this master services agreement for the three months ended March 31, 2020 in its consolidated statements of operations.

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

Payable and Receivable/Prepayment Balances with Affiliates

Payable and receivable/prepayment balances with affiliates as of March 31, 2021 and December 31, 2020 are as follows below.



	March 31, 2021				December 31, 2020
	Receivables and Prepaid Expenses		Payables		Receivables and Prepaid Expenses		Payables
HOV Services, Ltd	$	702	$	—	$	711	$	—
Rule 14		—		80		—		44
HGM		—		43		—		52
Oakana		—		1		—		1
	$	702	$	124	$	711	$	97

Segment and Geographic Area Information

3 Months Ended

Mar. 31, 2021

Segment and Geographic Area Information

Segment and Geographic Area Information

13. Segment and Geographic Area Information

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

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

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

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

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


		Three months ended March 31, 2021
	ITPS		HS		LLPS		Total
Revenue	$	231,875	$	51,093	$	17,088	$	300,056
Cost of revenue (exclusive of depreciation and amortization)		185,502		35,818		11,267		232,587
Segment profit		46,373		15,275		5,821		67,469
Selling, general and administrative expenses (exclusive of depreciation and amortization)								41,885
Depreciation and amortization								19,599
Related party expense								1,707
Interest expense, net								43,131
Sundry expense, net								213
Other expense, net								152
Net loss before income taxes							$	(39,218)


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

- 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
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+ Details

Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events

Subsequent Events

14. Subsequent Events

The Company has evaluated all events that occur after the balance sheet date through the date when these condensed consolidated financial statements were issued to determine if they must be reported. On April 11, 2021, the Company amended the Securitization Loan Agreement and agreed to, among other things, extend the option to access approximately $53.0 million in additional borrowings from April 10, 2021 to September 30, 2021 upon the contribution of inventory and intellectual property to support the borrowing base.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies

Revenue Recognition

Revenue Recognition

Nature of Services

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region and by segment for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021								2020
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	172,924	$	51,093	$	17,088	$	241,105	$	223,326	$	64,049	$	17,290	$	304,665
EMEA		54,209		—		—		54,209		53,906		—		—		53,906
Other		4,742		—		—		4,742		6,880		—		—		6,880
Total	$	231,875	$	51,093	$	17,088	$	300,056	$	284,112	$	64,049	$	17,290	$	365,451

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at March 31, 2021 and December 31, 2020:


	March 31, 2021		December 31, 2020
Accounts receivable, net	$	216,077	$	206,868
Deferred revenues		21,413		16,919
Customer deposits		17,648		21,277
Costs to obtain and fulfill a contract		3,018		3,295

Performance Obligations

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

Transaction Price Allocated to the Remaining Performance Obligations


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2021	$	40,880
2022		37,579
2023		31,854
2024		28,416
2025		27,757
2026 and thereafter		306
Total	$	166,792

- Definition

Disclosure of accounting policy for revenue from contract with customer.

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+ Details

General (Tables)

3 Months Ended

Mar. 31, 2021

General

Schedule of components of basic and diluted EPS


	Three Months Ended March 31,
	2021		2020
Net loss attributable to common stockholders (A)	$	(38,304)	$	(11,230)
Weighted average common shares outstanding - basic and diluted (B)		50,646,482		49,065,055
Loss Per Share:
Basic and diluted (A/B)	$	(0.76)	$	(0.23)

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies

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


	Three Months Ended March 31,
	2021								2020
		ITPS		HS		LLPS		Total		ITPS		HS		LLPS		Total
U.S.A.	$	172,924	$	51,093	$	17,088	$	241,105	$	223,326	$	64,049	$	17,290	$	304,665
EMEA		54,209		—		—		54,209		53,906		—		—		53,906
Other		4,742		—		—		4,742		6,880		—		—		6,880
Total	$	231,875	$	51,093	$	17,088	$	300,056	$	284,112	$	64,049	$	17,290	$	365,451

