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Paysafe Ltd

Paysafe LtdPSFE财报

NYSE

Paysafe Limited is a multinational online payments company. Paysafe offers payment processing, digital wallet and online cash systems to businesses and consumers, with particular experience of serving the global entertainment sectors. The group offers services both under the Paysafe brand and subsidiary brands that have become part of the group through several mergers and acquisitions, most notably Neteller, Skrill, SafetyPay, PagoEfectivo, PaysafeCash and PaysafeCard.

What changed in Paysafe Ltd's 20-F — 2022 vs 2023

Top changes in Paysafe Ltd's 2023 20-F

539 paragraphs added · 577 removed · 455 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

188 edited+27 added−46 removed456 unchanged
In addition, the 2021 Senior Facilities provide that Paysafe Holdings II has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in an aggregate principal amount of up to (a) the greater of 1 (1) $430.0 million and (2) an amount equal to 100% of Paysafe Holdings II’s trailing twelve-month consolidated EBITDA (as such term is defined in the credit agreement) at the time of determination plus (b) an amount equal to all voluntary prepayments, repurchases, redemptions and other retirements of the term loans under the credit agreements and certain other incremental equivalent debt and permanent revolving credit commitment reductions under the credit agreements, in each case prior to or simultaneous with the date of any such incurrence (to the extent not funded with the proceeds of long-term debt other than revolving loans) plus (c) an additional unlimited amount so long as Paysafe Holdings II (I) in the case of incremental indebtedness that is secured by the collateral under the credit agreements on a pari passu basis with the First Lien Term Loan, does not exceed a specified pro forma first lien net leverage ratio, and (II) in the case of unsecured incremental indebtedness (or indebtedness not secured by all or a portion of the collateral securing the Facilities), either does not exceed a specified total net leverage ratio or satisfies a specified fixed charge coverage ratio.
In addition, the 2021 Senior Facilities provide that Paysafe Holdings II has the right at any time, subject to customary conditions, to request incremental term loans or incremental revolving credit commitments in an aggregate principal amount of up to (a) the greater of (1) $430.0 million and (2) an amount equal to 100% of Paysafe Holdings II’s trailing twelve-month consolidated EBITDA (as such term is defined in the credit agreement) at the time of determination plus (b) an amount equal to all voluntary prepayments, repurchases, redemptions and other retirements of the term loans under the credit agreements and certain other incremental equivalent debt and permanent revolving credit commitment reductions under the credit agreements, in each case prior to or simultaneous with the date of any such incurrence (to the extent not funded with the proceeds of long-term debt other than revolving loans) plus (c) an additional unlimited amount so long as Paysafe Holdings II (I) in the case of incremental indebtedness that is secured by the collateral under the credit agreements on a pari passu basis with the First Lien Term Loan, does not exceed a specified pro forma first lien net leverage ratio, and (II) in the case of unsecured incremental indebtedness (or indebtedness not secured by all or a portion of the collateral securing the 2021 Senior Facilities), either does not exceed a specified total net leverage ratio or satisfies a specified fixed charge coverage ratio.
Rapid, significant, and disruptive technological changes, such as machine learning, container technology, artificial intelligence, biometrics (for authorization and authentication) as well as quantum computing, impact the industries in which we operate, including developments in payment card tokenization, mobile, social commerce (i.e., eCommerce through social networks), authentication, cryptocurrencies (including distributed ledger and blockchain technologies), and near-field communication, and other proximity payment technology, such as contactless payments.
Rapid, significant, and disruptive technological changes, such as machine learning, container technology, artificial intelligence, biometrics (for authorization and authentication) as well as quantum computing, impact the industries in which we operate, including developments in payment card tokenization, mobile, social commerce (i.e., eCommerce through social networks), authentication, cryptocurrencies (including distributed ledger and blockchain technologies), and near-field communication, and other proximity payment technologies, such as contactless payments.
These competitors may act on business opportunities within our specialized industry verticals, which may reduce our ability to maintain or increase or market share.
These competitors may act on business opportunities within our specialized industry verticals, which may reduce our ability to maintain or increase our market share.
If we 18 cannot compete effectively, the demand for our products and services may decline, which would adversely impact our competitive position, business and financial performance. Our operating results and operating metrics are subject to seasonality and volatility, which could result in fluctuations in our quarterly revenues and operating results or in perceptions of our business prospects.
If we cannot compete effectively, the demand for our products and services may decline, which would adversely impact our competitive position, business and financial performance. 18 Our operating results and operating metrics are subject to seasonality and volatility, which could result in fluctuations in our quarterly revenues and operating results or in perceptions of our business prospects.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of Company Common Shares, such person may be treated as a “United States shareholder” with respect to each of Paysafe and its direct and indirect subsidiaries (the “Paysafe Group”) that is a “controlled foreign corporation.” The Paysafe Group includes U.S. subsidiaries, under recently enacted rules, certain of Paysafe’s non-U.S. subsidiaries could be treated as controlled foreign corporations regardless of whether Paysafe is treated as a controlled foreign corporation (although there is currently a pending legislative proposal to significantly limit the application of these rules).
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of Company Common Shares, such person may be treated as a “United States shareholder” with respect to each of Paysafe and its direct and indirect subsidiaries (the “Paysafe Group”) that is a “controlled foreign corporation.” The Paysafe Group includes U.S. subsidiaries, and under recently enacted rules, certain of Paysafe’s non-U.S. subsidiaries could be treated as controlled foreign corporations regardless of whether Paysafe is treated as a controlled foreign corporation (although there is currently a pending legislative proposal to significantly limit the application of these rules).
Our corporate governance documents include provisions: • authorizing blank check preference shares, which could be issued without shareholder approval and with voting, liquidation, dividend and other rights superior to our Company Common Shares; 37 • providing that any action required or permitted to be taken by our shareholders must be taken at a duly called annual or special meeting of such shareholders and may not be taken by any consent in writing by such shareholders; provided that for so long as our Principal Shareholders beneficially own, collectively, at least 30% of the issued and outstanding shares carrying the right to vote at general meetings at the relevant time, any action (except the removal of a director or an auditor) which may be done by resolution of the shareholders in a general meeting may also be done by resolution in writing, signed by the shareholders who at the date of the notice of the resolution in writing represent not less than the minimum number of votes as would be required to pass the resolution if the resolution was voted on at a quorate meeting of the shareholders; • requiring, to the fullest extent permitted by applicable law, advance notice of shareholder proposals for business to be conducted at meetings of our shareholders and for shareholder-proposed nominations of candidates for election to our board of directors; • establishing a classified board of directors, so that not all members of our board are elected at one time, with the election of directors requiring only a plurality of votes cast; • providing that certain actions required or permitted to be taken by our shareholders, including amendments to the Company Bye-laws and certain specified corporate transactions, may be effected only with the approval of our board of directors, in addition to any other vote required by the Company Bye-laws and/or applicable law; • prohibiting us from engaging in a business combination with a person who acquires at least 10% of our Company Common Shares for a period of three years from the date such person acquired such common shares unless approved by the Company Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least two-thirds of our issued and outstanding voting shares that are not owned by such person, subject to certain exceptions.
Our corporate governance documents include provisions: • authorizing blank check preference shares, which could be issued without shareholder approval and with voting, liquidation, dividend and other rights superior to our Company Common Shares; • providing that any action required or permitted to be taken by our shareholders must be taken at a duly called annual or special meeting of such shareholders and may not be taken by any consent in writing by such shareholders; provided that for so long as our Principal Shareholders beneficially own, collectively, at least 30% of the issued and outstanding shares carrying the right to vote at general meetings at the relevant time, any action (except the removal of a director or an auditor) which may be done by resolution of the shareholders in a general meeting may also be done by resolution in writing, signed by the shareholders who at the date of the notice of the resolution in writing represent not less than the minimum number of votes as would be required to pass the resolution if the resolution was voted on at a quorate meeting of the shareholders; • requiring, to the fullest extent permitted by applicable law, advance notice of shareholder proposals for business to be conducted at meetings of our shareholders and for shareholder-proposed nominations of candidates for election to our board of directors; • establishing a classified board of directors, so that not all members of our board are elected at one time, with the election of directors requiring only a plurality of votes cast; • providing that certain actions required or permitted to be taken by our shareholders, including amendments to the Company Bye-laws and certain specified corporate transactions, may be effected only with the approval of our board of directors, in addition to any other vote required by the Company Bye-laws and/or applicable law; • prohibiting us from engaging in a business combination with a person who acquires at least 10% of our Company Common Shares for a period of three years from the date such person acquired such common shares unless approved by the Company Board and authorized at an annual or special meeting of shareholders by the affirmative vote of at least two-thirds of our issued and outstanding voting shares that are not owned by such person, subject to certain exceptions.
See “—Regulatory, Legal and Tax Risks—We generate a significant portion of our revenue by processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors”; • serving the entertainment verticals creates greater operational complexity, including for our compliance, legal and risk functions; • with respect to certain industries (such as iGaming), the laws related to, or the legal status of, such industries vary significantly among the countries in which we operate and, in the U.S., from state to state, further adding operational complexity particularly in compliance and risk mitigation; • we may have difficulty obtaining or maintaining relationships with merchants and third-party service providers for our business, such as banks and payment card networks, including as a result of their assessment and appetite for the compliance, cost, government regulation, risk of consumer fraud or public pressure that can be associated with some of the industries that we operate in.
See “—Regulatory, Legal and Tax Risks—We generate a significant portion of our revenue by processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors”; • serving the entertainment verticals creates greater operational complexity, including for our compliance, legal and risk functions; • with respect to certain industries (such as iGaming), the laws related to, or the legal status of, such industries vary significantly among the countries in which we operate and, in the U.S., from state to state, further adding operational complexity particularly in compliance and risk mitigation; • we may have difficulty obtaining or maintaining relationships with merchants and third-party service providers for our business, such as banks and payment card networks, including as a result of their assessment and appetite for the compliance, 4 cost, government regulation, risk of consumer fraud or public pressure that can be associated with some of the industries that we operate in.
Further, there is a long lead time to secure new sponsor banks, as described above under “—Our success depends on our relationships with banks, payment card networks, issuers and financial institutions—new banking relationships.” In Bermuda and in many countries in which we operate, we are legally or contractually required to comply with the anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act (collectively, the “BSA”), and similar laws of other countries, which, among other things, require that customer identifying information be obtained and verified.
Further, there is a long lead time to secure new sponsor banks, as described above under “—Our success depends on our relationships with banks, payment card networks, issuers and financial institutions—new banking relationships.” In many countries in which we operate, we are legally or contractually required to comply with the anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act (collectively, the “BSA”), and similar laws of other countries, which, among other things, require that customer identifying information be obtained and verified.
Foreign Corrupt Practices Act, the UK Bribery Act, the Irish Criminal Justice (Corruption Offences) Act 2018 and other local anticorruption laws; • compliance with Bermuda, UK, Irish, U.S. and other international laws and associated regulations designed to combat money laundering and the financing of terrorist activities; • antitrust and competition regulations; • potentially adverse tax developments and consequences; • economic uncertainties relating to sovereign and other debt; • national or regional differences in macroeconomic growth rates; • different, uncertain, overlapping, or more stringent user protection, data protection, privacy and other laws and regulations; and • increased difficulties in collecting accounts receivable.
Foreign Corrupt Practices Act, the UK Bribery Act, the Irish Criminal Justice (Corruption Offences) Act 2018 and other local anticorruption laws; • compliance with UK, Irish, U.S. and other international laws and associated regulations designed to combat money laundering and the financing of terrorist activities; • antitrust and competition regulations; • potentially adverse tax developments and consequences; • economic uncertainties relating to sovereign and other debt; • national or regional differences in macroeconomic growth rates; • different, uncertain, overlapping, or more stringent user protection, data protection, privacy and other laws and regulations; and • increased difficulties in collecting accounts receivable.
Guarantees and Security All obligations of the obligors under the credit agreements are unconditionally guaranteed by all guarantors under the credit agreements, such guarantors being material wholly owned direct and indirect restricted subsidiaries of Paysafe Holdings II that are organized in the UK, the United States, Canada or the jurisdiction of incorporation of any Borrower and by Paysafe Holdings II, with customary exceptions and certain agreed security principles including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in adverse tax consequences.
Guarantees and Security 2 All obligations of the obligors under the credit agreements are unconditionally guaranteed by all guarantors under the credit agreements, such guarantors being material wholly owned direct and indirect restricted subsidiaries of Paysafe Holdings II that are organized in the UK, the United States, Canada or the jurisdiction of incorporation of any Borrower and by Paysafe Holdings II, with customary exceptions and certain agreed security principles including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in adverse tax consequences.
In addition, with respect to the First Lien Revolving Credit Facility, the Senior Facilities Agreement requires Paysafe Holdings II to maintain, as of the last day of each four fiscal quarter period, a maximum consolidated first lien net leverage ratio of 7.50 to 1.00 only if, as of the last day of any fiscal quarter, revolving loans under the First Lien Revolving Credit Facility are outstanding in an aggregate amount greater than 40% of the total commitments under the First Lien Revolving Credit Facility at such time.
In addition, with respect to the First Lien Revolving Credit Facility, the 2021 Senior Facilities Agreement requires Paysafe Holdings II to maintain, as of the last day of each four fiscal quarter period, a maximum consolidated first lien net leverage ratio of 7.50 to 1.00 only if, as of the last day of any fiscal quarter, revolving loans under the First Lien Revolving Credit Facility are outstanding in an aggregate amount greater than 40% of the total commitments under the First Lien Revolving Credit Facility at such time.
We are not aware of any circumstances that may result in us being in breach of the terms of our e-money issuer, payment initiation service provider or money transmitter licenses that would be likely to lead to a revocation or termination of such licenses or a material 22 restriction on such licenses, nor are we aware of any current or pending financial, civil or criminal proceedings asserted against us in connection with a failure to hold a license in any relevant jurisdiction.
We are not aware of any circumstances that may result in us being in breach of the terms of our e-money issuer, payment initiation service provider or money transmitter licenses that would be likely to lead to a revocation or termination of such licenses or a material restriction on such licenses, nor are we aware of any current or pending financial, civil or criminal proceedings asserted against us in connection with a failure to hold a license in any relevant jurisdiction.
If we fail to make such changes or otherwise resolve the issue with the payment card networks, the networks could pass on fines and assessments in respect of fraud or chargebacks related to our merchants or disqualify us from processing transactions if satisfactory controls are not maintained, which could have a material adverse effect on our business, financial condition and results of operations.
If we fail to make such changes or otherwise resolve the issue with the payment card networks, the networks could pass on 16 fines and assessments in respect of fraud or chargebacks related to our merchants or disqualify us from processing transactions if satisfactory controls are not maintained, which could have a material adverse effect on our business, financial condition and results of operations.
Changes in the regulation of online gambling in the markets where we operate may materially and adversely affect our results of operations and financial condition if such merchants are subject to increased taxes, compliance costs, levies and license fees or are forced to cease operating in a jurisdiction as a result of prohibitive legislation, which may result in reduced demand for our services within the online gambling industry .
Changes in the regulation of online gambling in the markets where we operate may materially and adversely affect our results of 20 operations and financial condition if such merchants are subject to increased taxes, compliance costs, levies and license fees or are forced to cease operating in a jurisdiction as a result of prohibitive legislation, which may result in reduced demand for our services within the online gambling industry .
While the Schrems II decision did not invalidate standard contractual clauses, another lawful mechanism for making cross-border transfers, the decision has called their validity into question under certain circumstances, and has made the legality of transferring personal information from the EU to the United States more uncertain, and it may require government cooperation to resolve this issue.
While the Schrems II decision did not invalidate standard contractual clauses, another lawful mechanism for making cross-border transfers, the decision has called their validity into question under certain circumstances, and had made the legality of transferring personal information from the EU to the United States more uncertain, and it may require government cooperation to resolve this issue.
Furthermore, any financial turmoil affecting the banking system or financial markets could cause additional consolidation of the financial services industry, significant 7 financial service institution failures, new or incremental tightening in the credit markets, low liquidity, and extreme volatility or distress in the fixed income, credit, currency, and equity markets, which could have a material adverse impact on our results of operations, financial condition and future prospects.
Furthermore, any financial turmoil affecting the banking system or financial markets could cause additional consolidation of the financial services industry, significant financial service institution failures, new or incremental tightening in the credit markets, low liquidity, and extreme volatility or distress in the fixed income, credit, currency, and equity markets, which could have a material adverse impact on our results of operations, financial condition and future prospects.
Paysafe cannot provide any assurances that it will assist holders in determining whether any of its non-U.S. subsidiaries are treated as a controlled foreign corporation or whether any holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to 34 any holder information that may be necessary to comply with reporting and tax paying obligations.
Paysafe cannot provide any assurances that it will assist holders in determining whether any of its non-U.S. subsidiaries are treated as a controlled foreign corporation or whether any holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations.
C. Reasons for the Offer and Use of Proceeds Not applicable. 4 D. Risk Factors Risks Related to Paysafe’s Business and Industry Our focus on the large entertainment verticals can increase risk relative to other companies in the global payments industry. We operate in the global entertainment verticals, which include: iGaming, travel, streaming/video gaming, retail/hospitality and digital assets.
C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors Risks Related to Paysafe’s Business and Industry Our focus on the large entertainment verticals can increase risk relative to other companies in the global payments industry. We operate in the global entertainment verticals, which include: iGaming, travel, streaming/video gaming, retail/hospitality and digital assets.
In addition, many of our merchants are small and medium businesses that may have fewer resources dedicated to data security and may thus experience data breaches. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, and cause us to incur significant losses. Global and regional economic conditions could materially harm our business.
In addition, many of our merchants are small and medium businesses that may have fewer resources dedicated to data security and may thus experience data breaches. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, and cause us to incur significant losses. 6 Global and regional economic conditions could materially harm our business.
As described in “— Regulatory, Legal and Tax Risks—We must comply with money laundering regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere, and any failure to do so could result in severe financial and legal penalties,” we are directly subject to certain of these requirements, including, in the United States, BSA requirements applicable to Skrill USA Inc.
As described in “— Regulatory, Legal and Tax Risks—We must comply with money laundering regulations in the UK, Ireland, Switzerland, the United States, Canada and elsewhere, and any failure to do so could result in severe financial and legal penalties,” we are directly subject to certain of these requirements, including, in the United States, BSA requirements applicable to Skrill USA Inc.
Further, to the extent to which payment processors may be held civilly or criminally liable for the criminal activities of its merchant customers also varies widely across the jurisdictions in which we operate. If consumer fraud levels involving our services were to rise, it could lead to regulatory intervention and reputational and financial damage.
Further, the extent to which payment processors may be held civilly or criminally liable for the criminal activities of its merchant customers also varies widely across the jurisdictions in which we operate. 15 If consumer fraud levels involving our services were to rise, it could lead to regulatory intervention and reputational and financial damage.
