Second Quarter 2021 Financial Results
- Net revenue increased to
$33.3 million , as compared to$13.7 million for the same comparable period in 2020. - North American Transactions Solutions revenue increased to
$32 million , as compared to$13 million for the same comparable quarter in 2020. - International Transaction Solutions revenue increased to
$1.3 million , as compared to$0.74 million for the same comparable quarter in 2020. - Operating expenses increased to
$3.1 million , as compared to$2.2 million for the same period in 2020. - Gross margin increased to
$3.7 million , as compared to$2.2 million for the same comparable quarter in 2020. - Net income per share increased to
$0.21 , as compared to a net loss of$0.08 per share for the same comparable period in 2020. - Reflected in net income attributable to common stockholders for the quarter ended
June 30, 2021 , are two nonrecurring other income transactions totaling approximately$1.0 million . It was comprised of$0.4 million for the PPP Note debt forgiveness and$0.6 million in late fees due from Mullen in connection with the Mullen Merger Agreement.
Results of Operations for the Three Months Ended
The Company reported a net income attributable to common stockholders of approximately
The following tables set forth the Company’s sources of revenues, cost of revenues and the respective gross margins for the three months ended
Three | Three | ||||||||||||||
Months Ended | Months Ended | Increase / | |||||||||||||
Source of Revenues | Mix | Mix | (Decrease) | ||||||||||||
North American Transaction Solutions | $ | 32,015,097 | 96.2 | % | $ | 12,977,536 | 94.6 | % | $ | 19,037,561 | |||||
International Transaction Solutions | 1,276,838 | 3.8 | % | 741,073 | 5.4 | % | 535,765 | ||||||||
Total | $ | 33,291,935 | 100.0 | % | $ | 13,718,609 | 100.0 | % | $ | 19,573,326 | |||||
Three | Three | ||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | |||||||||||
Cost of Revenues | revenues | revenues | (Decrease) | ||||||||||||
North American Transaction Solutions | $ | 28,561,909 | 89.2 | % | $ | 11,016,028 | 84.9 | % | $ | 17,545,881 | |||||
International Transaction Solutions | 1,020,689 | 79.9 | % | 520,759 | 70.3 | % | 499,930 | ||||||||
Total | $ | 29,582,598 | 88.9 | % | $ | 11,536,787 | 84.1 | % | $ | 18,045,811 | |||||
Three | Three | ||||||||||||||
Months Ended | % of | Months Ended | % of | Increase / | |||||||||||
Gross Margin | revenues | revenues | (Decrease) | ||||||||||||
North American Transaction Solutions | $ | 3,453,188 | 10.8 | % | $ | 1,961,508 | 15.1 | % | $ | 1,491,680 | |||||
International Transaction Solutions | 256,149 | 20.1 | % | 220,314 | 29.7 | % | 35,835 | ||||||||
Total | $ | 3,709,337 | 11.1 | % | $ | 2,181,822 | 15.9 | % | $ | 1,527,515 |
Net revenues consist primarily of service fees from transaction processing. Net revenues were approximately
Cost of revenues represents direct costs of generating revenues, including commissions, mobile operator fees, interchange expense, processing and non-processing fees. Cost of revenues for the three months ended
The gross margin for the three months ended
Operating Expenses Analysis:
Operating expenses were approximately
The components of the Company’s selling, general and administrative expenses are reflected in the tables below.
Selling, general and administrative expenses for the three months ended
Six months ended | ||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
Salaries, benefits, taxes and contractor payments | $ | 912,201 | $ | 299,609 | $ | 645,363 | $ | 1,857,173 | ||||||||
Professional fees | 368,954 | 64,137 | 612,976 | 1,046,067 | ||||||||||||
Rent | 152,933 | 33,142 | 9,765 | 195,840 | ||||||||||||
Business development | 84,601 | 13,335 | 38,055 | 135,991 | ||||||||||||
Travel expense | 7,734 | 62,375 | 94,216 | 164,325 | ||||||||||||
Filing fees | - | - | 46,502 | 46,502 | ||||||||||||
Transaction gains | - | (41,986 | ) | - | (41,986 | ) | ||||||||||
Office expenses | 104,598 | 11,403 | 45,648 | 161,649 | ||||||||||||
Communications expenses | 63,739 | 57,552 | 76,588 | 197,879 | ||||||||||||
Insurance expense | - | - | 83,832 | 83,832 | ||||||||||||
Other expenses | 742 | 13,964 | 100,732 | 115,438 | ||||||||||||
Total | $ | 1,695,502 | $ | 513,531 | $ | 1,753,677 | $ | 3,962,710 | ||||||||