Schedule of contract balances


	March 31, 2021		December 31, 2020
Accounts receivable, net	$	216,077	$	206,868
Deferred revenues		21,413		16,919
Customer deposits		17,648		21,277
Costs to obtain and fulfill a contract		3,018		3,295

Schedule of estimated remaining fixed consideration for unsatisfied performance obligations


Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations

Remainder of 2021	$	40,880
2022		37,579
2023		31,854
2024		28,416
2025		27,757
2026 and thereafter		306
Total	$	166,792

Intangibles Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2021

Intangibles Assets and Goodwill

Schedule of intangible assets


	March 31, 2021
	Gross Carrying		Accumulated		Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	508,396	$	(287,749)	$	220,647
Developed technology		88,553		(87,236)		1,317
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		16,447		(13,429)		3,018
Internally developed software		47,878		(21,963)		25,915
Assembled workforce		4,473		(2,516)		1,957
Purchased software		26,749		(4,012)		22,737
Intangibles, net	$	700,896	$	(420,005)	$	280,891


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

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

(b)	The carrying amount of trade names for 2021 and 2020 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at March 31, 2021 represents indefinite-lived intangible asset.

Schedule of goodwill by reporting segment




	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

	Balances as at January 1, 2021 (a)			Additions		Impairments		Currency Translation Adjustments		Balances as at March 31, 2021 (a)
ITPS	$	254,130	$	—	$	—	$	(472)	$	253,658
HS		86,786		—		—		—		86,786
LLPS		18,865		—		—		—		18,865
Total	$	359,781	$	—	$	—	$	(472)	$	359,309

(a)

Long-Term Debt and Credit Facilities (Tables)

3 Months Ended

Mar. 31, 2021

Long-Term Debt and Credit Facilities

Schedule of outstanding long-term debt instruments


	March 31,		December 31,
	2021		2020
Other (a)	$	37,199		37,653
Term loan under first lien credit agreement (b)		340,482		343,597
Senior secured notes (c)		985,573		984,216
Secured borrowings under Securitization Facility		91,947		91,947
Revolver		83,543		80,543
Total debt		1,538,744		1,537,956
Less: Current portion of long-term debt		(39,713)		(39,952)
Long-term debt, net of current maturities	$	1,499,031	$	1,498,004

(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 $4.3 million and $15.5 million as of March 31, 2021 and $4.8 million and $17.1 million as of December 31, 2020.

(c)	Net of unamortized debt discount and debt issuance costs of $10.3 million and $4.1 million as of March 31, 2021 and $11.3 million and $4.5 million as of December 31, 2020.

- 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.

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+ Details

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2021

Employee Benefit Plans

Schedule of components of the net periodic benefit cost


	Three Months Ended March 31,
	2021		2020
Service cost	$	19	$	19
Interest cost		424		498
Expected return on plan assets		(605)		(644)
Amortization:
Amortization of prior service cost		45		26
Amortization of net loss		838		432
Net periodic benefit cost	$	721	$	331

Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Measurement

Schedule of fair value of financial instruments


	Carrying		Fair		Fair Value Measurements
As of March 31, 2021	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,499,031	$	668,483	$	—	$	668,483	$	—
Nonrecurring assets and liabilities:
Goodwill		359,309		359,309		—		—		359,309


	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

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


	March 31,		December 31,
	2021		2020
Balance as of Beginning of Period	$	300	$	721
Earn-out Adjustment		—		279
Payments		(300)		(700)
Balance as of End of Period	$	—	$	300

- Definition

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

+ References + Details

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

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, 2020	26,455	$	3.78	0.91	$	50
Granted	676,677		2.71
Forfeited	—		—
Vested	—		—
Outstanding Balance as of March 31, 2021	703,132	$	2.75	0.88	$	1,934

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, 2020	1,635,700	$	5.67	$	11.89	1.42	$	—
Granted	—		—
Exercised	—		—
Forfeited	(60,467)		5.72
Expired	—		—
Outstanding Balance as of March 31, 2021 (1)	1,575,233	$	5.67	$	11.89	1.22	$	—

(1) 364,680 of the outstanding options are exercisable as of March 31, 2021.