In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries, and other parties with which we have commercial relationships. These laws and regulations may at times be conflicting, and the requirements to comply with these regulations could result in a negative impact to our business.
In many cases, these laws apply not only to third-party transactions, but also to transfers of information between or among us, our subsidiaries, and other 22 parties with which we have commercial relationships. These laws and regulations may at times be conflicting, and the requirements to comply with these regulations could result in a negative impact to our business.
For more information regarding our assessment of the consequences of breaches of our e-money issuer, payment initiation services provider or money transmitter licenses, see “—Regulatory, Legal and Tax Risk—We are subject to financial services regulatory risks.” Our business and products are dependent on the availability, integrity and security of internal and external IT transaction processing systems and services.
For more information regarding our assessment of the consequences of breaches of our e-money issuer, payment initiation services provider or money transmitter licenses, see “—Regulatory, Legal and Tax Risk—We are subject to financial services regulatory risks.” 13 Our business and products are dependent on the availability, integrity and security of internal and external IT transaction processing systems and services.
Moreover, while we expect to submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange 36 Act.
Moreover, while we expect to submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act.
Upon satisfaction of the requirements of Rule 144 under the Securities Act, the Existing Paysafe Shareholders and certain other significant shareholders may sell large amounts of the Company’s securities in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in Paysafe’s share price or putting significant downward pressure on the price of the Company Common Shares.
Upon satisfaction of the requirements of Rule 144 under the Securities Act, the Existing Paysafe Shareholders and certain other significant shareholders may sell large amounts of the Company’s securities in the open market or in privately negotiated transactions, 38 which could have the effect of increasing the volatility in Paysafe’s share price or putting significant downward pressure on the price of the Company Common Shares.
Our business could suffer if any current or future licenses expire or are terminated, if the licensors fail to abide by the terms of the license, if the licensors fail to 28 enforce licensed intellectual property against infringing third parties, if the licensed intellectual property rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms, or at all.
Our business could suffer if any current or future licenses expire or are terminated, if the licensors fail to abide by the terms of the license, if the licensors fail to enforce licensed intellectual property against infringing third parties, if the licensed intellectual property rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms, or at all.
In addition, we may fail to identify or adequately assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring, investing in or partnering with a company, including potential exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, internal controls and security environment.
In addition, we may fail to identify or adequately assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring, investing in or partnering with a company, including potential exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, 8 internal controls and security environment.
Even if unsuccessful, this type of claim may be time consuming and costly for us. Any of the foregoing could have a material adverse effect on our results of operations and financial condition. 14 We are vulnerable to the effects of chargebacks, merchant insolvency and consumer deposit settlement risk.
Even if unsuccessful, this type of claim may be time consuming and costly for us. Any of the foregoing could have a material adverse effect on our results of operations and financial condition. We are vulnerable to the effects of chargebacks, merchant insolvency and consumer deposit settlement risk.
This, in turn, could lead to additional government enforcement actions and investigations and concerns raised by merchants and our banking partners, which in turn could reduce the use and acceptance of our services or increase our compliance costs and thereby have a material adverse impact on our business, financial condition and results of operations.
This, in turn, could lead to additional government enforcement actions and investigations and concerns raised by merchants and our banking and payment partners, which in turn could reduce the use and acceptance of our services or increase our compliance costs and thereby have a material adverse impact on our business, financial condition and results of operations.
Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud. Beginning with the current fiscal year ended December 31, 2022, our independent registered public accounting firm was required to attest to the effectiveness of our internal control over financial reporting on an annual basis.
Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud. Beginning with the fiscal year ended December 31, 2022, our independent registered public accounting firm was required to attest to the effectiveness of our internal control over financial reporting on an annual basis.
For example, any of the following could hamper our operations and reduce our earnings in these types of countries: • the absence of a statutory or regulatory basis or guidance for engaging in specific types of business or transactions; • conflicting or ambiguous laws and regulations, or the inconsistent application or interpretation of existing laws and regulations; • uncertainty concerning the enforceability of contractual, intellectual property or other obligations; • difficulty in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive; and • the threat of arbitrary regulatory investigations, civil litigations or criminal prosecutions, the imposition of licensing requirements, or the termination or unavailability of licenses, to operate in the local market or the suspension of business relationships with governmental bodies.
For example, any of the following could hamper our operations and reduce our earnings in these types of countries: • the absence of a statutory or regulatory basis or guidance for engaging in specific types of business or transactions; • rapidly changing, conflicting or ambiguous laws and regulations, or the inconsistent application or interpretation of existing laws and regulations; • uncertainty concerning the enforceability of contractual, intellectual property or other obligations; • difficulty in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive; and • the threat of arbitrary regulatory investigations, civil litigations or criminal prosecutions, the imposition of licensing requirements, or the termination or unavailability of licenses, to operate in the local market or the suspension of business relationships with governmental bodies.
We and other third parties collect, 5 process, store and/or transmit personal information, such as names, contact details, addresses, social security numbers, credit or debit card numbers, expiration dates, driver’s license numbers, bank account numbers and bank routing information as well as certain information gathered during our Know Your Customer (“KYC”) procedures.
We and other third parties collect, process, store and/or transmit personal information, such as names, contact details, addresses, social security numbers, credit or debit card numbers, expiration dates, driver’s license numbers, bank account numbers and bank routing information as well as certain information gathered during our Know Your Customer (“KYC”) procedures.
Depending on the geographical area, there can be substantial competition for suitably skilled or qualified personnel with relevant industry and operational experience and there can be no assurance that we will be able to attract or retain our personnel on similar terms to those 17 on which we currently engage our employees, or at all.
Depending on the geographical area, there can be substantial competition for suitably skilled or qualified personnel with relevant industry and operational experience and there can be no assurance that we will be able to attract or retain our personnel on similar terms to those on which we currently engage our employees, or at all.
Our failure to comply with the restrictive covenants described above as well as other terms of our other indebtedness or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date.
Our failure to comply with the restrictive covenants described above as well as other terms of our other indebtedness or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required 31 to repay these borrowings before their due date.
See “Item 4.B. Business Overview—Our Growth Strategies.” We may not generate sufficient cash flow to finance such growth plans. Consequently, the execution of our growth strategy may require access to external sources of capital, which may not be available to us on acceptable terms, or at all.
See “Item 4.B. Business Overview—Our Growth Strategies.” We may not generate sufficient cash flow to finance such growth plans. Consequently, the execution of our growth strategy may require 32 access to external sources of capital, which may not be available to us on acceptable terms, or at all.
Uncertainty about global and regional economic events and conditions may impact our ability to conduct business in certain areas and may result in consumers and businesses postponing or lowering spending in response to, among other factors: • tighter credit; • inflation; • supply chain issues; • financial market volatility; • fluctuations in foreign currency exchange rates and interest rates; • changes and uncertainties related to government fiscal and tax policies, U.S. and international trade relationships, agreements, policies, treaties and restrictive actions, including increased duties, tariffs, or other restrictive actions; • geopolitical events in countries we operate or have offices, including natural disasters, public health issues, pandemics, changes in political conditions, acts of war and terrorism, including the military hostilities commenced in Ukraine (operations in Russia and Ukraine represented approximately 1% of revenues for the year ended December 31, 2022); • higher unemployment; • consumer debt levels or reduced consumer confidence; • complying with all applicable restrictions and sanctions that may impact our operations, including complying with any applicable sanctions imposed on Russia; • government austerity programs; and • other negative financial news, macroeconomic developments or pandemics.
Uncertainty about global and regional economic events and conditions may impact our ability to conduct business in certain areas and may result in consumers and businesses postponing or lowering spending in response to, among other factors: • tighter credit; • inflation; • supply chain issues; • financial market volatility; • fluctuations in foreign currency exchange rates and interest rates; • changes and uncertainties related to government fiscal and tax policies, U.S. and international trade relationships, agreements, policies, treaties and restrictive actions, including increased duties, tariffs, or other restrictive actions; • geopolitical events in countries we operate or have offices, including natural disasters, public health issues, pandemics, changes in political conditions, acts of war and terrorism, including the military hostilities commenced in Ukraine (operations in Russia, Ukraine and Israel represented approximately 1% of revenues for the year ended December 31, 2023); • higher unemployment; • consumer debt levels or reduced consumer confidence; • complying with all applicable restrictions and sanctions that may impact our operations, including complying with any applicable sanctions imposed on Russia; • government austerity programs; and • other negative financial news, macroeconomic developments or pandemics.
The techniques used to obtain unauthorized, improper, or illegal access to our systems, our data (including our confidential business information and intellectual property rights) or our customers’ data (including our merchants and consumers), to disable or degrade our services, demand ransom or to sabotage our systems are constantly evolving and have become increasingly complex and sophisticated.
The techniques used to obtain unauthorized, 5 improper, or illegal access to our systems, our data (including our confidential business information and intellectual property rights) or our customers’ data (including our merchants and consumers), to disable or degrade our services, demand ransom or to sabotage our systems are constantly evolving and have become increasingly complex and sophisticated.
Because we are not a bank, our business is not eligible for membership in the card payment networks, and we are, therefore, unable to directly access these card payment networks, which are required to process transactions. These networks’ operating regulations require us to be sponsored by a member bank in order to process electronic payment transactions.
Because we are not a bank, our business is not eligible for membership in card payment networks, and we are, therefore, unable to directly access these card payment networks, which are required to process transactions. These networks’ operating regulations require us to be sponsored by a member bank in order to process electronic payment transactions.
As a result, Paysafe’s ability to pay dividends in the future may be limited and Paysafe’s dividend policy may change. Paysafe’s board of directors will revisit Paysafe’s dividend policy from time to time. Our Principal Shareholders control 47.5 % of our Company and their interests may conflict with ours or yours in the future.
As a result, Paysafe’s ability to pay dividends in the future may be limited and Paysafe’s dividend policy may change. Paysafe’s board of directors will revisit Paysafe’s dividend policy from time to time. Our Principal Shareholders control 47% of our Company and their interests may conflict with ours or yours in the future.
We have been advised that an action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state in its sovereign capacity, will not be entertained by a 38 Bermuda court.
We have been advised that an action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state in its sovereign capacity, will not be entertained by a Bermuda court.
As a 39 result, you may not receive any return on an investment in our Company Common Shares unless you sell your Company Common Shares for a price greater than that which you paid for it. The market price of our Company Common Shares may be volatile, which could cause the value of your investment to decline.
As a result, you may not receive any return on an investment in our Company Common Shares unless you sell your Company Common Shares for a price greater than that which you paid for it. The market price of our Company Common Shares may be volatile, which could cause the value of your investment to decline.
If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, which could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects.
If we are unable to establish name recognition based on our trademarks and trade names, we 12 may not be able to compete effectively, which could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects.
Applicable money laundering regulations require firms to put preventative measures in place and to perform KYC procedures, including conducting customer identification and verification and undertaking ongoing monitoring. In 25 addition, regulations require companies to keep records of identity and to train their staff on the requirements of the relevant money laundering regulations.
Applicable money laundering regulations require firms to put preventative measures in place and to perform KYC procedures, including conducting customer identification and verification and undertaking ongoing monitoring. In addition, regulations require companies to keep records of identity and to train their staff on the requirements of the relevant money laundering regulations.
Our Principal Shareholders beneficially own approximately 47.5% of our Company Common Shares. Moreover, under the Company Bye-laws and the Shareholders Agreement with our Principal Shareholders, for so long as our Principal Shareholders retain significant ownership of us, we will agree to nominate to our board individuals designated by such shareholders.
Our Principal Shareholders beneficially own approximately 47% of our Company Common Shares. Moreover, under the Company Bye-laws and the Shareholders Agreement with our Principal Shareholders, for so long as our Principal Shareholders retain significant ownership of us, we will agree to nominate to our board individuals designated by such shareholders.
Failure to comply with FATCA (including as the same 29 may be implemented under the terms of any applicable IGA) could subject certain payments of U.S. source fixed, determinable, annual, or periodical income made to us to 30% FATCA withholding tax.
Failure to comply with FATCA (including as the same may be implemented under the terms of any applicable IGA) could subject certain payments of U.S. source fixed, determinable, annual, or periodical income made to us to 30% FATCA withholding tax.
In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments. 32 Upon a change of control, all of our outstanding debt under our credit facilities would become immediately due and payable.
In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments. Upon a change of control, all of our outstanding debt under our credit facilities would become immediately due and payable.
To the extent that Paysafe is recognized as a creditor of a subsidiary, its claims may still be subordinated to any security interest in or other lien on such subsidiary’s assets and to any of its debt or other obligations that are senior to Paysafe’s claims.
To the extent that Paysafe is recognized as a creditor of a subsidiary, its claims may still be 34 subordinated to any security interest in or other lien on such subsidiary’s assets and to any of its debt or other obligations that are senior to Paysafe’s claims.
Prepayments The credit agreements require Paysafe Holdings II to prepay outstanding loans under the Facilities, subject to certain exceptions, with: • 75% of the net cash proceeds of certain dispositions of property (which percentage may be reduced to 0% if Paysafe Holdings II achieves and maintains specified consolidated first lien net leverage ratios), subject to certain exceptions, and subject to Paysafe Holdings II’s right to reinvest the proceeds within a time period set forth in the credit agreements; and • 50% of annual excess cash flow (determined in accordance with the credit agreements) commencing with the first full fiscal year completed after the closing of the Facilities (which percentage may be reduced to 25% and 0% if Paysafe Holdings II achieves and maintains, as of the end of the applicable fiscal year, specified consolidated first lien net leverage ratios), subject to certain credits and exceptions.
Prepayments The credit agreements require Paysafe Holdings II to prepay outstanding loans under the 2021 Senior Facilities, subject to certain exceptions, with: • 75% of the net cash proceeds of certain dispositions of property (which percentage may be reduced to 0% if Paysafe Holdings II achieves and maintains specified consolidated first lien net leverage ratios), subject to certain exceptions, and subject to Paysafe Holdings II’s right to reinvest the proceeds within a time period set forth in the credit agreements; and • 50% of annual excess cash flow (determined in accordance with the credit agreements) commencing with the first full fiscal year completed after the closing of the 2021 Senior Facilities (which percentage may be reduced to 25% and 0% if Paysafe Holdings II achieves and maintains, as of the end of the applicable fiscal year, specified consolidated first lien net leverage ratios), subject to certain credits and exceptions.
There are risks inherent in doing business internationally on both a domestic (i.e., in-country) and cross-border basis, including, but not limited to: • foreign currency and cross-border trade risks; • risks related to government regulation or required compliance with local laws; • local licensing and reporting obligations; • obligations to comply with local regulatory and legal obligations related to privacy, data security and data localization; • expenses associated with localizing our products and services, including offering customers the ability to transact business in the local currency, and adapting our products and services to local preferences (e.g., payment methods) with which we may have limited or no experience; • trade barriers and changes in trade regulations; • difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language and cultural differences; • stringent local labor laws and regulations; • credit risk and higher levels of payment fraud; • profit repatriation restrictions, foreign currency exchange restrictions or extreme fluctuations in foreign currency exchange rates for a particular currency; • political or social unrest, economic instability, repression or human rights issues; • geopolitical events, including natural disasters, public health issues, pandemics, acts of war and terrorism; • import or export regulations; • compliance with Bermuda, UK, Irish, U.S. and other international laws prohibiting corrupt payments to government officials, such as the Bermuda Bribery Act, the U.S.
There are risks inherent in doing business internationally on both a domestic (i.e., in-country) and cross-border basis, including, but not limited to: • foreign currency and cross-border trade risks; • risks related to government regulation or required compliance with local laws; • local licensing and reporting obligations; • obligations to comply with local regulatory and legal obligations related to privacy, data security and data localization; • expenses associated with localizing our products and services, including offering customers the ability to transact business in the local currency, and adapting our products and services to local preferences (e.g., payment methods) with which we may have limited or no experience; • trade barriers and changes in trade regulations; • difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language and cultural differences; 7 • stringent local labor laws and regulations; • credit risk and higher levels of payment fraud; • profit repatriation restrictions, foreign currency exchange restrictions or extreme fluctuations in foreign currency exchange rates for a particular currency; • political or social unrest, economic instability, repression or human rights issues; • geopolitical events, including natural disasters, public health issues, pandemics, acts of war and terrorism; • import or export regulations; • compliance with UK, Irish, U.S. and other international laws prohibiting corrupt payments to government officials, such as the U.S.
See “—Risks Related to Paysafe’s Business and Industry—" Our focus on specialized industry verticals can increase our risks relative to other companies in our industry; 9 • loss of a banking product : many of our products rely on banks providing payments capability to us.
See “—Risks Related to Paysafe’s Business and Industry—" Our focus on specialized industry verticals can increase our risks relative to other companies in our industry; • loss of a banking product : many of our products rely on banks providing payments capability to us.
If a merchant or an independent sales organization (“ISO”) fails to comply with the applicable requirements of the card associations and networks, we or the merchant or ISO could be subject to a variety of fines or penalties that may be levied by the card associations or networks.
If a 9 merchant or an independent sales organization (“ISO”) fails to comply with the applicable requirements of the card associations and networks, we or the merchant or ISO could be subject to a variety of fines or penalties that may be levied by the card associations or networks.
We may modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends. These upgrades can create risks associated with implementing new systems and integrating them with existing ones.
We may modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends. These upgrades may create risks associated with implementing new systems and integrating them with existing ones.
We also rely on contractual restrictions to protect our proprietary rights when offering or procuring products and services, including confidentiality and invention assignment agreements entered into with our employees and contractors and confidentiality agreements with parties with whom we conduct business.
We also rely on contractual 26 restrictions to protect our proprietary rights when offering or procuring products and services, including confidentiality and invention assignment agreements entered into with our employees and contractors and confidentiality agreements with parties with whom we conduct business.
We generate a significant portion of our revenue by processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors. We generate a significant portion of our revenue from merchants operating in the regulated gaming and sports betting and foreign exchange trading sectors.
We generate a significant portion of our revenue by processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors. We generate a significant portion of our revenue from merchants operating in the regulated and unregulated gaming and sports betting and foreign exchange trading sectors.
On May 5, 2022, the Southern District of New York consolidated the Wiley case and the O’Brien case and recaptioned the new case In re: Paysafe Ltd. f/k/a Foley Trasimene Acquisition Corp. II Securities Litigation.
On May 5, 2022, the Southern District of 29 New York consolidated the Wiley case and the O’Brien case and recaptioned the new case In re: Paysafe Ltd. f/k/a Foley Trasimene Acquisition Corp. II Securities Litigation.
Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital and to make payments to shareholders only from profits.
Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital and to 30 make payments to shareholders only from profits.
You may be unable to resell your Company Common Shares at or above the initial public offering price. In the past few years, stock markets have experienced extreme price and volume fluctuations.
You may be unable to resell your Company Common Shares at or above the price you paid or the initial public offering price. In the past few years, stock markets have experienced extreme price and volume fluctuations.