Six months ended | ||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
Salaries, benefits, taxes and contractor payments | $ | 1,085,541 | $ | 204,967 | $ | 669,295 | $ | 1,959,803 | ||||||||
Professional fees | 161,578 | 88,428 | 496,948 | 746,954 | ||||||||||||
Rent | 17,643 | 30,158 | 91,508 | 139,309 | ||||||||||||
Business development | 111,349 | 17 | 5,907 | 117,273 | ||||||||||||
Travel expense | 5,309 | 34,496 | 95,526 | 135,331 | ||||||||||||
Filing fees | - | - | 37,338 | 37,338 | ||||||||||||
Transaction losses | - | 76,499 | - | 76,499 | ||||||||||||
Office expenses | 119,485 | 10,728 | 44,975 | 175,188 | ||||||||||||
Communications expenses | 88,770 | 89,364 | 35,871 | 214,005 | ||||||||||||
Insurance expense | - | - | 80,685 | 80,685 | ||||||||||||
Other expenses | 428 | 2,103 | 16,305 | 18,836 | ||||||||||||
Total | $ | 1,590,103 | $ | 536,760 | $ | 1,574,358 | $ | 3,701,221 | ||||||||
Variance | ||||||||||||||||
Category | North American Transaction Solutions | International Transaction Solutions | Corporate Expenses & Eliminations | Total | ||||||||||||
Salaries, benefits, taxes and contractor payments | $ | (173,340 | ) | $ | 94,642 | $ | (23,932 | ) | $ | (102,630 | ) | |||||
Professional fees | 207,376 | (24,291 | ) | 116,028 | 299,113 | |||||||||||
Rent | 135,290 | 2,984 | (81,743 | ) | 56,531 | |||||||||||
Business development | (26,748 | ) | 13,318 | 32,148 | 18,718 | |||||||||||
Travel expense | 2,425 | 27,879 | (1,310 | ) | 28,994 | |||||||||||
Filing fees | - | - | 9,164 | 9,164 | ||||||||||||
Transaction gains | - | (118,485 | ) | - | (118,485 | ) | ||||||||||
Office expenses | (14,887 | ) | 675 | 673 | (13,539 | ) | ||||||||||
Communications expenses | (25,031 | ) | (31,812 | ) | 40,717 | (16,126 | ) | |||||||||
Insurance expense | - | - | 3,147 | 3,147 | ||||||||||||
Other (income) expenses | 314 | 11,861 | 84,427 | 96,602 | ||||||||||||
Total | $ | 105,399 | $ | (23,229 | ) | $ | 179,319 | $ | 261,489 |
Salaries, benefits, taxes and contractor payments increased by approximately
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
To supplement its consolidated financial statements presented in accordance with
generally accepted accounting principles (“GAAP”), the Company provides additional measures of its
operating results by disclosing its adjusted net loss attributable to
Adjusted net loss attributable to
GAAP | Share-based Compensation | Gain on Debt Forgiveness | Late Fee Income | Adjusted Non-GAAP | |||||||||||
Three Months Ended | |||||||||||||||
Net income attributable to | $ | 1,263,875 | $ | 11,237 | $ | (441,492 | ) | $ | (559,986 | ) | $ | 273,634 | |||
Basic and diluted earnings per share | $ | 0.21 | $ | - | $ | (0.07 | ) | $ | (0.09 | ) | $ | 0.05 | |||
Basic and diluted shares used in computing earnings per share | 5,966,123 | 5,966,123 | |||||||||||||
Three Months Ended | |||||||||||||||
Net loss attributable to | $ | (324,690 | ) | $ | 7,500 | $ | - | $ | - | $ | (317,190 | ) | |||
Basic and diluted earnings per share | $ | (0.08 | ) | $ | - | $ | - | $ | - | $ | (0.08 | ) | |||
Basic and diluted shares used in computing earnings per share | 4,175,148 | 4,175,148 | |||||||||||||
GAAP | Share-based Compensation | Gain on Debt Forgiveness | Late Fee Income | Adjusted Non-GAAP | |||||||||||
Six Months Ended | |||||||||||||||
Net loss attributable to | $ | 1,568,440 | $ | 22,494 | $ | (441,492 | ) | $ | (1,559,961 | ) | $ | (410,519 | ) | ||
Basic and diluted earnings per share | $ | 0.26 | $ | - | $ | (0.07 | ) | $ | (0.26 | ) | $ | (0.07 | ) | ||
Basic and diluted shares used in computing earnings per share | 5,944,636 | 5,944,636 | |||||||||||||
Six Months Ended | |||||||||||||||
Net loss attributable to | $ | (1,691,488 | ) | $ | 45,900 | $ | - | $ | - | $ | (1,645,588 | ) | |||
Basic and diluted earnings per share | $ | (0.41 | ) | $ | 0.01 | $ | - | $ | - | $ | (0.40 | ) | |||
Basic and diluted shares used in computing earnings per share | 4,146,396 | 4,146,396 |
Use of Non-GAAP Financial Measures
Non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP measures exclude significant expenses that are required by GAAP to be recorded in the Company's financial statements and are subject to inherent limitations.
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