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

Related-Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related-Party Transactions

Schedule of payable and receivable balances with affiliates



	March 31, 2021				December 31, 2020
	Receivables and Prepaid Expenses		Payables		Receivables and Prepaid Expenses		Payables
HOV Services, Ltd	$	702	$	—	$	711	$	—
Rule 14		—		80		—		44
HGM		—		43		—		52
Oakana		—		1		—		1
	$	702	$	124	$	711	$	97

Segment and Geographic Area Information (Tables)

3 Months Ended

Mar. 31, 2021

Segment and Geographic Area Information

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


		Three months ended March 31, 2021
	ITPS		HS		LLPS		Total
Revenue	$	231,875	$	51,093	$	17,088	$	300,056
Cost of revenue (exclusive of depreciation and amortization)		185,502		35,818		11,267		232,587
Segment profit		46,373		15,275		5,821		67,469
Selling, general and administrative expenses (exclusive of depreciation and amortization)								41,885
Depreciation and amortization								19,599
Related party expense								1,707
Interest expense, net								43,131
Sundry expense, net								213
Other expense, net								152
Net loss before income taxes							$	(39,218)


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

General - Going Concern (Details)							1 Months Ended		3 Months Ended		12 Months Ended
General - Going Concern (Details)	Mar. 15, 2021 USD ($)	Dec. 17, 2020 USD ($)	Jul. 22, 2020 USD ($)	Mar. 27, 2020 USD ($) installment	Mar. 16, 2020 USD ($)	Jan. 10, 2020 USD ($)	Feb. 28, 2021 USD ($)	Dec. 31, 2020 USD ($) facility	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	May 01, 2021 USD ($)	May 18, 2020 USD ($)
Net loss									$ 39,200,000	$ 12,670,000		$ 178,500,000
Net operating cash outflow									63,925,000	35,373,000		29,800,000
Working capital deficit								$ 131,400,000	130,800,000			131,400,000
Cash payments for interest												152,700,000
Accrued liability									61,700,000
Liquidity													$ 51,000,000.0
Cash and cash equivalents								$ 68,221,000	22,055,000			68,221,000	31,200,000
Borrowing facility													19,800,000
Receivable Financing													$ 22,800,000
Outstanding borrowings under the facility						$ 0
Employer side social security payments				$ 27,900,000
Number of installments \| installment				2
Number of production facilities \| facility								1
Expected cost saving							$ 5,000,000.0	$ 32,500,000
Net proceeds of private placement	$ 25,200,000
Forecast
Cash payments for interest											$ 144,500,000
A/R Facility
Minimum Liquidity									35,000,000.0
Amount of facility						$ 160,000,000.0
Facility term (years)						5 years
Outstanding borrowings under the facility		$ 83,000,000.0
Credit Agreement
Minimum Liquidity														$ 35,000,000.0
Receivable Financing														$ 22,800,000
Securitization Facility
Available facility amount		$ 145,000,000.0
Facility term (years)		5 years
Initial funding supported by receivables		$ 92,000,000.0
Further funding supported by inventory and intellectual property		$ 53,000,000.0
Outstanding borrowings under the facility									91,900,000
Securitization Facility Accounts Receivable Portion [Member]
Borrowing facility									92,000,000.0
Securitization Facility Inventory And Intellectual Porperty Portion [Member]
Borrowing facility									$ 53,000,000.0
SourceHOV
Gain on sale of investments										35,500,000		35,500,000
Membership interests					$ 40,000,000.0
Adjustment of purchase consideration					$ 2,000,000.0					$ 2,000,000.0
Disposed of by sale not discontinued operations \| Physical Records Storage Business
Gain on sale of investments												$ 8,700,000
Proceeds from sale of business			$ 12,300,000

General - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 18, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Net loss per share
Common Stock, par value (in dollars per share)		$ 0.0001		$ 0.0001
Anti dilutive shares		2,278,365	1,722,668
Net loss attributable to common stockholders		$ (38,304)	$ (11,230)
Weighted average common shares outstanding - basic and diluted		50,646,482	49,065,055
Loss per share - Basic and diluted (in dollars per share)		$ (0.76)	$ (0.23)
Common stock, shares returned			1,523,578
Series A Preferred Stock
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share		1,215,924
Warrants
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share		35,000,000
Warrants \| Private Placement
Net loss per share
Number of anti-dilutive shares excluded from computation of diluted loss per share	9,731,819