Changes in the way these 12 platforms operate or changes in their advertising prices, data use practices or other terms could make the maintenance and promotion of our products and services and our brand more expensive or more difficult.
Changes in the way these platforms operate or changes in their advertising prices, data use practices or other terms could make the maintenance and promotion of our products and services and our brand more expensive or more difficult.
Our sponsor banks have broad discretion to impose new business or operational requirements on us for purposes of compliance with payment network rules, which may materially adversely affect our business.
Our sponsor banks have broad discretion to impose new business or operational requirements on us for purposes of compliance with payment network rules, which may materially adversely affect our 10 business.
We must comply with money laundering regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada, and elsewhere, and any failure to do so could result in severe financial and legal penalties.
We must comply with money laundering regulations in the UK, Ireland, Switzerland, the United States, Canada, and elsewhere, and any failure to do so could result in severe financial and legal penalties.
We are subject to anti-money laundering regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and in any other jurisdiction where we are established and performing activities that would require that we apply anti-money laundering regulations.
We are subject to anti-money laundering regulations in the UK, Ireland, Switzerland, the United States, Canada and in any other jurisdiction where we are established and performing activities that would require that we apply anti-money laundering regulations.
Accordingly, for such period of time, our 35 Principal Shareholders will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers.
Accordingly, for such period of time, our Principal Shareholders will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers.
The financial maintenance covenant is subject to customary equity cure rights. 3 The credit agreements also contain certain customary representations and warranties, affirmative covenants and events of default.
The financial maintenance covenant is subject to customary equity cure rights. The credit agreements also contain certain customary representations and warranties, affirmative covenants and events of default.
Nevertheless, our transaction monitoring systems may not operate as intended or may otherwise fail to effectively detect fraudulent transactions or locate where a 15 transaction is being made.
Nevertheless, our transaction monitoring systems may not operate as intended or may otherwise fail to effectively detect fraudulent transactions or locate where a transaction is being made.
This may limit the information available to holders of the common shares. We were founded in the UK in 1996 and were previously listed on the London Stock Exchange.
This may limit the information available to holders of the Company Common Shares. We were founded in the UK in 1996 and were previously listed on the London Stock Exchange.
We have obtained “principal membership” with both Mastercard Europe and Visa Europe payment networks to offer merchant acquiring services to merchants in the European Union.
We have obtained “principal membership” with both Mastercard Europe and Visa Europe payment networks to offer merchant acquiring services to merchants in the European Union and the UK.
In addition, when we introduce new services, focus on new business types or begin to operate in markets in which we have a limited history of fraud loss, we may be less able to forecast and reserve accurately for new risks. Some risk mitigations may be deemed ineffectual, for example, if our insurance coverage is not adequate.
In addition, when we introduce new services, focus on new business types or begin to operate in markets in which we have a limited history of fraud loss, we may be less able to forecast and reserve accurately for new risks. Some risk mitigation may be deemed ineffectual, for example, if our insurance coverage is not adequate.
We may no longer be a foreign private issuer as early as June 30, 2023 (the last business day of the second fiscal quarter of 2023), which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2024.
We may no longer be a foreign private issuer as early as June 30, 2024 (the last business day of the second fiscal quarter of 2024), which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2025.
In addition to paying interest on outstanding principal under the Facilities, Paysafe Holdings II will continue to be required to pay a commitment fee to the lenders under the First Lien Revolving Credit Facility in an amount equal to 30% of the applicable margin in respect of the First Lien Revolving Credit Facility multiplied by the aggregate undrawn commitments under the First Lien Revolving Credit Facility, payable quarterly in arrears.
In addition to paying interest on outstanding principal under the 2021 Senior Facilities, Paysafe Holdings II will continue to be required to pay a commitment fee to the lenders under the First Lien Revolving Credit Facility in an amount equal to 30% of the applicable margin in respect of the First Lien Revolving Credit Facility multiplied by the aggregate undrawn commitments under the First Lien Revolving Credit Facility, payable quarterly in arrears.
In addition, unless the lenders holding a majority of the outstanding loans and commitments under each credit agreement consent, each of the credit agreements provide that upon a change of control (determined in accordance with the credit agreements) or a sale of all or substantially all of the business and/or assets of the group the Facilities will be canceled and all amounts thereunder will become immediately due and payable.
In addition, unless the lenders holding a majority of the outstanding loans and commitments under each credit agreement consent, each of the credit agreements provide that upon a change of control (determined in accordance with the credit agreements) or a sale of all or substantially all of the business and/or assets of the group, the 2021 Senior Facilities will be canceled and all amounts thereunder will become immediately due and payable.
Upon a change of control, as defined under our Senior Facilities Agreement, all of our outstanding debt under the Senior Facilities Agreement would be immediately due and payable.
Upon a change of control, as defined under our 2021 Senior Facilities Agreement, all of our outstanding debt under the Senior Facilities Agreement would be immediately due and payable.
In addition, our technology platforms and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusions, ransomware and phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal internet networks as a result of the Covid-19 pandemic.
In addition, our technology platforms and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusions, ransomware and phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal internet networks as a result of a pandemic.
Several of the Company’s indirect subsidiaries are subject to regulatory supervision, including the requirement to obtain prior consent from the relevant regulator when a person holds, acquires or increases a qualifying holding in those entities. See “Item 4.B. Business Overview—Licensing and Regulation—Payments Regulation” of this Report.
Several of the Company’s indirect subsidiaries are subject to regulatory supervision, including the requirement to obtain prior consent from the relevant regulator when a person holds, acquires or increases a qualifying holding in those entities. See “Item 4.B. Business Overview—Licensing and Regulation” of this Report.
The CCPA imposes stringent data privacy and data protection requirements for the personal data of California residents, and provides for government penalties for noncompliance of up to $7,500 per violation, if willful, and provides for a private right of action in the event of a data breach affecting certain un-redacted or non-encrypted personal information of California residents.
In respect of the CCPA, this imposes stringent data privacy and data protection requirements for the personal data of California residents, and provides for government penalties for noncompliance of up to $7,500 per violation, if willful, and provides for a private right of action in the event of a data breach affecting certain un-redacted or non-encrypted personal information of California residents.
If our sponsorships agreements are terminated and we are unable to secure another sponsor bank, we will not be able to process Visa, Mastercard or other card scheme transactions, which would have a material adverse effect on results of operations, financial conditions and future prospects.
If our sponsorship agreements are terminated and we are unable to secure another sponsor bank, we will not be able to process Visa, Mastercard or other card scheme transactions, which would have a material adverse effect on results of operations, financial conditions and future prospects.
Changes in the classification of our business by Visa and/or Mastercard could result in restrictions on our service offerings. For examples, the classification of our Digital Wallet as a “Staged Digital Wallet,” a “Pass-Through Digital Wallet,” or a “Stored Value Digital Wallet” impacts which merchants in various jurisdictions can accept our funds.
Changes in the classification of our business by Visa and/or Mastercard could result in restrictions on our service offerings. For example, the classification of our Digital Wallet as a “Staged Digital Wallet,” a “Pass-Through Digital Wallet,” or a “Stored Value Digital Wallet” impacts which merchants in various jurisdictions can accept our funds.
Amortization and Maturity The USD First Lien Term Loan amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the USD First Lien Term Loan outstanding as of the date of the closing of the Facilities, with the balance being payable at maturity on June 28, 2028.
Amortization and Maturity The USD First Lien Term Loan amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00% of the principal amount of the USD First Lien Term Loan outstanding as of the date of the closing of the 2021 Senior Facilities, with the balance being payable at maturity on June 28, 2028.
The loss, destruction or unauthorized modification of merchant or consumer data by us or our contracted third parties could result in significant fines, sanctions, proceedings or actions against us by governmental bodies, the payment networks, consumers, merchants or others, and could harm our business and reputation.
The loss, destruction or unauthorized modification of merchant or consumer data by us or our contracted third parties could result in significant fines, sanctions, proceedings or actions against us by governmental bodies, regulatory and supervisory bodies, the payment networks, consumers, merchants or others, and could harm our business and reputation.
This could, individually or in the aggregate, materially harm our business. For example, GDPR requires us to delete data when we no longer have an overriding business need to retain such data and to also accept data deletion rights requests.
This could, individually or in the aggregate, materially harm our business. For example, GDPR (and other laws) requires us to delete data when we no longer have an overriding business need to retain such data and to also accept data deletion rights requests.
Despite our efforts to monitor our use of open source software and compliance with applicable license terms (for example through our using of monitoring software to assess vulnerability and licensing implication), we cannot guarantee we comply with all terms of open source licenses applicable to us, and we could be required by the terms of applicable open source software licenses to publicly disclose all or part of the proprietary source code to our software and/or make available any derivative works of the open source code on unfavorable terms or at no cost.
Despite our efforts to monitor our 27 use of open source software and compliance with applicable license terms (through using monitoring software to assess vulnerability and licensing implication), we cannot guarantee we comply with all terms of open source licenses applicable to us, and we could be required by the terms of applicable open source software licenses to publicly disclose all or part of the proprietary source code to our software and/or make available any derivative works of the open source code on unfavorable terms or at no cost.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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These include: • A Global Stored-Value Digital Wallet Solution— that enables users to upload, store, withdraw, pay and send funds from a branded, or embedded, virtual account that can transact in over 14 languages and over 40 currencies and is integrated with close to 260 alternative payment methods, or APMs, from around the world; • An eCash Network —that enables users to transform cash at over a million locations across over 50 countries into a proprietary digital currency accessed by a mobile app, a virtual account or a user code and used for online gaming, video games, mobile commerce, or in-app purchases; and • An Independent Merchant Acquiring Solution —that enables SMBs to conduct eCommerce, software-integrated commerce and in-store commerce more effectively by utilizing our single API, proprietary gateway, data tokenization, risk management and fraud tools and over 150 integrated software vendor (“ISV”) integrations to process credit card, debit card and APM services seamlessly.
These include: • A Global Stored-Value Digital Wallet Solution— that enables users to upload, store, withdraw, pay and send funds from a branded, or embedded, virtual account that can transact in over 14 languages and over 40 currencies and is integrated with close to 260 alternative payment methods, or APMs, from around the world; • An eCash Network —that enables users to transform cash at over a million locations across over 50 countries into a proprietary digital currency accessed by a mobile app, a virtual account or a user code and used for online gaming, video games, mobile commerce, or in-app purchases; and • An Independent Merchant Acquiring Solution —that enables SMBs to conduct eCommerce, software-integrated commerce and in-store commerce more effectively by utilizing our single API, proprietary gateway, data tokenization, risk management and fraud tools and approximately 150 integrated software vendor (“ISV”) integrations to process credit card, debit card and APM services seamlessly.
For example: o Data & Insights —we are leveraging the significant amount of data across our global ecosystem to (i) provide our business clients with valuable insights into consumer preferences and spending trends that help them grow their sales 46 volumes and (ii) optimize our underwriting and onboarding capabilities to increase our acceptance rates and reduce the number of declined transactions due to false positive triggers; and o Artificial Intelligence & Automation— we are leveraging the implementation of A.I. and process automation technologies to optimize the speed and operating efficiencies of our technology and risk management platforms as well as our internal processes and back office systems to generate better marginal cost efficiencies. • International Expansion- We believe the combination of our brand, breadth of solutions, our ability to serve both businesses and consumers, our ease of integration and our strong risk management and regulatory compliance provide us with powerful competitive advantages to capture additional market share. • iGaming.
For example: o Data & Insights —we are leveraging the significant amount of data across our global ecosystem to (i) provide our business clients with valuable insights into consumer preferences and spending trends that help them grow their sales volumes and (ii) optimize our underwriting and onboarding capabilities to increase our acceptance rates and reduce the number of declined transactions due to false positive triggers; and o Artificial Intelligence & Automation— we are leveraging the implementation of A.I. and process automation technologies to optimize the speed and operating efficiencies of our technology and risk management platforms as well as our internal processes and back office systems to generate better marginal cost efficiencies. • International Expansion- We believe the combination of our brand, breadth of solutions, our ability to serve both businesses and consumers, our ease of integration and our strong risk management and regulatory compliance provide us with powerful competitive advantages to capture additional market share. • iGaming.
These sales personnel help businesses learn about our solutions and then will help configure a commercial solution for them from our suite of offerings. • Indirect Sales— We have built a network of resellers and partners, such as online portals, ISVs, Payment Facilitators and ISOs, who integrate our solutions into their own services or resell our solutions by utilizing their own salesforces or online marketing initiatives. • Online Resellers— We work with selected merchants and partners in specific verticals, such as iGaming and gaming, who promote our solutions or sell them in store. • Distribution Partners —We work with distribution partners in over 50 countries across over one million distribution points-of-sale for Paysafecard and Paysafecash. • ISVs— We work with over 150 ISVs who develop vertical-specific business management SaaS solutions for industries such as restaurants, spa/salon, gyms, charities, property managers, and field service companies, among others.
These sales personnel help businesses learn about our solutions and then will help configure a commercial solution for them from our suite of offerings. • Indirect Sales— We have built a network of resellers and partners, such as online portals, ISVs, Payment Facilitators and ISOs, who integrate our solutions into their own services or resell our solutions by utilizing their own salesforces or online marketing initiatives. • Online Resellers— We work with selected merchants and partners in specific verticals, such as iGaming and gaming, who promote our solutions or sell them in store. • Distribution Partners —We work with distribution partners in over 50 countries across over one million distribution points-of-sale for Paysafecard and Paysafecash. • ISVs— We work with approximately 150 ISVs who develop vertical-specific business management SaaS solutions for industries such as restaurants, spa/salon, gyms, charities, property managers, and field service companies, among others.
As such we have: (a) global capabilities that enable us to source acquisition targets from a large and fragmented pool of attractive candidates that we can evaluate and learn from; (b) a “plug and play” platform infrastructure, such as Unity , that we can leverage to generate revenue and cost synergies from an acquired company; (c) a significant amount of deal experience and expertise across a seasoned team that enables us to source, identify, negotiate and execute deals effectively; and (d) strong integration capabilities powered by our strong entrepreneurial culture and global HR infrastructure that enable us to welcome, integrate and empower new company founders, management teams and employee bases around the world.
As such we have: (a) global capabilities that enable us to source acquisition targets from a large and fragmented pool of attractive candidates that we can evaluate and learn from; (b) a “plug and play” platform infrastructure, such as Unity , that we can leverage to generate revenue and 40 cost synergies from an acquired company; (c) a significant amount of deal experience and expertise across a seasoned team that enables us to source, identify, negotiate and execute deals effectively; and (d) strong integration capabilities powered by our strong entrepreneurial culture and global HR infrastructure that enable us to welcome, integrate and empower new company founders, management teams and employee bases around the world.
The focus areas of our global risk, regulatory and compliance operations include: • Global Expertise & Policies —We have leveraged our deep domain expertise and over 20 years of experience in solving the complexities of digital commerce to develop a series of stringent proprietary operating policies that enable us to operate a broad global business with deep local risk and regulatory compliance capabilities; 50 • Licenses & Certifications— We have built a network of relationships with regulators, networks and financial institutions, undergone numerous certification and registration processes and successfully acquired numerous operating licenses that enable us to operate in multiple jurisdictions in a safe and compliant manner.
The focus areas of our global risk, regulatory and compliance operations include: • Global Expertise & Policies —We have leveraged our deep domain expertise and over 20 years of experience in solving the complexities of digital commerce to develop a series of stringent proprietary operating policies that enable us to operate a broad global business with deep local risk and regulatory compliance capabilities; • Licenses & Certifications— We have built a network of relationships with regulators, networks and financial institutions, undergone numerous certification and registration processes and successfully acquired numerous operating licenses that enable us to operate in multiple jurisdictions in a safe and compliant manner.
Our global risk appetite has qualitative and quantitative measures in place, to support our business with broad-based guidance on the amount and type of risk we are willing to accept in pursuit of our strategic objectives. • Core Risk Tracking System —We leverage governance, risk and compliance tools to track enterprise-wide risks, document improvement actions, identify accountable owners and track progress towards closure of key risks. • Centralized Risk Repository —We have centralized a repository of core risk policies, processes and control documentation via global risk governance and Enterprise Risk Management.
Our global risk appetite has qualitative and quantitative measures in place, to support our business with broad-based guidance on the amount and type of risk we are willing to accept in pursuit of our strategic objectives. • Core Risk Tracking System —We leverage governance, risk and compliance tools to track enterprise-wide risks, document improvement actions, identify accountable owners and track progress towards closure of key risks. 49 • Centralized Risk Repository —We have centralized a repository of core risk policies, processes and control documentation via global risk governance and Enterprise Risk Management.
As a result, we believe businesses are looking for commerce enabling partners that can assist them with these capabilities and the advanced data and insights needed to manage their businesses more effectively, through a unified offering and a single integration. • Need for Global Capabilities —Businesses are increasingly demanding service providers and partners capable of serving their needs across a broad range of geographic markets and do not want to manage the complexity associated with having multiple providers and partners in separate markets.
As a result, we believe businesses are looking for 43 commerce enabling partners that can assist them with these capabilities and the advanced data and insights needed to manage their businesses more effectively, through a unified offering and a single integration. • Need for Global Capabilities —Businesses are increasingly demanding service providers and partners capable of serving their needs across a broad range of geographic markets and do not want to manage the complexity associated with having multiple providers and partners in separate markets.
We are also connecting our digital wallet gateway with our acquiring services to provide a unified and more powerful gateway solution that supports our enterprise sales and enables our business clients to secure, authorize and execute different types of transactions through a convenient and seamless service experience. • Customer Experience- We intend to focus on simplification and automation of our client experience. • Platform Optimization —we are implementing a series of initiatives to create new synergies and greater operating efficiencies within our platform.
We are also connecting our digital wallet gateway with our acquiring services to provide a unified and more powerful gateway solution that supports our enterprise sales and enables our business clients to secure, authorize and execute different types of transactions through a convenient and seamless service experience. • Customer Experience- We intend to focus on simplification and automation of our client experience. 45 • Platform Optimization —we are implementing a series of initiatives to create new synergies and greater operating efficiencies within our platform.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—We must comply with money laundering regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere, and any failure to do so could result in severe financial and legal penalties.” Applicable money laundering regulations require firms to put preventative measures in place and to perform KYC procedures, including conducting customer identification and verification and undertaking ongoing monitoring.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—We must comply with money laundering regulations in the UK, Ireland, Switzerland, the United States, Canada and elsewhere, and any failure to do so could result in severe financial and legal penalties.” Applicable money laundering regulations require firms to put preventative measures in place and to perform KYC procedures, including conducting customer identification and verification and undertaking ongoing monitoring.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—Our business is subject to extensive regulation and oversight in a variety 57 of areas, all of which are subject to change and uncertain interpretation, including in such ways as could criminalize certain of our activities.” Data Protection and Information Security We process personal data, some of which may be sensitive, as part of our business and are subject to increasingly complex regulations related to privacy, data protection and information security in the jurisdictions in which we do business.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—Our business is subject to extensive regulation and oversight in a variety of areas, all of which are subject to change and uncertain interpretation, including in such ways as could criminalize certain of our activities.” Data Protection and Information Security We process personal data, some of which may be sensitive, as part of our business and are subject to increasingly complex regulations related to privacy, data protection and information security in the jurisdictions in which we do business.
This will present both challenges and opportunities for participants and require digital commerce enabling partners to build and provide a strong regulatory compliance expertise that will not expose customers to unnecessary risks. 44 • Need for Strong Security & Data Protection —The shift to digital commerce and increasing use of data has resulted in larger amounts of sensitive information being transmitted and stored electronically by a growing number of consumers, businesses and government entities.
This will present both challenges and opportunities for participants and require digital commerce enabling partners to build and provide a strong regulatory compliance expertise that will not expose customers to unnecessary risks. • Need for Strong Security & Data Protection —The shift to digital commerce and increasing use of data has resulted in larger amounts of sensitive information being transmitted and stored electronically by a growing number of consumers, businesses and government entities.
Our merchants are subject to due diligence in accordance with our policies and procedures before acceptance and, subject to the below, we intend for all customers to be subjected to progressive, risk-based KYC procedures with levels of identity verification through a combination of screening, monitoring of activity patterns and transaction volumes surpassing pre-set limits (in accordance with applicable regulations in Europe, the UK and in North America).
Our merchants are subject to due diligence in accordance with our policies and procedures before acceptance and, subject to the below, we intend for all customers to be subjected to progressive, risk-based KYC procedures with levels of identity verification through a combination of screening, monitoring of activity patterns and 53 transaction volumes surpassing pre-set limits (in accordance with applicable regulations in Europe, the UK and in North America).
We do not incorporate the information contained on, or accessible through, the Company’s websites into this Report, and you should not consider it as a part of this Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website is www.sec.gov. B.
We do not incorporate the information contained on, or accessible through, the Company’s websites into this Report, and you should not consider it as a part of this Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website is https://www.sec.gov . B.
Certain money transmitters engaged in international money transfers such as Skrill USA are required to provide additional consumer information and disclosures, adopt error resolution standards and adjust refund procedures for international transactions originating in the United States, and certain money transmitters that are deemed by regulation to be “larger participants” in the international money transfer market, such as Skrill USA, are subject to direct supervision by the CFPB.
Certain money transmitters engaged in international money transfers such as Skrill USA are required to provide additional consumer information and disclosures, adopt error resolution standards and adjust refund procedures for international transactions originating in the United States, and certain money transmitters that are deemed by 50 regulation to be “larger participants” in the international money transfer market, such as Skrill USA, are subject to direct supervision by the CFPB.
In addition, our European payment processing business has similar relationships with sponsor banks in order to access other European payment networks. 53 Indirect and Direct Regulatory Requirements Our sponsor banks and certain of our merchants are financial institutions that are directly subject to various regulations and compliance obligations issued by their regulators and in the countries in which they operate.
In addition, our European payment processing business has similar relationships with sponsor banks in order to access other European payment networks. Indirect and Direct Regulatory Requirements Our sponsor banks and certain of our merchants are financial institutions that are directly subject to various regulations and compliance obligations issued by their regulators and in the countries in which they operate.
To implement this monitoring process, we have created an experienced team with in-depth industry knowledge, who take a number of measures in order to ensure that they are well placed to make decisions to accept or decline business in particular jurisdictions and to deploy our technology platform in order to best apply these decisions.
To implement this monitoring process, we have created an experienced team with in-depth industry knowledge, who take a number of measures in order to ensure that they are well 55 placed to make decisions to accept or decline business in particular jurisdictions and to deploy our technology platform in order to best apply these decisions.
Furthermore, certain of our subsidiaries are considered Foreign Money Service Businesses (“FMSBs”) under Canadian Proceeds of Crime (Money Laundering) and Terrorist Financing Act and are therefore required to hold FMSB licenses with FINTRAC, the Canadian Regulator. These licensed subsidiaries are subject to record keeping and reporting requirements for all activity involving money transferring and foreign exchange dealing.
Certain of our subsidiaries are considered Foreign Money Service Businesses (“FMSBs”) under Canadian Proceeds of Crime (Money Laundering) and Terrorist Financing Act and are therefore required to hold FMSB licenses with FINTRAC, the Canadian Regulator. These licensed subsidiaries are subject to record keeping and reporting requirements for all activity involving money transferring and foreign exchange dealing.
Where we have made a decision for legal and/or policy reasons not to accept gambling transactions from customers in particular territories, we endeavor to implement those decisions rigorously using our risk management platform. Before we accept business from merchants or customers for gambling activities, we are careful to assess the risk for us of accepting such business.
Where we have made a decision for legal and/or policy reasons not to accept gambling transactions from customers in particular territories, we endeavor to implement those decisions rigorously using our risk management platform. 54 Before we accept business from merchants or customers for gambling activities, we are careful to assess the risk for us of accepting such business.
These reviews comprise the solicitation of legal advice (and updated advice) as well as the assessment of market intelligence, which are then assessed and 56 determined by our Market Presence Committee. Other gambling operators, regulators and other payments businesses and financial institutions may, however, take a different view of the legal environment in any particular jurisdiction.
These reviews comprise the solicitation of legal advice (and updated advice) as well as the assessment of market intelligence, which are then assessed and determined by our Market Presence Committee. Other gambling operators, regulators and other payments businesses and financial institutions may, however, take a different view of the legal environment in any particular jurisdiction.
This vertical is highly regulated and requires significant technology development and compliance infrastructure to facilitate cross-border commerce and the penetration of new markets, such as the United States and Latin America, which are opening due to favorable secular and regulatory trends and the increasing 41 use of smartphones as a primary interface.
This vertical is highly regulated and requires significant technology development and compliance infrastructure to facilitate cross-border commerce and the penetration of new markets, such as the United States and Latin America, which are opening due to favorable secular and regulatory trends and the increasing use of smartphones as a primary interface.
Additionally, it is possible that third parties, including our competitors, may 58 obtain patents relating to technologies that overlap or compete with our technology. If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or otherwise preclude us from using our technology.
Additionally, it is possible that third parties, including our competitors, may obtain patents relating to technologies that overlap or compete with our technology. If third parties obtain patent protection with respect to such technologies, they may assert that our technology infringes their patents and seek to charge us a licensing fee or otherwise preclude us from using our technology.
Key Market Trends We are positioned in key market segments: • Growth in Digital Wallets —According to IBM, Covid-19 has accelerated the transition from physical stores to digital by roughly 5 years, increasing consumer and merchant appetite for digital payment methods at a much faster rate.
Key Market Trends We are positioned in key market segments: 42 • Growth in Digital Wallets —According to IBM, COVID-19 has accelerated the transition from physical stores to digital by roughly 5 years, increasing consumer and merchant appetite for digital payment methods at a much faster rate.
Implementing regulations for the CCPA were released in August 2020, and on November 3, 2020, California voters approved a new law, the California Privacy Rights Act (“CPRA”). The CPRA expands the rights of consumers and establishes the California Privacy Protection Agency, providing the agency with investigative, enforcement and rule-making powers.
Implementing regulations for the CCPA were released in August 2020, and on November 3, 2020, California voters approved a new 56 law, the California Privacy Rights Act (“CPRA”). The CPRA expands the rights of consumers and establishes the California Privacy Protection Agency, providing the agency with investigative, enforcement and rule-making powers.
This discussion is not exhaustive, and there are numerous other regulatory agencies that have or may assert jurisdiction over our activities. The laws and regulations applicable to the payments industry in any given jurisdiction are subject to interpretation and change. Payments Regulation Various laws and regulations govern the global payments industry.
This discussion is not exhaustive, and there are numerous other regulatory agencies that have or may assert jurisdiction over our activities. The laws and regulations applicable to the payments industry in any given jurisdiction are subject to interpretation and change. Various laws and regulations govern the global payments industry.
Though there is still litigation and uncertainty involving the meaning of “abusiveness” under the 54 Dodd-Frank Act and whether payment processing companies are subject to these provisions (and the extent of their application), these provisions may apply or be applicable to us in the future.
Though there is still litigation and uncertainty involving the meaning of “abusiveness” under the Dodd-Frank Act and whether payment processing companies are subject to these provisions (and the extent of their application), these provisions may apply or be applicable to us in the future.
Our Digital Wallets segment experiences increased activity based on the occurrence and timing of sporting events. Legal Proceedings 59 We are, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business.
Our Digital Wallets segment experiences increased activity based on the occurrence and timing of sporting events. Legal Proceedings We are, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business.
We support payments across the leading gaming merchants, including Sony PlayStation, Xbox/Microsoft, Google Play, Stadia, Samsung, Huawei, Steam, Wargaming.net, Riot Games, Roblox, Twitch, EPIC Games, Ubisoft, Mojang, Innogames, Facebook, Activision Blizzard and others. paysafecard enables these gaming merchants to accept eCash payments, resulting in higher conversion rates and new customer acquisition, which comes from a customer segment untapped by the conventional payment options.
We support payments across the leading gaming merchants, including Sony PlayStation, Xbox/Microsoft, Google Play, Stadia, Samsung, Huawei, Steam, Wargaming.net, Riot Games, Roblox, Twitch, EPIC Games, Ubisoft, Innogames, Activision Blizzard and others. paysafecard enables these gaming merchants to accept eCash payments, resulting in higher conversion rates and new customer acquisition, which comes from a customer segment untapped by the conventional payment options.
Some of the key milestones in our evolution include: 42 • Our Foundations and Pioneering of Digital Commerce —NETBANX began in 1996 with Arsenal Football Club as the first to sign up for the system.
Some of the key milestones in our evolution include: • Our Foundations and Pioneering of Digital Commerce —NETBANX began in 1996 with Arsenal Football Club as the first to sign up for the system.
The combination of this breadth of solutions, our sophisticated risk management and our deep regulatory expertise and deep industry knowledge across target verticals enables us to empower 19 million active users in more than 120 countries and over 250,000 SMBs to conduct secure and friction-less commerce across online, mobile, in-app and in-store channels.
The combination of this breadth of solutions, our sophisticated risk management and our deep regulatory expertise and deep industry knowledge across target verticals enables us to empower 18 million active users in more than 120 countries and over 250,000 SMBs to conduct secure and friction-less commerce across online, mobile, in-app and in-store channels.
The transaction is completed when the users makes a cash payment at a designated retail location authorized to accept the bar code or PIN identifier. 48 We also offer a paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases anywhere in the world, online or offline, where Mastercard is accepted.
The transaction is completed when the users makes a cash payment at a designated retail location authorized to accept the bar code or PIN identifier. 47 We also offer a paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases anywhere in the world, online or offline, where Mastercard is accepted.
This enables our clients to get all of the features and benefits of being a PayFac without the risk, extensive underwriting and registration burdens, cash reserve requirements, or compliance and monitoring overhead. 49 Our Customer Service & Support We provide customer support services that have been designed to address the specific support issues of each of our two business segments.
This enables our clients to get all of the features and benefits of being a PayFac without the risk, extensive underwriting and registration burdens, cash reserve requirements, or compliance and monitoring overhead. 48 Our Customer Service & Support We provide customer support services that have been designed to address the specific support issues of each of our two business segments.
See “Explanatory Note” for further details regarding the Transaction. See “Item 5. Operating and Financial Review and Prospects” for a discussion of Paysafe’s principal capital expenditures and divestitures for each of the three years in the period ended December 31, 2022. There are no material capital expenditures or divestitures currently in progress as of the date of this Report.
See “Explanatory Note” for further details regarding the Transaction. See “Item 5. Operating and Financial Review and Prospects” for a discussion of Paysafe’s principal capital expenditures and divestitures for each of the three years in the period ended December 31, 2023. There are no material capital expenditures or divestitures currently in progress as of the date of this Report.
We have successfully acquired and integrated 19 companies (including our acquisition in SafetyPay in 2022) since our foundation and have an advantaged platform for consolidation.
We have successfully acquired and integrated 19 companies (including our acquisition of SafetyPay in 2022) since our foundation and have an advantaged platform for consolidation.
Please refer to Note 21, Operating segments , within Item 18, Financial Statements for further details. 47 Overview by Segment Merchant Solutions The Merchant Solutions segment is the combination of our historical US Acquiring segment and Integrated & eCommerce Solutions business and services markets primarily in North America, Canada and Europe.
Please refer to Note 21, Operating segments , within Item 18, Financial Statements for further details. 46 Overview by Segment Merchant Solutions The Merchant Solutions segment is the combination of our historical US Acquiring segment and Integrated & eCommerce Solutions business and services markets primarily in North America, Canada and Europe.
Breach of these rules may result in fines, public censures, customer remediation and redress and ultimately in the revocation of our regulatory license.
Breach of these rules may result in fines, public censures, customer remediation and redress 52 and ultimately in the revocation of our regulatory license.
Decisions to add or remove countries from our banned country list are taken on a country-by-country basis and we adopt a risk based approach when making such decisions and, among other things, will conduct an assessment of the legal environment. • Non-Serviced countries and territories .
Decisions to add or remove countries from our sanctioned country list are taken on a country-by-country basis and we adopt a risk based approach when making such decisions and, among other things, will conduct an assessment of the legal environment. • Non-Serviced countries and territories .
These firms are increasingly partnering with digital commerce solutions providers to integrate these features as seamlessly as possible. 43 • Emerging Markets — We believe our acquisition of both Safetypay, a platform that enables eCommerce transactions in over 11 Latin American countries, and PagoEfectivo, the leading alternative payment platform and Brand in Peru, positions us to compete well in this growing market. • Embedded Finance— For Paysafe, embedded finance includes our white-label wallet.
These firms are increasingly partnering with digital commerce solutions providers to integrate these features as seamlessly as possible. • Emerging Markets — We believe our acquisition of both Safetypay, a platform that enables eCommerce transactions in Latin American countries, and PagoEfectivo, the leading alternative payment platform and Brand in Peru, positions us to compete well in this growing market. • Embedded Finance— For Paysafe, embedded finance includes our white-label wallet.
Money transmitting businesses are subject to numerous regulations in the United States at the federal and state levels, and we have obtained or applied for money transmitter licenses (or applicable similar licenses) in all U.S. states and territories in which we are required to do so, with licenses pending.
Money transmitting businesses are subject to numerous regulations in the United States at the federal and state levels, and we have obtained or applied for money transmitter licenses (or applicable similar licenses) in all U.S. states and territories in which we are required to do so, with one license pending.
We sell our solutions directly and indirectly through partners, to a diverse set of merchants and integrated service providers. Our Merchant Services are targeted towards online small and medium sized merchants and software-integrated merchants with integrated payment capabilities for over 150 integrated software vendors (“ISV”).
We sell our solutions directly and indirectly through partners, to a diverse set of merchants and integrated service providers. Our Merchant Services are targeted towards online small and medium sized merchants and software-integrated merchants with integrated payment capabilities for approximately 150 integrated software vendors (“ISV”).
Unique Global Culture & Expertise Since we were a pioneer in the early days of eCommerce, we developed strong company characteristics over the last 20 years that we believe provide us with material advantages, including: • Entrepreneurial Culture and Client-Centric Focus —We have proactively developed an entrepreneurial culture within Paysafe to foster a highly energetic, innovative and collaborative mindset for our employees by promoting four core employee value statements: • Pioneering —We are curious and collaborate to find innovative ways to improve our business; • Focused —We are results driven, achieving our goals by delivering relevant solutions that meet our clients’ needs; • Open —We are open and transparent in the way we work together, building trustworthy relationships with our colleagues, customers and shareholders; and • Courageous —We encourage empowered people to be brave when challenging the status quo, and decisive when proposing and implementing the resulting change. 45 We believe we have curated an attractive workplace environment for employees.
Unique Global Culture & Expertise Since we were a pioneer in the early days of eCommerce, we developed strong company characteristics over the last 20 years that we believe provide us with material advantages, including: 44 • Entrepreneurial Culture and Client-Centric Focus —We have proactively developed an entrepreneurial culture within Paysafe to foster a highly energetic, innovative and collaborative mindset for our employees by promoting four core employee value statements: • Pioneering —We are curious and collaborate to find innovative ways to improve our business; • Focused —We are results driven, achieving our goals by delivering relevant solutions that meet our clients’ needs; • Open —We are open and transparent in the way we work together, building trustworthy relationships with our colleagues, customers and shareholders; and • Courageous —We encourage empowered people to be brave when challenging the status quo, and decisive when proposing and implementing the resulting change.
In Latin America we offer Safetypay, a platform that enables eCommerce transactions in 14 Latin American countries, and PagoEfectivo, the leading alternative payment platform and Brand in Peru which positions us to compete well in this growing market.
In Latin America we offer Safetypay, a platform that enables eCommerce transactions in 12 Latin American countries, and PagoEfectivo, the leading alternative payment platform and Brand in Peru which positions us to compete well in this growing market.
We are subject to anti-money laundering regulation in Bermuda, the UK, Ireland, Switzerland, the United States and in any other jurisdiction, including other member states of the EEA, where we are established and performing activities that would require that we apply anti-money laundering regulation.
We are subject to anti-money laundering regulation in the UK, Ireland, Switzerland, Canada, the United States and in any other jurisdiction, including other member states of the EEA, where we are established and performing activities that would require that we apply anti-money laundering regulation.
Where the market is not classified as either banned, non-serviced or limited service, we categorize it as accepted and support processing payments in relation to online gambling from such jurisdictions.
Where the market is not classified as either sanctioned, non-serviced or limited service, we categorize it as accepted and support processing payments in relation to online gambling from such jurisdictions.
We will continue to integrate our digital commerce solutions with new eCommerce platforms to enable our approximately19 million digital wallet active users to purchase goods and services online. • Pursue Strategic Acquisitions - We will pursue acquisitions to gain access to strategically important technology, products and distribution, as well as to enter new markets or supplement our position in markets we currently serve.
We will continue to integrate our digital commerce solutions with new eCommerce platforms to enable our approximately 18 million digital wallet active users to purchase goods and services online. • Pursue Strategic Acquisitions - We will pursue acquisitions to gain access to strategically important technology, products and distribution, as well as to enter new markets or supplement our position in markets we currently serve.
Additionally, we offer seamless integrations into leading eCommerce platforms and multiple APMs to offer targeted, localized payment methods in key markets. In the United States, we service over 200k SMB merchants and over 150 ISV partners.. In Europe, where we have our own acquiring license, our target merchants are larger e-commerce clients.
Additionally, we offer seamless integrations into leading eCommerce platforms and multiple APMs to offer targeted, localized payment methods in key markets. In the United States, we service over 250k SMB merchants and approximately 150 ISV partners. In Europe, where we have our own acquiring license, our target merchants are larger e-commerce clients.
For example: • Paysafe is a global leader in iGaming payment services , which encompasses a broad selection of online sports betting, esports, fantasy sports, poker and other casino games.