General - Sale of Non-Core Assets (Details) - USD ($) $ in Millions			3 Months Ended	12 Months Ended
	Jul. 22, 2020	Mar. 16, 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
Proceeds from sale of business	$ 12.3

Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenues
Revenue	$ 300,056	$ 365,451
United States
Disaggregation of Revenues
Revenue	241,105	304,665
EMEA
Disaggregation of Revenues
Revenue	54,209	53,906
Other
Disaggregation of Revenues
Revenue	4,742	6,880
ITPS
Disaggregation of Revenues
Revenue	231,875	284,112
ITPS \| United States
Disaggregation of Revenues
Revenue	172,924	223,326
ITPS \| EMEA
Disaggregation of Revenues
Revenue	54,209	53,906
ITPS \| Other
Disaggregation of Revenues
Revenue	4,742	6,880
HS
Disaggregation of Revenues
Revenue	51,093	64,049
HS \| United States
Disaggregation of Revenues
Revenue	51,093	64,049
LLPS
Disaggregation of Revenues
Revenue	17,088	17,290
LLPS \| United States
Disaggregation of Revenues
Revenue	$ 17,088	$ 17,290

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: 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 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-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 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: 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 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Significant Accounting Policies
Accounts receivable, net	$ 216,077	$ 206,868
Deferred revenues	21,413	16,919
Customer deposits	17,648	21,277
Costs to obtain and fulfill a contract	3,018	3,295
Unbilled receivables, net	25,400	$ 23,200
Revenue recognized from deferred revenue	6,600
Amortization of contract costs	$ 400
Practical expedient on incremental costs of obtaining contracts	false

Significant Accounting Policies - Performance Obligations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Significant Accounting Policies
Contracts with an original expected length	false
Remainder of 2021	$ 40,880
2022	37,579
2023	31,854
2024	28,416
2025	27,757
2026 and thereafter	306
Total	$ 166,792

Intangibles Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Intangibles
Gross Carrying Amount	$ 700,896	$ 700,173
Amortization	(420,005)	(407,509)
Intangible Asset, net	280,891	292,664
Carrying amount of indefinite-lived trade names which are not amortizable	5,300
Customer relationships
Intangibles
Gross Carrying Amount	508,396	508,485
Amortization	(287,749)	(278,306)
Intangible Asset, net	220,647	230,179
Developed technology
Intangibles
Gross Carrying Amount	88,553	88,553
Amortization	(87,236)	(87,111)
Intangible Asset, net	1,317	1,442
Trade names
Intangibles
Gross Carrying Amount	8,400	8,400
Amortization	(3,100)	(3,100)
Intangible Asset, net	5,300	5,300
Accumulated impairment losses	44,100
Outsource contract costs
Intangibles
Gross Carrying Amount	16,447	16,331
Amortization	(13,429)	(13,036)
Intangible Asset, net	3,018	3,295
Internally developed software
Intangibles
Gross Carrying Amount	47,878	47,182
Amortization	(21,963)	(20,152)
Intangible Asset, net	25,915	27,030
Assembled workforce
Intangibles
Gross Carrying Amount	4,473	4,473
Amortization	(2,516)	(2,237)
Intangible Asset, net	1,957	2,236
Purchased software
Intangibles
Gross Carrying Amount	26,749	26,749
Amortization	(4,012)	(3,567)
Intangible Asset, net	$ 22,737	$ 23,182