For example: • Paysafe is a global leader in iGaming payment services , which encompasses a broad selection of online sports betting, e-sports, fantasy sports, poker and other casino games.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.” Our total research and development expense for the year ended December 31, 2022 and 2021 was $7,377 and $8,574, respectively.
Risk Factors—Risks Related to Our Business and Industry—Regulatory, Legal and Tax Risks—If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.” Our total research and development expense for the year ended December 31, 2023 and 2022 was $7,278 and $7,377, respectively.
We believe that an increasing percentage of digital commerce around the world is becoming too complex for traditional retail payment services, many of which still use legacy business processes and technologies that were developed 10 or more years ago to address an 40 earlier generation of eCommerce.
We believe that an increasing percentage of digital commerce around the world is becoming too complex for traditional retail payment services, many of which still use legacy business processes and technologies that were developed years ago to address an earlier generation of eCommerce.
We compete primarily on the basis of brand recognition; distribution network and channel options; convenience; variety of payment methods; product and service offerings; customer service for both consumers and merchants; trust and reliability; speed; data protection and security; price; and innovation. Employees As of December 31, 2022, we had approximately 3,300 employees globally.
We compete primarily on the basis of brand recognition; distribution network and channel options; 57 convenience; variety of payment methods; product and service offerings; customer service for both consumers and merchants; trust and reliability; speed; data protection and security; price; and innovation. Employees As of December 31, 2023, we had approximately 3,200 employees globally.
The complaints seek unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, on behalf of a purported class of purchasers of our ordinary shares between December 7, 2020 and November 10, 2021. We believe that the allegations contained in the complaint are without merit and intend to defend the complaint vigorously.
The complaints seek unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, on behalf of a purported class of purchasers of our ordinary shares between December 7, 2020 and November 10, 2021. We believe that the allegations contained in the complaint are without merit and are defending the case vigorously.
A decision to classify a country or territory or an industry as non-serviced is made after a careful analysis of business risks associated with such activity. • Limited service countries .
A decision to classify a country or territory or an industry as non-serviced is made after a careful analysis of business, legal and financial crime risks associated with such activity. • Limited service countries .
During the same period, we had a net loss of $0.1 billion and generated $443.9 million of Adjusted EBITDA See “Item 5.
During the same period, we had a net loss of $1.9 billion 41 and generated $410 million of Adjusted EBITDA See “Item 5.
Each of the Founder, Cannae LLC, the CVC Investors and the Blackstone Investors, to whom we refer collectively as the “Principal Shareholders,” are party to the Shareholders Agreement described in “Certain Relationships and Related Person Transactions—Certain Relationships and Related Person Transactions—Paysafe—Shareholders Agreement,” set forth in this report, pursuant to which, among other things, they have each agreed to vote in favor of their respective nominees to the Company Board.
A list of the significant subsidiaries of the Company is included in Exhibit 8.1 to this Report. 58 Each of the Founder, Cannae LLC, the CVC Investors and the Blackstone Investors, to whom we refer collectively as the “Principal Shareholders,” are party to the Shareholders Agreement described in “Certain Relationships and Related Person Transactions—Certain Relationships and Related Person Transactions—Paysafe—Shareholders Agreement,” set forth in this report, pursuant to which, among other things, they have each agreed to vote in favor of their respective nominees to the Company Board.
Users can sign up for our services at one of our proprietary online portals such as skrill.com , neteller.com and paysafecard.com . • Relationship & Call Center Sales— We have a direct sale force of 91 associates who build and develop relationships with larger merchants or respond to their inquiries via our dedicated sales centers that respond to calls or online inquiries.
Users can sign up for our services at one of our proprietary online portals such as skrill.com , neteller.com and paysafecard.com . • Relationship & Call Center Sales— We have a direct sales force that builds and develops relationships with larger merchants or responds to their inquiries via our dedicated sales centers that respond to calls or online inquiries.
In 2022, we generated approximately 55% of our revenue in North America, 33% in Europe, 7% in Latin America and 5% in the rest of the world, based on the region where a transaction was initiated or the merchant location.
In 2023, we generated approximately 56% of our revenue in North America, 32% in Europe, 7% in Latin America and 5% in the rest of the world, based on the region where a transaction was initiated or the merchant location.
Digital Wallets The Digital Wallets segment is the combination of our legacy Digital Wallet and eCash solutions and services markets primarily in Europe, UK, North America and Latin America. For the year ended 31 December 2022, this segment generated $21 billion of total payment volume, $686 million in revenue and $289 million in Adjusted EBITDA.
Digital Wallets The Digital Wallets segment is the combination of our legacy Digital Wallet and eCash solutions and services markets primarily in Europe, UK, North America and Latin America. For the year ended December 31, 2023, this segment generated $22 billion of total payment volume, $734 million in revenue and $319 million in Adjusted EBITDA.
Within Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) law is under consultation review in order to align more closely to GDPR and ensure continuation of its adequacy status from the European Commission and the provincial Quebec privacy law is being amended in 2023.
Within Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) law is under consultation review in order to align more closely to GDPR and ensure continuation of its adequacy status from the European Commission and the provincial Quebec privacy law was amended in 2023 and requires further registration for biometric processing.
Our Distribution & Sales We reach 19 million active users in more than 120 countries and over 250 thousand merchants across North America, Latin America and Europe.
Our Distribution & Sales In 2023, we reached 18 million active users in more than 120 countries and over 250 thousand merchants across North America, Latin America and Europe.
On January 21, 2022, a related complaint was brought by John Paul O’Brien also in the Southern District of New York which additionally named William P. Foley II as a defendant. We expect these complaints to be consolidated.
On January 21, 2022, a related complaint was brought by John Paul O’Brien also in the Southern District of New York which additionally named William P. Foley II as a defendant.
For the year ended 31 December 2022, this segment generated $110 billion of total payment volume, $817 million in revenue (inclusive of intersegment revenue) and $200 million in Adjusted EBITDA . We provide a comprehensive suite of payment acceptance and processing services enabling SMBs to accept payments in over 40 currencies through in store, online, or mobile channels.
For the year ended December 31, 2023, this segment generated $119 billion of total payment volume, $867 million in revenue and $222 million in Adjusted EBITDA . We provide a comprehensive suite of payment acceptance and processing services enabling SMBs to accept payments in over 40 currencies through in store, online, or mobile channels.
Accordingly, the Principal Shareholders constitute a group within the meaning of Section 13(d) of the Exchange Act representing approximately 47.5% of the outstanding voting securities of the Company. See “Item 7.A. Major Shareholders” and “Item 8.A. Consolidated Statements and Other Financial Information—Unaudited Pro Forma Combined Financial Information” for additional information. D. Property, Plants and Equipment “Item 4.B.
Accordingly, the Principal Shareholders constitute a group within the meaning of Section 13(d) of the Exchange Act representing approximately 47% of the outstanding voting securities of the Company. See “Item 7.A. Major Shareholders” and “Item 8.A. Consolidated Statements and Other Financial Information." D. Property, Plants and Equipment See “Item 4.B. Information on the Company—Business Overview—Properties” for additional information.
The mailing address of Paysafe Limited’s registered office is c/o M Q Services Ltd., Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda. The principal executive office is located at 25 Canada Square, 27th Floor, London, United Kingdom E14 5LQ and its telephone number is +44 (0) 207 608 8460. The Company’s principal website address is www.paysafe.com.
The mailing address of Paysafe Limited’s registered office is c/o M Q Services Ltd., Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda. The principal executive office is located at 2 Gresham Street London, United Kingdom EC2V 7AD and its telephone number is +44 (0) 207 608 8460. The Company’s principal website address is www.paysafe.com.
We encourage a strong client-centric mentality across all our functions to prioritize solving the friction and pain points that our clients experience when trying to conduct commerce online rather than trying to sell undifferentiated payment services.
We believe we have curated an attractive workplace environment for employees. We encourage a strong client-centric mentality across all our functions to prioritize solving the friction and pain points that our clients experience when trying to conduct commerce online rather than trying to sell undifferentiated payment services.
Additionally, the use or generation of biometric data as an aid to fraud prevention is becoming increasingly regulated through a patchwork of laws in both the EU and across the United States, with a number of state laws now requiring consent to such use. See “Item 3.D.
Additionally, the use or generation of biometric data as an aid to fraud prevention is becoming increasingly regulated through a patchwork of laws in both the EU and across the United States, with a number of state laws now requiring consent to such use. We have also seen recent privacy law developments within South America. See “Item 3.D.
We sell our solutions through a combination of direct and indirect sales strategies. We have a direct sales force of approximately 90 associates who build and develop relationships with larger merchants and help them configure or develop digital and point-of-sale commerce solutions from our suite of technology services.
We sell our solutions through a combination of direct and indirect sales strategies. We have a direct sales force that builds and develops relationships with larger merchants and helps them configure or develop digital and point-of-sale commerce solutions from our suite of technology services.
For the year ended December 31, 2022, we generated $130 billion of total payment volume and $1.5 billion in revenue. During the same period, we had a net loss of $1.9 billion and generated $410.0 million of Adjusted EBITDA. For the year ended December 31, 2021, we generated $122 billion of total payment volume and $1.5 billion in revenue.
For the year ended December 31, 2023, we generated $140 billion of total payment volume and $1.6 billion in revenue. During the same period, we had a net loss of $20 million and generated $459 million of Adjusted EBITDA. For the year ended December 31, 2022, we generated $130 billion of total payment volume and $1.5 billion in revenue.
E-money means electronically (including magnetically) stored monetary value, as represented by a claim on the electronic money issuer, which (a) is issued on receipt of funds for the purpose of making payment transactions; (b) is accepted by a person other than the electronic money issuer; and (c) is not excluded by regulation. 51 An e-money issuer is someone who issues and redeems electronic money and provides payment services in accordance with the Second Electronic Money Directive.
E-money means electronically (including magnetically) stored monetary value, as represented by a claim on the electronic money issuer, which (a) is issued on receipt of funds for the purpose of making payment transactions; (b) is accepted by a person other than the electronic money issuer; and (c) is not excluded by regulation.
Business Overview Overview Paysafe is one of the leaders in digital commerce with over $130 billion in volume processed in 2022 and $122 billion processed in 2021, generating approximately $1.5 billion in revenue in both 2022 and 2021.
Business Overview Overview 39 Paysafe is one of the leaders in digital commerce with over $140 billion in volume processed in 2023 and $130 billion processed in 2022, generating $1.6 billion in revenue in 2023 and $1.5 billion in revenue in 2022.
Certain other state laws impose similar privacy obligations as well and, in addition, all 50 states have laws with varying obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and others.
Some US state laws, like GDPR, are extra-territorial in nature and thus apply outside the USA. Certain other state laws impose similar privacy obligations as well and, in addition, all 50 states have laws with varying obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and others.
For the year ended December 31, 2022, we derived approximately 30% of our revenue directly or indirectly from processing transactions for merchants and customers in the online gambling sector. 55 Given the importance of the online gambling sector to our business, we expend significant time and resources to ensure that we have an in-depth understanding of the regulatory environment in the main territories in which our gambling industry merchants operate and customers reside, monitoring closely the developing regulatory regimes in those territories and adapting our business acceptance policies where necessary.
Given the importance of the online gambling sector to our business, we expend significant time and resources to ensure that we have an in-depth understanding of the regulatory environment in the main territories in which our gambling industry merchants operate and customers reside, monitoring closely the developing regulatory regimes in those territories and adapting our business acceptance policies where necessary.
In addition, nine large corporate and investment banks provide us with liquidity for our foreign exchange activities, with sizeable trading capacity Consumers in these and other verticals are also attracted to the differentiated functionality of our digital wallet and digital currency solutions that enable them to load funds onto a stored value account that can be used easily and flexibly online, through a mobile device or an integrated app.
Consumers in these and other verticals are also attracted to the differentiated functionality of our digital wallet and digital currency solutions that enable them to load funds onto a stored value account that can be used easily and flexibly online, through a mobile device or an integrated app.
We organize our business in two segments, Digital Wallets represented approximately $686 million or 45%, of our revenue and Merchant Solutions represented approximately $817 million, or 55%, of our revenue (inclusive of intersegment revenue) for the year ended December 31, 2022.
We organize our business in two segments, Digital Wallets represented approximately $734 million or 46%, of our revenue and Merchant Solutions represented approximately $867 million, or 54%, of our revenue for the year ended December 31, 2023.
While we manage our business holistically and in an integrated manner, we provide our solutions across two business segments to optimize our management of each.
While we manage our business holistically and in an integrated manner, we provide our solutions across two business segments to optimize our management of each. Our reportable segments are Merchant Solutions and Digital Wallets. Our reportable segments were revised as of December 31, 2022.
In addition, Skrill USA is subject to examination by the CFPB from time to time. The Dodd-Frank Act also empowers state attorneys general and other state officials to enforce federal consumer protection laws under specified conditions.
The Dodd-Frank Act also empowers state attorneys general and other state officials to enforce federal consumer protection laws under specified conditions.
Skrill USA may also be liable for failure of its agents to comply with the Dodd-Frank Act. The legislation and implementation of regulations associated with the Dodd-Frank Act have increased Skrill USA’s costs of compliance and required changes in the way it and its agents conduct business.
The legislation and implementation of regulations associated with the Dodd-Frank Act have increased Skrill USA’s costs of compliance and required changes in the way it and its agents conduct business. In addition, Skrill USA is subject to examination by the CFPB from time to time.
Where we classify a market as banned, such as Cuba, Iran, Iraq, Libya, North Korea and Syria, we decline any customers in that market (irrespective of whether the end user intends to use the products and services for gambling) and customers resident in other countries should not be able to access their accounts when present in any of the banned countries.
We decline any individual or entity located in that market (irrespective of whether the end user intends to use the products and services for gambling) and customers resident in other countries should not be able to access their accounts when present in any of the sanctioned countries.
In order for our Merchant Solutions business to process and settle transactions for our merchants, we have entered into sponsorship agreements with banks that are members of the payment systems.
The networks may fine, penalize or suspend the registration of participants for certain acts or omissions or the failure of the participants to comply with applicable rules and standards. 51 In order for our Merchant Solutions business to process and settle transactions for our merchants, we have entered into sponsorship agreements with banks that are members of the payment systems.
These same subsidiaries are also licensed as money service businesses with Revenu Quebec and are subject to record keeping requirements for all money transfers and foreign exchange transactions involving Quebec residents. In the United States, Skrill USA Inc. (“Skrill USA”), is registered with FinCEN as a money services business and regarded as a money transmission business.
Some of these subsidiaries are also licensed as money service businesses with Revenu Quebec and are subject to record keeping requirements for all money transfers and foreign exchange transactions involving Quebec residents.
We also lease a number of operations, business, data center and sales offices and facilities which include 17 offices in 17 countries and 7 data centers in countries. Our business is not capital intensive.
The principal executive office of the Company is located at 2 Gresham Street, 1st Floor, London, United Kingdom, EC2V 7AD. We also lease a number of operations, business, data center and sales offices and facilities which include 15 offices in 12 countries and 7 data centers. Our business is not capital intensive.
Participants are subject to audit by the payment networks to ensure compliance with applicable rules and standards. The networks may fine, penalize or suspend the registration of participants for certain acts or omissions or the failure of the participants to comply with applicable rules and standards.
Participants are subject to audit by the payment networks to ensure compliance with applicable rules and standards.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Outstanding trade receivables are regularly monitored to flag any unusual activities such as chargebacks. Having a significant number of consumers and merchants across multiple geographies and industries helps mitigate the Group’s exposure to concentration risk. Through the Group’s global credit risk framework we forecast, under normal business conditions, the probability of the occurrence of credit events before they occur.
Outstanding trade receivables are regularly monitored to flag any unusual activities such as chargebacks. Having a 69 significant number of consumers and merchants across multiple geographies and industries helps mitigate the Group’s exposure to concentration risk. Through the Group’s global credit risk framework we forecast, under normal business conditions, the probability of the occurrence of credit events before they occur.
The primary services offered by the Company to its customers comprise a series of distinct performance obligations that are substantially similar with the same pattern of transfer. Hence, these services are considered a single performance obligation and revenue is recognized as the Company satisfies its performance obligation by transferring control over the service to a customer.
The primary services offered by the Company to its customers comprise a series of distinct performance obligations that are substantially the same with the same pattern of transfer. Hence, these services are considered a single performance obligation and revenue is recognized as the Company satisfies its performance obligation by transferring control over the service to a customer.
Subject to any applicable limitations contained in the agreements governing our indebtedness, 72 any such purchases may be funded by existing cash or by incurring new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material.
Subject to any applicable limitations contained in the agreements governing our indebtedness, any such purchases may be funded by existing cash or by incurring new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material.
The Company also has a corresponding liability to its customers recognized in our Consolidated Statements of Financial Position as funds payable and amounts due to customers, as well as settlement receivables, net, that represent timing differences in the Group’s settlement process between the cash settlement of a transaction and the recognition of the associated liability.
The Company also has a corresponding liability to its customers recognized in our Consolidated Statements of Financial Position as funds payable and amounts due to customers, as well as settlement receivables, net, that represent timing differences in the settlement process between the cash settlement of a transaction and the recognition of the associated liability.
Accounting Pronouncements Not Yet Adopted Recently issued accounting pronouncements that may be relevant to our operations but have not yet been adopted are outlined in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, within Item 18, Financial Statements appearing elsewhere in this Report. 77
Accounting Pronouncements Not Yet Adopted Recently issued accounting pronouncements that may be relevant to our operations but have not yet been adopted are outlined in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, within Item 18, Financial Statements appearing elsewhere in this Report.
This is used by management as an indication of pricing or product mix trends over time rather than absolute pricing within each segment, due to the mix of product types and pricing agreements that will be in place with specific merchants.
This is used by management as an indication of pricing or product mix trends over time rather than absolute pricing within each segment, 63 due to the mix of product types and pricing agreements that will be in place with specific merchants.
General and administrative expenses are comprised of expenses associated with 63 operational and supporting personnel-related costs, including salaries and benefits, as well as credit losses on financial assets, corporate management, information technology, office infrastructure, external professional services and other activities.
General and administrative expenses are comprised of expenses associated with operational and supporting personnel-related costs, including salaries and benefits, as well as credit losses on financial assets, corporate management, information technology, office infrastructure, external professional services and other activities.
Loss / (gain) on disposal of subsidiaries and other assets, net During the year ended December 31, 2022, PAYS Services UK Limited, a subsidiary of the Company, disposed of 100% of the equity interest of Pay Services India, LLC. The loss on disposal of subsidiaries recognized in 2022 relates to the sale of Pay Services India, LLC.
Loss on disposal of subsidiaries and other assets, net During the year ended December 31, 2022, PAYS Services UK Limited, a subsidiary of the Company, disposed of 100% of the equity interest of Pay Services India, LLC. The loss on disposal of subsidiaries recognized in 2022 relates to the sale of Pay Services India, LLC.
Restructuring and other costs Restructuring and other costs include acquisition costs related to the Company’s merger and acquisition activity, restructuring costs, provision related to customer payments and professional consulting and, in prior years, advisory fees related to public company readiness activities. This includes certain professional advisory costs, office closure costs and resulting severance payments to certain executives.
Restructuring and other costs Restructuring and other costs include acquisition costs related to the Company’s merger and acquisition activity, restructuring costs, and professional consulting and, in prior years, provision related to customer payments, advisory fees related to public company 62 readiness activities. This includes certain professional advisory costs, office closure costs and resulting severance payments to certain executives.
Key Performance Indicators We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions. We believe that these key performance indicators are useful in understanding the underlying trends in the Company’s businesses. 64 There are limitations inherent in key performance indicators.
Key Performance Indicators We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections and make strategic decisions. We believe that these key performance indicators are useful in understanding the underlying trends in the Company’s businesses. There are limitations inherent in key performance indicators.
Such amounts are recorded as an asset in our Consolidated Statements of Financial Position, in customer accounts and other restricted cash which is presented as part of cash, cash equivalents, customer accounts and other restricted cash as reported in the Consolidated Statements of Cash Flows.
Such amounts are recorded as an asset in our Consolidated Statements of Financial Position, in customer accounts and other restricted cash, net which is presented as part of cash, cash equivalents, customer accounts and other restricted cash, net as reported in the Consolidated Statements of Cash Flows.
The Paysafecard and Paysafecash brands provide consumers with a safe and easy way to purchase goods and services online without the need for a bank account or credit card and allow merchants to expand their target market to include consumers who prefer to pay with cash. 61 Trends and Factors Affecting Our Future Performance Significant trends and factors that we believe may affect our future performance include the items noted below.
The Paysafecard and Paysafecash brands provide consumers with a safe and easy way to purchase goods and services online without the need for a bank account or credit card and allow merchants to expand their target market to include consumers who prefer to pay with cash. 60 Trends and Factors Affecting Our Future Performance Significant trends and factors that we believe may affect our future performance include the items noted below.
The combination of this breadth of solutions, our sophisticated risk management and our deep regulatory expertise and deep industry knowledge across specialized verticals enables us to empower 19 million active users in more than 120 countries and over 250,000 SMBs to conduct secure and friction-less commerce across online, mobile, in-app and in-store channels.
The combination of this breadth of solutions, our sophisticated risk management and our deep regulatory expertise and deep industry knowledge across specialized verticals enables us to empower 18 million active users in more than 120 countries and over 250,000 SMBs to conduct secure and friction-less commerce across online, mobile, in-app and in-store channels.
During the years ended December 31, 2022 and 2021, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, other than letters of credit and financial guarantee contracts entered into in the ordinary course of business.
During the years ended December 31, 2023 and 2022, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, other than letters of credit and financial guarantee contracts entered into in the ordinary course of business.
Due to a sustained decline in stock price and market capitalization, as well as current market and macroeconomic conditions, goodwill impairment expense of $1,159,145 and $723,042 was recognized in Merchant Solutions and Digital Wallets, respectively during the year ended December 31, 2022.
For the year ended December 31, 2022, due to a sustained decline in stock price and market capitalization, as well as current market and macroeconomic conditions, goodwill impairment expense of $1,159,145 and $723,042 was recognized in Merchant Solutions and Digital Wallets, respectively.
Operating Activities Net cash flows provided by (used in) operating activities mainly consists of our net loss adjusted for non-cash items and movements in working capital. Non-cash items usually arise as a result of timing differences between expenses recognized and actual cash costs incurred or as a result of other non-cash income or expenses.
Cash Flow Operating Activities Net cash flows provided by operating activities mainly consists of our net loss adjusted for non-cash items and movements in working capital. Non-cash items usually arise as a result of timing differences between expenses recognized and actual cash costs incurred or as a result of other non-cash income or expenses.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material and adverse effect on our net revenues, income, 72 profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
A discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2021, compared to the fiscal year ended December 31, 2020, unless otherwise noted, can be found under Item 5 in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022, which is available on the SEC’s website at www.sec.gov and on the SEC Filings section of the Investors section of our website at: https://ir.paysafe.com/regulatory-filings.
A discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2022, compared to the fiscal year ended December 31, 2021, unless otherwise noted, can be found under Item 5 in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 15, 2023, which is available on the SEC’s website at https://www.sec.gov and on the SEC Filings section of the Investors section of our website at: https://ir.paysafe.com/regulatory-filings .
For the year ended December 31, 2022, net cash flows provided by operating activities of $924,078 primarily consists of a net loss of $1,862,284 adjusted for non-cash items of $2,112,202, largely driven by depreciation and amortization of $266,819 and impairment expense on goodwill and intangible assets of $1,887,223, and share-based compensation of $62,354, offset by deferred tax benefit of $82,876.
For the year ended December 31, 2022, net cash flows provided by operating activities of $237,201 primarily consists of a net loss of $1,862,284 adjusted for non-cash items of $2,112,202, largely driven by depreciation and amortization of $266,819, impairment expense on goodwill and intangible assets of $1,887,223, and share-based compensation of $62,354, offset by deferred tax benefit of $82,876.
Some of the limitations of Adjusted EBITDA are: • It does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • It does not reflect changes in, or cash requirements for, our working capital needs; • It does not reflect the interest expense or the cash requirements to service interest or principal payments on debt; • It does not reflect income tax payments we are required to make; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • Other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
We do not use or present Adjusted EBITDA as a measure of liquidity or cash flow. 64 Some of the limitations of Adjusted EBITDA are: • It does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • It does not reflect changes in, or cash requirements for, our working capital needs; • It does not reflect the interest expense or the cash requirements to service interest or principal payments on debt; • It does not reflect income tax payments we are required to make; • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • Other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
For the year ended December 31, 2022, other expense, net includes fair value gain of warrant liabilities of $32,481, gain on foreign exchange of $38,289, fair value loss on contingent consideration of $9,075, fair value gain on derivative instruments of $17,321, gain on debt repurchases of $11,534 and other costs of $6,772.
For the year ended December 31, 2022, other expense, net includes fair value gain of warrant liabilities of $32,481, gain on foreign exchange of $38,289, fair value loss on contingent consideration of $9,075, gain on debt repurchases of $11,534, gain on derivative instruments of $17,458 and other costs of $6,909.
A weakening of the U.S. dollar by 1% against the above currencies would have had an equal and opposite effect.
A weakening of the U.S. dollar by 10% against the above currencies would have had an equal and opposite effect.
As a result of the relative size of our international operations, these fluctuations may be material. During the year ended December 31, 2022, our Digital Wallets segment was impacted by unfavorable foreign exchange. On a net basis, foreign exchange gains on external debt offset operational foreign exchange losses.
As a result of the relative size of our international operations, these fluctuations may be material. During the year ended December 31, 2023, our Digital Wallets segment was impacted by favorable foreign exchange. On a net basis, foreign exchange losses on external debt offset operational foreign exchange gains.
Selling, general and administrative Selling, general and administrative consists primarily of employee related costs, including salaries and benefits, credit losses, information technology expenses and other administrative costs as noted below. Selling expenses are comprised of sales and marketing personnel-related costs, including salaries, and benefits.
Selling, general and administrative Selling, general and administrative consists primarily of employee related costs, including salaries and benefits, share based compensation, credit losses, information technology expenses and other administrative costs as noted below. Selling expenses are comprised of sales and marketing personnel-related costs, including salaries, and benefits.
Intercompany funding is typically undertaken in the functional currency of the operating entities or undertaken to ensure offsetting currency exposures. As of December 31, 2022, had the U.S. dollar strengthened by 1% in relation to all the other currencies, with all other variables held constant, the net assets of the Company would have decreased by $2.5 million.
Intercompany funding is typically undertaken in the functional currency of the operating entities or undertaken to ensure offsetting currency exposures. As of December 31, 2023, had the U.S. dollar strengthened by 10% in relation to all the other currencies, with all other variables held constant, the net assets of the Company would have decreased by $27.5 million.
Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2022, we had $34,481 of net deferred tax assets in the UK.
Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2023, we had $17,849 of net deferred tax assets in the UK.
Changes in assumptions or circumstances, including increases in the discount rate, decreases in the exit multiple or a sustained decline in our stock price, could result in a material impairment of goodwill in future periods. Finite-lived Intangible Assets We regularly review finite-lived intangible assets, such as brands, computer software and customer relationships, for impairment.
Changes in assumptions or circumstances, including increases in the discount rate, sustained decline in our stock price, or reduced forecast revenue and earnings could result in a material impairment of goodwill in future periods. Finite-lived Intangible Assets We regularly review finite-lived intangible assets, such as brands, computer software and customer relationships, for impairment.
Consequently, no liabilities have been recorded for these obligations on our Consolidated Statements of Financial Position for any of the periods presented. 74 We periodically become a party to litigation proceedings arising in the normal course of our business operations.
Consequently, with the exception of estimated credit losses, no liabilities have been recorded for these obligations on our Consolidated Statements of Financial Position for any of the periods presented. We periodically become a party to litigation proceedings arising in the normal course of our business operations.
Movements in working capital include the movements in: accounts receivable, net; prepaid expenses, other current assets and related party receivables; settlement receivables, net; accounts payable, other liabilities, related party payables; funds payable and amounts due to customers; and income tax payable / (receivable). Movements in working capital are affected by several factors including the timing of month-end and transaction volume.
Movements in working capital include the movements in: accounts receivable, net; prepaid expenses, other current assets and related party receivables; accounts payable, other liabilities, and income tax payable / (receivable). Movements in working capital are affected by several factors including the timing of month-end and transaction volume.
As discussed in Note 4, Taxation , within Item 18, Financial Statements as of December 31, 2022 the Company has $16,769 of liabilities associated with uncertain tax positions in the various jurisdictions in which the Company conducts operations.
As discussed in Note 4, Taxation , within Item 18, Financial Statements as of December 31, 2023 the Company has $8,035 of liabilities associated with uncertain tax positions in the various jurisdictions in which the Company conducts operations.
Due to the interest rate floors within the Company’s facility agreement of 0.5% on USD LIBOR and 0% on EURIBOR, we may not realize the benefit of a decrease of 100 basis points in the applicable interest rates.
Due to the interest rate floors within the Company’s facility agreement of 0.5% on USD SOFR and 0% on EURIBOR, we may not realize the benefit of a decrease of 10% in the applicable interest rates.
Factors that could cause such differences are discussed in “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” 60 A discussion regarding our financial condition and results of operation for the fiscal year ended December 31, 2022, compared to the fiscal year ended December 31, 2021, is presented below.
Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause such differences are discussed in “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” A discussion regarding our financial condition and results of operation for the fiscal year ended December 31, 2023, compared to the fiscal year ended December 31, 2022, is presented below.
Loss on disposal of subsidiaries and other assets, net Loss on disposal of subsidiaries and other assets, net was $1,359 for the year ended December 31, 2022 which was related to the disposal of Pay Services India, LLC.
Loss on disposal of subsidiaries and other assets, net Loss on disposal of subsidiaries and other assets, net was $386 for the year ended December 31, 2023 compared to $1,359 for the year ended December 31, 2022. The loss in the prior year was related to the disposal of Pay Services India, LLC.
This includes certain professional advisory costs, office closure costs and resulting severance payments to employees. For the year ended December 31, 2022 , restructuring costs were $13,393, inclusive of CEO severance costs, and other costs were $50,739, which primarily consisted of a $33,603 provision related to certain customer payments and acquisition costs.
For the year ended December 31, 2022, restructuring costs were $13,393, inclusive of CEO severance costs, and other costs were $50,739, which primarily consisted of a $33,603 provision related to certain customer payments and acquisition costs.
Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance to reduce our UK deferred tax assets may be required, which materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements.
Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance to reduce our UK deferred tax assets may be required, which may materially increase our expenses in the period in which we recognize the allowance.
Operations within Russia and Ukraine represented approximately 1% of our revenues in the prior year and were predominantly within the Digital Wallets segment. For year ended December 31, 2022, we have experienced a decline in revenues from there impact of war-regions on the Digital Wallets segment.
Operations within Russia, Ukraine and Israel represented approximately 1% of our revenues and were predominantly within the Digital Wallets segment. For year ended December 31, 2023, we have not experienced significant decline in revenues from the impact of war-regions on the Digital Wallets segment.
As a result, the Company presents revenue for its Merchant Solutions segment net of the interchange fees charged by the card issuing financial institutions and the fees charged by the payment networks. Another area of significant judgment involves determining whether goods and services are considered distinct performance obligations that should be accounted for separately, or together as one performance obligation.
As a result, the Company presents revenue for its Digital Wallets segment gross of interchange fees and fees charged by payment networks. 73 Another area of significant judgment involves determining whether goods and services are considered distinct performance obligations that should be accounted for separately, or together as one performance obligation.
In addition, any such purchases made at prices below the “adjusted issue price” (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which may be material, and result in related adverse tax consequences to us. Cash Flow The following table presents the summary consolidated cash flow information for the period presented.
In addition, any such purchases made at prices below the “adjusted issue price” (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which may be material, and result in related adverse tax consequences to us.
Business Combinations The valuation of assets acquired in a business combination requires the use of significant estimates and assumptions. The acquisition method of accounting for business combinations requires us to estimate the fair value of assets acquired and liabilities assumed to properly allocate purchase price consideration between assets that are amortized and goodwill.
The acquisition method of accounting for business combinations requires us to estimate the fair value of assets acquired and liabilities assumed to properly allocate purchase price consideration between assets that are amortized and goodwill.
Operating Results Our Company Paysafe is a leading, global pioneer in digital commerce with over $130 billion in volume processed in 2022 and $122 billion processed in 2021, generating $1.5 billion in revenue in both 2022 and 2021.
Operating Results Our Company Paysafe is a leading, global pioneer in digital commerce with over $140 billion in volume processed in 2023 and $130 billion on processed in 2022, generating $1.6 billion in revenue in 2023 and $1.5 billion in revenue in 2022.
Complex arrangements with nonstandard terms and conditions may require significant contract interpretation to determine the appropriate accounting. An area of significant judgment for the Company is the determination of the principal agent consideration.
Complex arrangements with nonstandard terms and conditions may require significant contract interpretation to determine the appropriate accounting. An area of significant judgment for the Company is the determination of the principal agent consideration as it relates to the payment processing services provided by the Company.
In the fourth quarter of 2022, we revised our reportable segments, which are the same as our operating segments, as a result of a change in our Chief Operating Decision Maker (“CODM”) and how our CODM regularly reviews financial information to allocate resources and assess performance. Our new reportable segments are Merchant Solutions and Digital Wallets.
In the fourth quarter of 2022, we revised our reportable segments, which are the same as our operating segments, as a result of a change in our Chief Operating Decision Maker (“CODM”) and how our CODM regularly reviews financial information to allocate resources and assess performance. The prior year information has been revised to reflect this change.
We sell our solutions through a combination of direct and indirect sales strategies. We have a direct sales force of approximately 90 associates who build and develop relationships with larger merchants and help them configure or develop digital and point-of-sale commerce solutions from our suite technology services.
We sell our solutions through a combination of direct and indirect sales strategies. We have a direct sales force that builds and develops relationships with larger merchants and helps them configure or develop digital and point-of-sale commerce solutions from our suite technology services.
Our reportable segments are the same as our operating segments. Adjusted EBITDA at the segment level is reported to the Chief Operating Decision Maker for purposes of making decisions about allocating resources to the segments and assessing their performance.
Analysis by Segment We operate in two operating segments: Merchant Solutions and Digital Wallets. Our reportable segments are the same as our operating segments. Adjusted EBITDA at the segment level is reported to the Chief Operating Decision Maker for purposes of making decisions about allocating resources to the segments and assessing their performance.
The Company does not have the ability to direct the use of and obtain substantially all the benefits from the services provided by the card issuing financial institutions and payment networks before those services are transferred to the customer.
The Company does not have the ability to direct the use of and obtain substantially all the benefits from the services provided by these parties before those services are transferred to the customer.
For further explanation on the year-over-year change on these financial statement line items, please refer to the commentary above in “Results of Operations.” A reconciliation of Net loss to Adjusted EBITDA is as follows for the years ended December 31, 2022 and 2021: 68 Year Ended December 31, (U.S. dollars in thousands) 2022 2021 Net Loss $ (1,862,284 ) $ (110,328 ) Income tax benefit (52,502 ) (85,110 ) Interest expense, net 126,628 165,827 Depreciation and amortization 266,819 261,372 Share-based compensation 62,354 101,770 Impairment expense on goodwill and intangible assets 1,887,223 324,145 Restructuring and other costs (1) 64,132 25,883 Loss on disposal of subsidiaries and other assets, net 1,359 — Other income, net (2) (83,778 ) (239,661 ) Adjusted EBITDA $ 409,951 $ 443,898 (1) As noted above, restructuring and other costs include acquisition costs related to the Company’s merger and acquisition activity and restructuring costs.
For further explanation on the year-over-year change on these financial statement line items, please refer to the commentary above in “Results of Operations.” A reconciliation of Net loss to Adjusted EBITDA is as follows for the years ended December 31, 2023 and 2022: Year Ended December 31, (U.S. dollars in thousands) 2023 2022 Net Loss $ (20,251 ) $ (1,862,284 ) Income tax expense / (benefit) 40,840 (52,502 ) Interest expense, net 151,148 126,628 Depreciation and amortization 263,433 266,819 Share-based compensation 28,873 62,354 Impairment expense on goodwill and intangible assets 1,254 1,887,223 Restructuring and other costs (1) 6,061 64,132 Loss on disposal of subsidiaries and other assets, net 386 1,359 Other income, net (2) (13,081 ) (83,778 ) Adjusted EBITDA $ 458,663 $ 409,951 (1) As noted above, restructuring and other costs include acquisition costs related to the Company’s merger and acquisition activity and restructuring costs.
As of December 31, 2021, an increase of 100 basis points in interest rates offered on the bank borrowings would result in a $18.2 million unfavorable impact on net loss while a decrease of 100 basis points would result in a $18.2 million favorable impact on net earnings related to the Company’s borrowings.
As of December 31, 2023, an increase of 100 basis points in interest rates offered on the bank borrowings would result in a $16.0 million unfavorable impact on net loss and a decrease of 100 basis points would have an equal and opposite effect on net earnings related to the Company’s borrowings.
Our estimates are based on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our consolidated financial statements are described below.