Intangibles Assets and Goodwill - Goodwill (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Goodwill
Number of segments \| segment	3
Beginning of Year Balance	$ 359,781	$ 359,771
Currency Translation Adjustments	(472)	10
End of Year Balance	359,309	359,781
ITPS
Goodwill
Beginning of Year Balance	254,130	254,120
Currency Translation Adjustments	(472)	10
End of Year Balance	253,658	254,130
Accumulated impairment losses	317,500		$ 317,500
HS
Goodwill
Beginning of Year Balance	86,786	86,786
End of Year Balance	86,786	86,786
LLPS
Goodwill
Beginning of Year Balance	18,865	18,865
End of Year Balance	18,865	$ 18,865
Accumulated impairment losses	$ 243,400		$ 243,400

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	Mar. 31, 2021	Dec. 31, 2020
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		$ 16.5	$ 19.5
Senior secured revolving facility \| LIBOR
Debt instruments
Principal percentage of each payment thereafter (as a percent)	7.00%
Senior secured revolving facility \| Base rate
Debt instruments
Principal percentage of each payment thereafter (as a percent)	6.00%

Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands	Apr. 16, 2019	Jul. 13, 2018	Mar. 31, 2021	Dec. 31, 2020
Debt instruments
Outstanding amount of term loans			$ 1,538,744	$ 1,537,956
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
Long-Term Debt and Credit Facilities
Proceeds from incremental term loans	$ 30.0	$ 30.0
Debt extinguishment costs			$ 1.4

Long-Term Debt and Credit Facilities - Receivables Securitization (Details) - USD ($)				1 Months Ended	3 Months Ended
	Dec. 17, 2020	May 21, 2020	Jan. 10, 2020	Dec. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	May 18, 2018
Outstanding borrowings under the facility			$ 0
Proceeds from initial borrowings					$ 3,000,000	$ 29,750,000
A/R Facility
Accounts Receivable from Securitization			$ 160,000,000.0
Accounts Receivable, Securitization, Term			5 years
Minimum liquidity for A/R facility			$ 60,000,000.0				$ 35,000,000.0
Forbearance fee							$ 5,000,000
Forbearance fee payable			$ 4,800,000
Variable interest rate (as a percent)			4.50%
Outstanding borrowings under the facility	$ 83,000,000.0
Facility term (years)			5 years
Early termination fee	800,000
Write off of previously recognized debt issuance costs	8,200,000
Repayment of principal, accrued interest and fees	$ 500,000
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					$ 91,900,000
Facility term (years)	5 years
Available facility amount	$ 145,000,000.0
Initial funding supported by receivables	92,000,000.0
Further funding supported by inventory and intellectual property	53,000,000.0
Proceeds from initial borrowings	$ 92,000,000.0
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	Mar. 31, 2021	Dec. 31, 2020
Debt instruments
Total debt	$ 1,538,744	$ 1,537,956
Less: Current portion of long-term debt	(39,713)	(39,952)
Long-term debt, net of current maturities	1,499,031	1,498,004
Senior secured notes
Debt instruments
Total debt	985,573	984,216
Other
Debt instruments
Total debt	37,199	37,653
First lien credit agreement
Debt instruments
Total debt	340,482	343,597
Debt discount	4,300	4,800
Unamortized debt issuance costs	15,500	17,100
Senior secured notes
Debt instruments
Debt discount	10,300	11,300
Unamortized debt issuance costs	4,100	4,500
Revolver
Debt instruments
Total debt	83,543	80,543
Securitization Facility
Debt instruments
Total debt	$ 91,947	$ 91,947

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020
Income Taxes
Income tax expense	$ (18)	$ 2,459
Actual effective tax rate	0.05%	(24.10%)
Statutory tax rate	21.00%	21.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Employee Benefit Plans - Germany & UK (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
German Pension Plan \| Unfunded Plan
Pension plans
Plan assets	$ 0.0
German Pension Plan \| Unfunded Plan \| Minimum
Pension plans
Qualifying period	10 years
U.K. Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Asterion Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years
Norway Pension Plan \| Minimum
Pension plans
Minimum required years prior to retirement for eligibility	3 years

Employee Benefit Plans - Tax Effect on Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs
Net actuarial loss	$ 17.2	$ 17.1
Deferred tax benefit	$ 2.0	$ 2.0

Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net periodic benefit cost
Service cost	$ 19	$ 19
Interest cost	424	498
Expected return on plan assets	(605)	(644)
Amortization of prior service cost	45	26
Amortization of net loss	838	432
Net periodic benefit cost	721	331
Employer contributions	$ 900	$ 600

- Definition

Amount of contribution received by defined benefit plan from employer which increases plan assets.

+ References + Details

Commitments and Contingencies (Details) $ / shares in Units, € in Millions				1 Months Ended		3 Months Ended
	Mar. 26, 2020 USD ($)	Jan. 30, 2020 $ / shares	Sep. 21, 2017 $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2020 EUR (€)	Mar. 31, 2021 USD ($)	Mar. 31, 2020 shares
Commitments and Contingencies
Shares returned to company \| shares							1,523,578
Accrued liability						$ 61,700,000
Adverse Arbitration Order
Commitments and Contingencies
Accrued liability						9,200,000
Amount awarded to customer				$ 13,000,000.0
Earnout sought \| €					€ 10.0
SourceHOV
Commitments and Contingencies
Amount paid towards judgement						$ 1,000,000.0
SourceHOV \| Petitioners
Commitments and Contingencies
Court determined fair value of stock at time of business combination (per share) \| $ / shares		$ 4,591
Amount awarded to petitioners	$ 57,698,426
SourceHOV \| Minimum \| Petitioners
Commitments and Contingencies
Argued fair value per share \| $ / shares			$ 1,633.85
SourceHOV \| Maximum \| Petitioners
Commitments and Contingencies
Argued fair value per share \| $ / shares			$ 5,079.28
SourceHOV \| Fair value guarantee \| Common Stock
Commitments and Contingencies
Number of shares owned \| shares			10,304
Ex-Sigma 2, LLC \| Petitioners
Commitments and Contingencies
Shares returned to company \| shares							1,523,578

Fair Value Measurement (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
Fair Value Measurement (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Carrying amounts and estimated fair values of financial instruments
Goodwill	$ 359,309	$ 359,781	$ 359,771
Senior secured term loan
Assets and liabilities measured at fair value
Fair value percentage	39.00%
Senior secured notes
Assets and liabilities measured at fair value
Fair value percentage	35.50%
Level 3
Reconciliation of net assets and liabilities
Balance as of Beginning of Period	$ 300	721
Earn-out Adjustments		279
Payments	(300)	(700)
Balance as of End of Period		300
Carrying Amount \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt	1,499,031	1,498,004
Interest rate swap liability		125
Acquisition contingent liability		300
Carrying Amount \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill	359,309	359,781
Fair Value \| Recurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Long-term debt	668,483	604,775
Interest rate swap liability		125
Acquisition contingent liability		300
Fair Value \| Recurring assets and liabilities \| Level 2
Carrying amounts and estimated fair values of financial instruments
Long-term debt	668,483	604,775
Interest rate swap liability		125
Fair Value \| Recurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Acquisition contingent liability		300
Fair Value \| Nonrecurring assets and liabilities
Carrying amounts and estimated fair values of financial instruments
Goodwill	359,309	359,781
Fair Value \| Nonrecurring assets and liabilities \| Level 3
Carrying amounts and estimated fair values of financial instruments
Goodwill	$ 359,309	$ 359,781

Stock-Based Compensation - Stock Incentive Plan (Details) - shares	Mar. 31, 2021	Dec. 31, 2020	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) - RSU's - 2018 Plan - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Number of Shares
Balance at the beginning of the period (in shares)	26,455
Shares granted	676,677
Balance at the end of the period (in shares)	703,132	26,455
Weighted Average Grant Date Fair Value
Balance at the beginning of the period	$ 3.78
Shares granted	2.71
Balance at the end of the period	$ 2.75	$ 3.78
Average Remaining Contractual Life (Years)
Weighted average remaining contractual life (in years)	10 months 17 days	10 months 28 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding	$ 1,934	$ 50
Minimum
Stock-Based Compensation
Vesting period	1 year
Maximum
Stock-Based Compensation
Vesting period	2 years