We evaluate our critical accounting policies and estimates on an ongoing basis. Our estimates are based on historical experience, current conditions and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Our results by operating segment for the year ended December 31, 2022 comprised of the following: (U.S. dollars in thousands) Merchant Solutions Digital Wallets Corporate (2) Intersegment Total Revenue $ 817,353 $ 686,165 $ — $ (7,381 ) $ 1,496,137 Adjusted EBITDA (1) $ 200,304 $ 289,413 $ (79,766 ) $ — $ 409,951 (1) For a reconciliation of the Company’s net loss to Adjusted EBITDA for the period presented, see “Results of Operations.” (2) Corporate consists of corporate overhead and unallocated shared costs of people and other resources consumed in activities that provide a benefit across the Company.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Our results by operating segment for the year ended December 31, 2023 comprised of the following: (U.S. dollars in thousands) Merchant Solutions Digital Wallets Corporate (2) Intersegment Total Revenue $ 878,346 $ 734,669 $ — $ (11,877 ) $ 1,601,138 Adjusted EBITDA (1) $ 222,154 $ 318,706 $ (82,197 ) $ — $ 458,663 (1) For a reconciliation of the Company’s net loss to Adjusted EBITDA for the period presented, see “Results of Operations.” (2) Corporate consists of corporate overhead and unallocated shared costs of people and other resources consumed in activities that provide a benefit across the Company. 67 Our results by operating segment for the year ended December 31, 2022 comprised of the following: (U.S. dollars in thousands) Merchant Solutions Digital Wallets Corporate (2) Intersegment Total Revenue $ 817,353 $ 686,165 $ — $ (7,381 ) $ 1,496,137 Adjusted EBITDA (1) $ 200,304 $ 289,413 $ (79,766 ) $ - $ 409,951 (1) For a reconciliation of the Company’s net loss to Adjusted EBITDA for the period presented, see “Results of Operations.” (2) Corporate consists of corporate overhead and unallocated shared costs of people and other resources consumed in activities that provide a benefit across the Company The increase (decrease) in results by operating segment is shown in the following table: (U.S. dollars in thousands) Merchant Solutions Digital Wallets Corporate (2) Intersegment Total Revenue $ 60,993 $ 48,504 $ — $ (4,496 ) $ 105,001 Adjusted EBITDA (1) $ 21,850 $ 29,293 $ (2,431 ) $ - $ 48,712 (1) For a reconciliation of the Company’s net loss to Adjusted EBITDA for the period presented, see “Results of Operations.” (2) Corporate consists of corporate overhead and unallocated shared costs of people and other resources consumed in activities that provide a benefit across the Company .
The following table sets forth our gross dollar volume and take rate for the years ended December 31, 2022 and 2021: For the year ended December 31, 2022 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 110,080 $ 20,603 $ (541 ) $ 130,142 Take Rate 0.7 % 3.3 % 1.4 % 1.1 % For the year ended December 31, 2021 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 100,001 $ 23,070 $ (718 ) $ 122,353 Take Rate 0.7 % 3.3 % 1.2 % 1.2 % Increase / (Decrease) - 2022 vs 2021 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 10,079 $ (2,467 ) $ 177 $ 7,789 Take Rate 0.0 % 0.0 % 0.2 % (0.1 )% (1) Volumes for the year ended December 31, 2022 exclude embedded finance related volumes of $37.5 billion.
The following table sets forth our gross dollar volume and take rate for the years ended December 31, 2023 and 2022: For the year ended December 31, 2023 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 118,675 $ 22,445 $ (906 ) $ 140,214 Take Rate 0.7 % 3.3 % 1.3 % 1.1 % For the year ended December 31, 2022 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 110,080 $ 20,603 $ (541 ) $ 130,142 Take Rate 0.7 % 3.3 % 1.4 % 1.1 % Increase / (Decrease) - 2023 vs 2022 (U.S. dollars in millions) Merchant Solutions Digital Wallets Intersegment Total Gross dollar volume (1) $ 8,595 $ 1,842 $ (365 ) $ 10,072 Take Rate 0.0 % 0.0 % (0.1 )% 0.0 % (1) Volumes for the year ended December 31, 2023 and 2022 exclude embedded finance related volumes of $20.5 billion and $37.5 billion, respectively.
For the years ended December 31, 2022 and 2021, intangible asset impairments of $5,036 and $324,145 were recognized within the Merchant Solutions and Digital Wallets segments. Failure to achieve expected cash flows , obsolescence or other factors may result in additional material impairments of intangible assets in future periods.
For the years ended December 31, 2023 and 2022, intangible asset impairments of $1,254 and $5,036 were recognized within the Merchant Solutions and Digital Wallets segments. Reduced earnings, loss of key customer relationships, obsolescence or other factors may result in additional material impairments of intangible assets in future periods.
The increase was primarily driven by a $33,603 provision recorded during the year ended December 31, 2022 related to certain customer payments and an increase in restructuring costs of $2,746 during the year ended December 31, 2022.
The decrease was primarily driven by a $33,603 provision recorded during the year ended December 31, 2022 related to certain customer payments as well as acquisition costs related to the SafetyPay acquisition and higher restructuring spend during the year ended December 31, 2022.
Our primary financial covenant is to maintain a first lien debt ratio below 7.5x a Last Twelve Months EBITDA measure adjusted for certain items as stipulated in the company’s facilities agreement. As of December 31, 2022 and 2021, the Company was in compliance with all financial covenants associated with its debt.
Our key debt covenant governing these facilities is financial and is monitored monthly. Our primary financial covenant is to maintain a first lien debt ratio below 7.5x a Last Twelve Months EBITDA measure adjusted for certain items as stipulated in the company’s facilities agreement.
This increase is primarily attributed to net cash outflow on acquisition of subsidiaries of $424,722 for the year ended December 31, 2022, from an outflow of $263,520 for the year ended December 31, 2021.
This decrease is primarily attributed to net cash outflow on acquisition of subsidiaries for the year ended December 31, 2022 related to the acquisition of SafetyPay.
This increase was offset by an increase in cost of services (excluding depreciation and amortization) of $46,259, or 12.5% for the year ended December 31, 2022 largely due to higher volumes as well as higher technology costs and credit losses.
This increase was offset by an increase in cost of services (excluding depreciation and amortization) of $51,878, or 12.4% for the year ended December 31, 2023 largely due to higher volumes as well as an increase in legal and professional fees and marketing expenses.
The company does not apply hedge accounting for its derivative financial instruments. Interest Rate Risk We are exposed to interest rate risk relating to our borrowings and investment revenue. The Company actively manages interest rate risk through the use of interest rate swaps and caps.
The Company utilizes derivative financial instruments to manage interest rate risk on its variable rate debt facilities and term loans. The company does not apply hedge accounting for its derivative financial instruments. Interest Rate Risk We are exposed to interest rate risk relating to our borrowings and investment revenue.
The percentage by which the fair value of the US Acquiring, IES and Digital Wallet reporting units exceeded the carrying value is 3%, 9%, and 3% , respectively based on the most recent goodwill impairment analysis performed.
The percentage by which the fair value of the Digital Wallets reporting unit exceeded the carrying value is 1%, based on the most recent goodwill impairment analysis performed.
Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP, which often require us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our critical estimates and assumptions on an ongoing basis.
E. Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which often require the judgment of management in the selection and application of certain accounting principles and requires us to make estimates that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. 76 Goodwill Goodwill is tested for impairment at least annually at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations.
Income tax (benefit)/expense Income tax (benefit)/expense represents income taxes generated in the United Kingdom and numerous foreign jurisdictions. These foreign jurisdictions have different statutory tax rates than the United Kingdom.
Interest expense, net Interest expense, net primarily consists of the interest associated with our outstanding debt obligations and the amortization of debt issuance costs. Income tax (benefit)/expense Income tax (benefit)/expense represents income taxes generated in the United Kingdom and numerous foreign jurisdictions. These foreign jurisdictions have different statutory tax rates than the United Kingdom.
As of December 31, 2022 and 2021, the total principal amount of our external borrowings was $2,658,023 and $2,794,108. Subject to the limits contained in the credit agreements that govern our credit facilities, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.
Subject to the limits contained in the credit agreements that govern our credit facilities, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. All interest and mandatory debt repayments were satisfied during the years ended December 31, 2023 and 2022.
Financing Activities Net cash provided used in / provided by financing activities changed $563,823 to an outflow of $80,542 for the year ended December 31, 2022 from an inflow of $483,281 for the year ended December 31, 2021.
Financing Activities Net cash used in / provided by financing activities changed $1,377,363 to an outflow of $771,028 for the year ended December 31, 2023 from an inflow of $606,335 for the year ended December 31, 2022.
We control and monitor both cash levels and cash flow on a regular basis, including forecasting future cash flows. Our objective to managing liquidity is to ensure that, as far as possible, we always have sufficient liquidity to meet our liabilities as they become due.
Liquidity Risk Liquidity risk is the risk that we may be unable to meet our financial obligations as they fall due. We control and monitor both cash levels and cash flow on a regular basis, including forecasting future cash flows.
We do not regard the non-GAAP measure as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or the one calculated using a financial measure that is calculated in accordance with GAAP. 65 Adjusted EBITDA Adjusted EBITDA is defined as net income/(loss) before the impact of income tax (benefit)/expense, interest expense, net, depreciation and amortization, share-based compensation expense, impairment expense on goodwill and intangible assets, restructuring and other costs, loss/(gain) on disposal of subsidiaries and other assets, net, and other (expense)/income, net.
Adjusted EBITDA Adjusted EBITDA is defined as net income/(loss) before the impact of income tax (benefit)/expense, interest expense, net, depreciation and amortization, share-based compensation expense, impairment expense on goodwill and intangible assets, restructuring and other costs, loss/(gain) on disposal of subsidiaries and other assets, net, and other (expense)/income, net.
Our most significant contractual obligations relate to the principal outstanding amount of the Company’s debts, including interest payments, and operating lease obligations. For further information on these contractual obligations, see Note 9, Debt , and Note 18, Leases, within Item 18, Financial Statements included elsewhere in this Report.
For further information on these contractual obligations, see Note 9, Debt , and Note 18, Leases, within Item 18, Financial Statements included elsewhere in this Report.
Other (expense)/income, net Other (expense)/income, net consists primarily of foreign exchange gains and losses, gains on loan note repurchases and fair value movement in contingent consideration, derivative instruments and warrants. Interest expense, net Interest expense, net primarily consists of the interest associated with our outstanding debt obligations and the amortization of debt issuance costs.
The loss on disposal in 2023 relates to the disposition of certain equipment. Other income, net Other income, net consists primarily of foreign exchange gains and losses, gains on loan note repurchases and fair value movement in contingent consideration, derivative instruments and warrants.
Liquidity and Capital Resources Our primary sources of liquidity have been funds generated from operations, issuance of debt, the use of our revolving credit facilities and a line of credit. We assess our liquidity through an analysis of our working capital together with our other sources of liquidity.
We monitor liquidity levels within our regulated entities on an ongoing basis, in accordance with our liquidity and capital adequacy assessment framework. B. Liquidity and Capital Resources Our primary sources of liquidity have been funds generated from operations, issuance of debt, the use of our revolving credit facilities and a line of credit.
The exit multiples are determined based on comparable companies’ transaction multiples and discounted based on business-specific considerations. Discount rate assumptions are based on determining a cost of debt and equity, followed by an assessment as to whether there are risks not adjusted for in the future cash flows of the respective reporting unit.
The cash flow forecast, including long term growth rates, considers past experience and future market expectations. Discount rate assumptions are based on determining a cost of debt and equity and an assessment as to whether there are risks not adjusted for in the future cash flows of the respective reporting unit.
Any resulting changes identified subsequent to the measurement period are recognized in earnings and could have a material effect on our results of operations.
Any resulting changes identified subsequent to the measurement period are recognized in earnings and could have a material effect on our results of operations. In the current year, the Company did not complete any business combinations. Revenue Recognition Application of the accounting principles in GAAP related to the measurement and recognition of revenue requires us to make certain judgments.
Borrowings and repayments on all facilities were $917,269 and $920,519, respectively, for the year ended December 31, 2022 and $3,562,112, and $4,033,206, respectively for the year ended December 31, 2021.
Borrowings and repayments on all facilities, excluding voluntary repurchases, were $1,025,597 and $1,021,724, respectively, for the year ended December 31, 2023 and $917,269 and $920,519, respectively for the year ended December 31, 2022.
These adjustments include certain costs and transactions that are not reflective of the underlying operating performance of the Company. Management believes these adjustments improve the comparability of operating results across reporting periods. For the year ended December 31, 2022 and 2021, Adjusted EBITDA excludes the impact of share-based compensation expense.
These adjustments include certain costs and transactions that are not reflective of the underlying operating performance of the Company. Management believes these adjustments improve the comparability of operating results across reporting periods. We use Adjusted EBITDA as our measure of segment profitability to assess the performance of our businesses.
Impairment expense on goodwill and intangible assets Impairment expense on goodwill and intangible assets increased by $1,563,078 or 482.2%, to $1,887,223 for the year ended, December 31, 2022 from $324,145 for the year ended December 31, 2021.
Impairment expense on goodwill and intangible assets Impairment expense on goodwill and intangible assets decreased by $1,885,969 or 99.9%, to $1,254 for the year ended, December 31, 2023 from $1,887,223 for the year ended December 31, 2022. For the year ended December 31, 2023, no goodwill impairment was recognized.
In order to mitigate short-term liquidity risk and fund future merger and acquisition activity, we have a $305,000 revolving credit facility available, from which we make draw downs and repayments throughout the period. The balance drawn on the revolving credit facility as of December 31, 2022 and 2021 was $21,408 and $28,423, respectively.
Our objective to managing liquidity is to ensure that, as far as possible, we always have sufficient liquidity to meet our liabilities as they become due. In order to mitigate short-term liquidity risk and fund future merger and acquisition activity, we have a $305,000 revolving credit facility available, from which we make draw downs and repayments throughout the period.
This decrease was largely due to reduced revenues as noted above as well as an increase in personnel costs from acquisitions, and higher technology costs, partly offset by a decrease in cost of services (excluding depreciation and amortization) by $32,987 or 13.9% for the year ended December 31, 2022 and a decrease in marketing expenses.
Adjusted EBITDA increased by $29,293 or 10.1%, to $318,706 for the year ended December 31, 2023 from $289,413 for the year ended December 31, 2022. This increase was largely due to increased revenues as noted above, partly offset by an increase in personnel cost, technology cost and marketing expenses.
The reporting units with a fair value not substantially in excess of their carrying value included US Acquiring and IES (within the Merchant Solutions segment), and Digital Wallet (within the Digital Wallets segment), which had goodwill balances of $576,898, $60,548, and $282,657, respectively as of December 31, 2022.
The reporting unit with a fair value not substantially in excess of their carrying value included Digital Wallets (within the Digital Wallets segment), which had a goodwill balance of $1,385,956 as of December 31, 2023.
In addition, the Company is required to maintain minimum levels of liquidity within its regulated businesses within the United Kingdom and Ireland in accordance with our regulatory requirements. We monitor liquidity levels within our regulated entities on an ongoing basis, in accordance with our liquidity and capital adequacy assessment framework. B.
As of December 31, 2023 and 2022, the Company was in compliance with all financial covenants associated with its debt. In addition, the Company is required to maintain minimum levels of liquidity within its regulated businesses within the United Kingdom and Ireland in accordance with our regulatory requirements.
Quantitative and Qualitative Disclosure about Market Risk Our market risk includes the potential loss arising from adverse changes in foreign currency exchange rates and interest rates. We monitor risk exposures on an ongoing basis. The Company utilizes derivative financial instruments to manage interest rate risk on its variable rate debt facilities and term loans.
Volatility in our revenue, key operating metrics or their rates of growth could result in fluctuations in our financial condition or results of operations. 68 Quantitative and Qualitative Disclosure about Market Risk Our market risk includes the potential loss arising from adverse changes in foreign currency exchange rates and interest rates. We monitor risk exposures on an ongoing basis.
Results of Operations Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 The following table sets forth our results of operations for the years ended December 31, 2022 and 2021: 66 Year ended December 31, Variance (U.S. dollars in thousands) 2022 2021 $ % Revenue 1,496,137 1,487,013 9,124 0.6 % Cost of services (excluding depreciation and amortization) 614,025 599,778 14,247 2.4 % Selling, general and administrative 534,515 545,107 (10,592 ) (1.9 )% Depreciation and amortization 266,819 261,372 5,447 2.1 % Impairment expense on goodwill and intangible assets 1,887,223 324,145 1,563,078 482.2 % Restructuring and other costs 64,132 25,883 38,249 147.8 % Loss on disposal of subsidiaries and other assets, net 1,359 — 1,359 n/m Operating loss (1,871,936 ) (269,272 ) (1,602,664 ) n/m Other income, net 83,778 239,661 (155,883 ) (65.0 )% Interest expense, net (126,628 ) (165,827 ) 39,199 (23.6 )% Loss before taxes (1,914,786 ) (195,438 ) (1,719,348 ) n/m Income tax benefit (52,502 ) (85,110 ) 32,608 (38.3 )% Net loss (1,862,284 ) (110,328 ) (1,751,956 ) n/m Less: net income attributable to non-controlling interest 371 626 (255 ) (40.7 )% Net loss attributable to the Company (1,862,655 ) (110,954 ) (1,751,701 ) n/m Revenue Revenue increased by $9,124, or 0.6%, to $1,496,137 for the year ended December 31, 2022 from $1,487,013 for the year ended December 31, 2021.
Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth our results of operations for the years ended December 31, 2023 and 2022: Year ended December 31, Variance (U.S. dollars in thousands) 2023 2022 $ % Revenue 1,601,138 1,496,137 105,001 7.0 % Cost of services (excluding depreciation and amortization) 663,212 614,025 49,187 8.0 % Selling, general and administrative 508,136 534,515 (26,379 ) (4.9 )% Depreciation and amortization 263,433 266,819 (3,386 ) (1.3 )% Impairment expense on goodwill and intangible assets 1,254 1,887,223 (1,885,969 ) (99.9 )% Restructuring and other costs 6,061 64,132 (58,071 ) (90.5 )% Loss on disposal of subsidiaries and other assets, net 386 1,359 (973 ) (71.6 )% Operating income / (loss) 158,656 (1,871,936 ) 2,030,592 n/m Other income, net 13,081 83,778 (70,697 ) (84.4 )% Interest expense, net (151,148 ) (126,628 ) (24,520 ) 19.4 % Income / (loss) before taxes 20,589 (1,914,786 ) 1,935,375 n/m Income tax expense / (benefit) 40,840 (52,502 ) 93,342 (177.8 )% Net loss (20,251 ) (1,862,284 ) 1,842,033 n/m Less: net income attributable to non-controlling interest - 371 (371 ) (100.0 )% Net loss attributable to the Company (20,251 ) (1,862,655 ) 1,842,404 n/m Revenue Revenue increased by $105,001, or 7.0%, to $1,601,138 for the year ended December 31, 2023 from $1,496,137 for the year ended December 31, 2022.
Income tax benefit The income tax benefit was $52,502 for the year ended December 31, 2022 compared to $85,110 for the year ended December 31, 2021. This resulted in an effective tax rate of 2.7% for the year ended December 31, 2022 and 43.5% for the year ended December 31, 2021.
Income tax expense / benefit Income tax expense was $40,840 for the year ended December 31, 2023 compared to an income tax benefit of $52,502 for the year ended December 31, 2022.