Stock-Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
	Jan. 18, 2018	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
2018 Plan
Unrecognized compensation expense
Unrecognized compensation expense		$ 4.0
2018 Plan \| Selling, general and administrative expense
Unrecognized compensation expense
Total compensation expense		$ 0.4	$ 0.9
Stock options
Outstanding
Exercised (in shares)		364,680
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)		1,635,700
Forfeited (in shares)		(60,467)
Outstanding Balance at the end of the year (in shares)		1,575,233		1,635,700
Weighted average Grant Date fair Value
Outstanding balance at the beginning of the period		$ 5.67
Forfeited		5.72
Outstanding balance at the end of the period		5.67		$ 5.67
Weighted Average Exercise Price
Outstanding Balance at the beginning of the year		11.89
Outstanding Balance at the end of the year (in shares)		$ 11.89		$ 11.89
Additional information
Average Remaining Vesting Period		1 year 2 months 19 days		1 year 5 months 1 day
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)	3 Months Ended
Stockholders' Equity - Common Stock (Details)	Mar. 31, 2021 Vote shares	Mar. 31, 2020 shares	Dec. 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	61,643,718		51,693,931
Common Stock, shares, outstanding	59,192,012		49,242,225
Common stock, shares returned		1,523,578
Series A Preferred Stock
Common Stock
Preferred shares converted to common stock (in shares)	510,681	1,004,183
Common Stock
Common Stock
Preferred shares converted to common stock (in shares)	223,413	409,238

Stockholders' Equity - Reverse Stock Split (Details)	Jan. 25, 2021	Mar. 31, 2021 shares	Dec. 31, 2020 shares
STOCKHOLDERS' EQUITY
Reverse stock split	0.3333
Common stock, shares issued		61,643,718	51,693,931
Common Stock, shares, outstanding		59,192,012	49,242,225
Prior To Stock Split [Member]
STOCKHOLDERS' EQUITY
Common stock, shares issued			147,511,430
Common Stock, shares, outstanding			147,511,430

Stockholders' Equity - Preferred Stock (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 25, 2021	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 $ / shares shares	Dec. 31, 2019 shares	Jul. 12, 2017 USD ($)
Preferred Stock
Preferred stock, shares authorized		20,000,000		20,000,000
Preferred stock, shares outstanding		2,779,369		3,290,050
Preferred Stock, par value (in dollars per share) \| $ / shares		$ 0.0001		$ 0.0001
Reverse stock split	0.3333
Series A Preferred Stock
Preferred Stock
Preferred stock, shares outstanding		2,779,369		3,290,050	4,294,233
Preferred Stock, par value (in dollars per share) \| $ / shares				$ 0.0001
Preferred Stock, cumulative dividends rate (in percentage)		10.00%
Accumulated preferred stock, Dividends \| $		$ 900	$ 900
Conversion of Series A Preferred stock to common shares		510,681	1,004,183
Additional common stock issuable upon conversion of remaining convertible shares		1,215,924
Cumulative accrued but unpaid dividends \| $						$ 9,900
Per share average of cumulative preferred dividends (in dollars per share) \| $ / shares		$ 0.3	$ 0.4
Reverse stock split		0.4375
Common Stock
Preferred Stock
Conversion of shares (in shares)		223,413	409,238
Common Stock
Preferred Stock
Conversion of Series A Preferred stock to common shares		223,413	409,238
Common Stock \| Series A Preferred Stock
Preferred Stock
Accumulated preferred stock, Dividends \| $		$ (1,800)	$ (2,300)
Common Stock \| Common Stock
Preferred Stock
Accumulated preferred stock, Dividends \| $		$ 900	$ 1,400

Stockholders' Equity - Treasury Stock (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 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) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 15, 2021 USD ($) $ / shares shares	Mar. 31, 2021 item $ / shares shares
Warrants
Warrants outstanding		15,565,152
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
Gross proceeds from offering expected \| $	$ 25,200
Gross proceeds	5.50%
IPO
Warrants
Warrants outstanding		35,000,000
Number of Common Stock each warrant may purchase		0.5
Private Placement
Warrants
Warrants outstanding		9,731,819
Exercise price of warrant per one Common Stock (in US$ per share) \| $ / shares	$ 4.00
Purchase of common stock, share	9,731,819
Common stock issued price \| $ / shares	$ 2.75
Gross proceeds from offering expected \| $	$ 26,800
Warrants
Warrants
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)	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($) agreement	Mar. 31, 2020 USD ($)	Dec. 31, 2016
Related-Party Transactions
Amount of related party transaction	$ 1,707,000	$ 1,551,000
Related party expense	1,707,000	1,551,000
Related Party Transaction, Reimbursement Expenses from Transactions with Related Party	$ 0	200,000
HGM
Related-Party Transactions
Ownership percentage	40.00%
HGM \| Travel Expense
Related-Party Transactions
Amount of related party transaction	$ 100,000	100,000
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%
Affiliate of largest stockholder
Related-Party Transactions
Rental expenses	$ 100,000	100,000
HOV Services, Ltd \| Data Capture And Technology Services \| Cost of revenue
Related-Party Transactions
Amount of related party transaction	300,000	400,000
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	$ 1,100,000
SourceHOV \| Entities affiliated with HGM managed funds \| Master Service Agreement \| Maximum
Related-Party Transactions
Related party expense		$ 400,000

Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related-Party Transactions
Related party expense	$ 1,707	$ 1,551
Consulting Services \| Oakana Holdings Inc \| Maximum
Related-Party Transactions
Related party expense	$ 100	$ 100

Related Party Transactions - Relationship with Apollo Global Management, LLC (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related-Party Transactions
Related party expense	$ 1,707	$ 1,551
Management Holdings \| Master Service Agreement \| Maximum
Related-Party Transactions
Revenue from related parties		100
Caesars \| Master Service Agreement
Related-Party Transactions
Revenue from related parties		900
ADT LLC \| Master Service Agreement
Related-Party Transactions
Revenue from related parties		300
Diamond Resorts Centralized Services \| Master Service Agreement
Related-Party Transactions
Revenue from related parties		900
Diamond Resorts Centralized Services \| Master Service Agreement \| Maximum
Related-Party Transactions
Related party cost of revenue		100
Presidio Group \| Master Service Agreement
Related-Party Transactions
Related party expense		$ 200

Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Payable and Receivable Balances with Affiliates
Receivables and Prepaid Expenses	$ 702	$ 711
Payables	124	97
HOV Services, Ltd
Payable and Receivable Balances with Affiliates
Receivables and Prepaid Expenses	702	711
Rule 14, LLC
Payable and Receivable Balances with Affiliates
Payables	80	44
HGM
Payable and Receivable Balances with Affiliates
Payables	43	52
Oakana Holdings Inc
Payable and Receivable Balances with Affiliates
Payables	$ 1	$ 1

Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) segment	Mar. 31, 2020 USD ($)
Segment information
Number of segments \| segment	3
Revenue	$ 300,056	$ 365,451
Cost of revenue (exclusive of depreciation and amortization)	232,587	292,539
Segment profit	67,469	72,912
Selling, general and administrative expenses (exclusive of depreciation and amortization)	41,885	50,374
Depreciation and amortization	19,599	23,185
Related party expense	1,707	1,551
Interest expense, net	43,131	41,588
Sundry expense (income), net	213	1,082
Other expense (income), net	152	(34,657)
Net loss before income taxes	(39,218)	(10,211)
ITPS
Segment information
Revenue	231,875	284,112
Cost of revenue (exclusive of depreciation and amortization)	185,502	235,120
Segment profit	46,373	48,992
HS
Segment information
Revenue	51,093	64,049
Cost of revenue (exclusive of depreciation and amortization)	35,818	44,931
Segment profit	15,275	19,118
LLPS
Segment information
Revenue	17,088	17,290
Cost of revenue (exclusive of depreciation and amortization)	11,267	12,488
Segment profit	$ 5,821	$ 4,802

Subsequent Events (Details) $ in Millions	Dec. 17, 2020 USD ($)
Securitization Facility
Subsequent Event [Line Items]
Available facility amount	$ 145.0