In connection with the Transaction, we underwent a series of transactions that impacted our financial position and overall liquidity profile. This included the cash consideration for the Pi Jersey acquisition of $2,448,799, debt repayment of $1,155,743 in connection with the Transaction and payment of transaction costs of $151,722.
This included the cash consideration for the Pi Jersey acquisition of $2,448,799, debt repayment of $1,155,743 in connection with the Transaction and payment of transaction costs of $151,722. These transactions were offset by the $1,616,673 in net proceeds from the merger with FTAC and $2,000,000 in proceeds from private placement (“PIPE Investment”).

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

51 edited+17 added−18 removed104 unchanged
In the event of (i) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, Company Common Shares, other of the Company’s securities or other property), recapitalization, share split, reverse share split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of Company Common Shares or other securities, issuance of warrants or other rights to acquire Company Common Shares or other of the Company’s securities, or other similar corporate transaction or event that affects the Company Common Shares (including a “Change in Control,” as defined in the Omnibus Incentive Plan); or (ii) unusual or nonrecurring events affecting us, including changes in applicable rules, rulings, regulations, or other requirements, that the Compensation Committee determines, in its sole discretion, could result in substantial dilution or enlargement of the rights intended to be granted to, or available for, participants (any event in (i) or (ii), an “Adjustment Event”), the Compensation Committee will, in respect of any such Adjustment Event, make 84 such proportionate substitution or adjustment, if any, as it deems equitable, to any or all of (a) the Absolute Share Limit, or any other limit applicable under the Omnibus Incentive Plan with respect to the number of awards which may be granted thereunder; (b) the number of other Company Common Shares or other of the Company’s securities (or number and kind of other securities or other property) which may be issued in respect of awards or with respect to which awards may be granted under the Omnibus Incentive Plan; and (c) the terms of any outstanding award, including, without limitation, (x) the number of Company Common Shares or other of the Company’s securities (or number and kind of other securities or other property) subject to outstanding awards or to which outstanding awards relate; (y) the exercise price or strike price with respect to any award; or (z) any applicable performance measures; provided, that in the case of any “equity restructuring” (within the meaning of the FASB ASC Topic 718 (or any successor pronouncement thereto)), the Compensation Committee will make an equitable or proportionate adjustment to outstanding awards to reflect such equity restructuring.
In the event of (i) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, Company Common Shares, other of the Company’s securities or other property), recapitalization, share split, reverse share split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of Company Common Shares or other securities, issuance of warrants or other rights to acquire Company Common Shares or other of the Company’s securities, or other similar corporate transaction or event that affects the Company Common Shares (including a “Change in Control,” as defined in the Omnibus Incentive Plan); or (ii) unusual or nonrecurring events affecting us, including changes in applicable rules, rulings, regulations, or other requirements, that the Compensation Committee determines, in its sole discretion, could result in substantial dilution or enlargement of the rights intended to be granted to, or available for, participants (any event in (i) or (ii), an “Adjustment Event”), the Compensation Committee will, in respect of any such Adjustment Event, make such proportionate substitution or adjustment, if any, as it deems equitable, to any or all of (a) the Absolute Share Limit, or any other limit applicable under the Omnibus Incentive Plan with respect to the number of awards which may be granted thereunder; (b) the number of other Company Common Shares or other of the Company’s securities (or number and kind of other securities or other property) which may be issued in respect of awards or with respect to which awards may be granted under the Omnibus Incentive Plan; and (c) the terms of any outstanding award, including, without limitation, (x) the number of Company Common Shares or other of the Company’s securities (or number and kind of other securities or other property) subject to outstanding awards or to which outstanding awards relate; (y) the exercise price or strike price with respect to any award; or (z) any applicable performance measures; provided, that in the case of any “equity restructuring” (within the meaning of the FASB ASC Topic 718 (or any successor pronouncement thereto)), the Compensation Committee will make an equitable or proportionate adjustment to outstanding awards to reflect such equity restructuring.
The purchase price for the Company Common Shares as to which a share option is exercised may be paid to us, to the extent permitted by law (i) in cash, check, cash equivalent and/or Company Common Shares valued at the fair market value at the time the option is exercised; provided, that such Company Common Shares are not subject to any pledge or other security interest and have been held by the participant for at least six months (or such other period as established from time to time by the Compensation Committee in order to avoid adverse accounting treatment applying generally accepted accounting principles or (ii) by such other method as the Compensation Committee may permit in its sole discretion, including, without limitation: (a) in other property having a fair market value on the date of exercise equal to the exercise price, (b) if there is a public market for the Company Common Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company delivered (including telephonically to the extent permitted by the Compensation Committee) a copy of irrevocable instructions to a stockbroker to sell the Company Common Shares otherwise issuable upon the exercise of the option and to deliver promptly to Company Common Shares an amount equal to the exercise price or (c) a “net exercise” procedure effected by withholding the minimum number of Company Common Shares otherwise issuable in respect of an option that is needed to pay the exercise price.
The purchase price for the Company Common Shares as to which a share option is exercised may be paid to us, to the extent permitted by law (i) in cash, check, cash equivalent and/or Company Common Shares valued at the fair market value at the time the option is exercised; provided, that such Company Common Shares are not subject to any pledge or other security interest and have been held by the participant for at least six months (or such other period as established from time to time by the Compensation Committee in order to avoid adverse accounting treatment applying generally accepted accounting principles or (ii) by such other method as the Compensation Committee may permit in its sole discretion, including, without limitation: (a) in other property having a fair market value on the date of exercise equal to the exercise price, (b) if there is a public market for the Company Common Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company delivered (including telephonically to the extent permitted by the Compensation Committee) a copy of irrevocable instructions to a stockbroker to sell the Company Common Shares otherwise issuable upon the exercise of the option and to deliver promptly to Company Common Shares an amount equal to the exercise price or (c) a “net exercise” procedure effected by withholding the minimum number of Company Common 81 Shares otherwise issuable in respect of an option that is needed to pay the exercise price.
The Compensation Committee is authorized to: (i) designate participants; (ii) determine the type or types of awards to be granted to a participant; (iii) determine the number of Company Common Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with, awards; (iv) determine the terms and conditions of any award; (v) determine whether, to what extent and under what circumstances awards may be settled in, or exercised for, cash, Company Common Shares, other securities, other awards or other property, or canceled, forfeited or suspended and the method or methods by which awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Company Common Shares, other securities, other awards, or other property and other amounts payable with respect to an award will be deferred either automatically or at the election of 82 the participant or of the Compensation Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in, and/or supply any omission in the Omnibus Incentive Plan and any instrument or agreement relating to, or award granted under, the Omnibus Incentive Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Compensation Committee may deem appropriate for the proper administration of the Omnibus Incentive Plan; (ix) adopt sub-plans; and (x) make any other determination and take any other action that the Compensation Committee deems necessary or desirable for the administration of the Omnibus Incentive Plan.
The Compensation Committee is authorized to: (i) designate participants; (ii) determine the type or types of awards to be granted to a participant; (iii) determine the number of Company Common Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with, awards; (iv) determine the terms and conditions of any award; (v) determine whether, to what extent and under what circumstances awards may be settled in, or exercised for, cash, Company Common Shares, other securities, other awards or other property, or canceled, forfeited or suspended and the method or methods by which awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Company Common Shares, other securities, other awards, or other property and other amounts payable with respect to an award will be deferred either automatically or at the election of the participant or of the Compensation Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in, and/or supply any omission in the Omnibus Incentive Plan and any instrument or agreement relating to, or award granted under, the Omnibus Incentive Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Compensation Committee may deem appropriate for the proper administration of the Omnibus Incentive Plan; (ix) adopt sub-plans; and (x) make any other determination and take any other action that the Compensation Committee deems necessary or desirable for the administration of the Omnibus Incentive Plan.
The Company’s Board may amend, alter, suspend, discontinue or terminate the Omnibus Incentive Plan or any portion thereof at any time; provided, that no such amendment, alteration, suspension, discontinuance or termination may be made without shareholder approval if (i) such approval is required under applicable law; (ii) it would materially increase the number of securities which may be issued under the Omnibus Incentive Plan (except for adjustments in connection with certain corporate events); or (iii) it would materially modify the requirements for participation in the Omnibus Incentive Plan; provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any participant or any holder or beneficiary of any award will not to that extent be effective without such individual’s consent.
The Company’s Board may amend, alter, suspend, discontinue or terminate the Omnibus Incentive Plan or any portion thereof at any time; provided, that no such amendment, alteration, suspension, discontinuance or termination may be 82 made without shareholder approval if (i) such approval is required under applicable law; (ii) it would materially increase the number of securities which may be issued under the Omnibus Incentive Plan (except for adjustments in connection with certain corporate events); or (iii) it would materially modify the requirements for participation in the Omnibus Incentive Plan; provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any participant or any holder or beneficiary of any award will not to that extent be effective without such individual’s consent.
Any one or more of the aforementioned performance criteria may be stated as a percentage of another performance criteria, or used on an absolute or relative basis to measure the performance of one or more members of the Company Group as a whole or any divisions or operational and/or business units, product lines, brands, business segments, or administrative departments of the applicable member of the Company Group 83 or any combination thereof, as the Compensation Committee may deem appropriate, or any of the above performance criteria may be compared to the performance of a selected group of comparison companies, or a published or special index that the Compensation Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices.
Any one or more of the aforementioned performance criteria may be stated as a percentage of another performance criteria, or used on an absolute or relative basis to measure the performance of one or more members of the Company Group as a whole or any divisions or operational and/or business units, product lines, brands, business segments, or administrative departments of the applicable member of the Company Group or any combination thereof, as the Compensation Committee may deem appropriate, or any of the above performance criteria may be compared to the performance of a selected group of comparison companies, or a published or special index that the Compensation Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices.
Before that, he held senior roles for a wide range of high-performing technology companies including COO at Tubemogul, a programmatic video platform acquired by Adobe Systems for $540m; SVP, Global Sales at NeuStar, Inc., a cloud-based, information services company; CEO at PointRoll, Inc., a leading provider of digital marketing 78 technology; and Vice President Sales for ShopLocal Inc. known for its innovative, localized digital marketing solutions for retailers.
Before that, he held senior roles for a wide range of high-performing technology companies including COO at Tubemogul, a programmatic video platform acquired by Adobe Systems for $540m; SVP, Global Sales at NeuStar, Inc., a cloud-based, information services company; CEO at PointRoll, Inc., a leading provider of digital marketing technology; and Vice President Sales for ShopLocal Inc. known for its innovative, localized digital marketing solutions for retailers.
However, 86 if permitted by the Company, a recipient of restricted Company Common Shares may make an election under Section 83(b) of the Code to instead be taxed on the excess of the fair market value of the shares granted, measured at the time of grant and determined without regard to any applicable risk of forfeiture or transfer restrictions, over the purchase price, if any, of such restricted shares.
However, if permitted by the Company, a recipient of restricted Company Common Shares may make an election under Section 83(b) of the Code to instead be taxed on the excess of the fair market value of the shares granted, measured at the time of grant and determined without regard to any applicable risk of forfeiture or transfer restrictions, over the purchase price, if any, of such restricted shares.
In addition, the A ordinary shares are subject to a ratchet in connection with the Transactions (and upon subsequent receipts of proceeds by the CVC Investors and the Blackstone Investors, whom we refer to as the “Investors”) which allows management to participate in a greater share of returns if certain IRR (i.e., total internal rate of return achieved by the Investors in relation to their investment) thresholds are satisfied.
In addition, the A ordinary shares are subject to a ratchet in connection with the Transactions (and upon subsequent receipts of proceeds by the CVC Investors and the Blackstone Investors, whom we refer to as the “Investors”) which allows management to participate in a 84 greater share of returns if certain IRR (i.e., total internal rate of return achieved by the Investors in relation to their investment) thresholds are satisfied.
He started his career working in the public sector as an Officer for the UK’s HM Customs & Excise followed by more than 25 years in banking, commercial finance, insurance, telecoms and payments with a focus on risk management, compliance, operational effectiveness, regulatory affairs, strategy and business development.
He started his career working in the public sector as an Officer for the UK’s HM Customs & Excise followed by more than 25 years in 76 banking, commercial finance, insurance, telecoms and payments with a focus on risk management, compliance, operational effectiveness, regulatory affairs, strategy and business development.
Murphy joined Blackstone in 2021 and is a Managing Director in the firm’s Private Equity Group, where he focuses on investments in the technology and financial technology industries. Prior to Blackstone, Mr. Murphy spent over eight years at Francisco Partners, a U.S.-based private equity fund that focuses on investments in the technology industry. While at Francisco Partners, Mr.
Murphy joined Blackstone in 2021 and is a Senior Managing Director in the firm’s Private Equity Group, where he focuses on investments in the technology and financial technology industries. Prior to Blackstone, Mr. Murphy spent over eight years at Francisco Partners, a U.S.-based private equity fund that focuses on investments in the technology industry. While at Francisco Partners, Mr.
No taxable income is realized by a participant upon the grant or exercise of an incentive share option; however, the exercise of an incentive share option will give rise to an item of tax preference that may result in alternative minimum tax liability for the participant.
No taxable income is realized by a participant upon the grant or exercise of an incentive share option; however, the exercise of an incentive share option will give rise to an item of tax preference that may result in alternative minimum tax liability 83 for the participant.
No award may be granted under the Omnibus Incentive Plan after the tenth anniversary of the Effective Date (as defined in the Omnibus Incentive Plan), but awards granted before then may extend beyond that date.
No award may be granted under the Omnibus Incentive Plan after the tenth anniversary of the Effective Date 80 (as defined in the Omnibus Incentive Plan), but awards granted before then may extend beyond that date.
Our non-executive directors who receive compensation receive an annual cash fee ranging from $90,000 to $150,000, committee and chairmanship fees ranging from $5,000 to $40,000 and are eligible to participate in the Paysafe equity program with annual equity grants ranging from $125,000 to $350,000, granted at the Annual General Meeting.
Our non-executive directors who receive compensation receive an annual cash fee ranging from $90,000 to $150,000, committee and chairmanship fees ranging from $10,000 to $40,000 and are eligible to participate in the Paysafe equity program with annual equity grants ranging from $125,000 to $350,000, granted at the Annual General Meeting.
Under Rule 405 of the Securities Act, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2023.
Under Rule 405 of the Securities Act, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2024.
Compensation Committee Interlocks and Insider Participation None of our executive officers currently serves, or has served during the last completed fiscal year as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on the Company Board or our compensation committee.
Compensation Committee Interlocks and Insider Participation None of our executive officers currently serve, or has served during the last completed fiscal year as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on the Company Board or our compensation committee.
Prior to that, he was a Senior Associate Consultant at L.E.K. Consulting. Mr. Bryant holds a master’s degree in Physics from the University of Oxford. 79 Anthony Jabbour has served as a member of the Company Board since 2021. Mr.
Prior to that, he was a Senior Associate Consultant at L.E.K. Consulting. Mr. Bryant holds a master’s degree in Physics from the University of Oxford. 77 Anthony Jabbour has served as a member of the Company Board since 2021. Mr.
In addition to operational risks, the risk oversight committee routinely reviews the material risks and mitigations of the Company, including cybersecurity and human capital management. The risk oversight committee regularly receives updates from the Company's Chief Risk and Compliance Officer. The review of environmental risks currently sits with the full Board.
In addition to operational risks, the risk oversight committee routinely reviews the material risks and mitigation of the Company, including cybersecurity and human capital management. The risk oversight committee regularly receives updates from the Company's Chief Risk and Compliance Officer. The review of environmental risks currently sits with the full Board.
The compensation committee is responsible for, among other things: • reviewing and approving corporate goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the board of directors), determining and approving our CEO’s compensation level based on such evaluation; • reviewing and approving, or making recommendations to the Company Board with respect to, the compensation of our other executive officers, including annual base salary, bonus and equity-based incentives and other benefits; • reviewing and recommending the compensation of the Company Board; • reviewing and discussing annually with management our compensation disclosure required by SEC rules; and • reviewing and making recommendations with respect to our equity compensation plans.
The compensation committee is responsible for, among other things: • reviewing and approving corporate goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the board of directors), determining and approving our CEO’s compensation level based on such evaluation; • reviewing and approving, or making recommendations to the Company Board with respect to, the compensation of our other executive officers, including annual base salary, bonus and equity-based incentives and other benefits; • reviewing and recommending the compensation of the Company Board; • reviewing and approving the Incentive Compensation Recovery Policy; 86 • reviewing and discussing annually with management our compensation disclosure required by SEC rules; and • reviewing and making recommendations with respect to our equity compensation plans.
Unless otherwise determined by the Compensation Committee, to the extent that a participant receives any amount in excess of the amount that the participant should otherwise have received under the terms of the award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the participant will be required to repay the Company any such excess amount. 85 Detrimental Activity.
Unless otherwise determined by the Compensation Committee, to the extent that a participant receives any amount in excess of the amount that the participant should otherwise have received under the terms of the award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the participant will be required to repay the Company any such excess amount.
We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website. The information contained on, or accessible from, our website is not part of this Report by reference or otherwis e D. Employees 89 As of December 31, 2022, we had approximately 3,300 employees globally.
We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website. The information contained on, or accessible from, our website is not part of this Report by reference or otherwis e. D. Employees As of December 31, 2023, we had approximately 3,200 employees globally.
The Company Board has determined that Dagmar Kollmann, Mark Brooker and Hilary Stewart-Jones qualify as independent directors under the independence standards of Rule 10A-3 of the Exchange Act, and that Dagmar Kollmann qualifies as an “audit committee financial expert” as such term is defined in the rules of the SEC.
The Company Board has determined that Dagmar Kollmann, Mark Brooker and Daniel Henson qualify as independent directors under the independence standards of Rule 10A-3 of the Exchange Act, and that Dagmar Kollmann qualifies as an “audit committee financial expert” as such term is defined in the rules of the SEC.
Our audit committee is responsible for, among other thin g : • selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors; • assisting the Company Board in evaluating the qualifications, performance and independence of our independent auditors; • assisting the Company Board in monitoring the quality and integrity of our financial statements and our accounting and financial reporting; • assisting the Company Board in monitoring our compliance with legal and regulatory requirements; • reviewing the adequacy and effectiveness of our internal control over financial reporting processes; • assisting the Company Board in monitoring the performance of our internal audit function; • monitoring the performance of our internal audit function; • reviewing with management and our independent auditors our annual and quarterly financial statements; and • establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. 88 Compensation Committee Our compensation committee consists of James Murren and Mark Brooker, with James Murren serving as chair.
Our audit committee is responsible for, among other thin g : • selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors; • assisting the Company Board in evaluating the qualifications, performance and independence of our independent auditors; • assisting the Company Board in monitoring the quality and integrity of our financial statements and our accounting and financial reporting; • assisting the Company Board in monitoring our compliance with legal and regulatory requirements; • reviewing the adequacy and effectiveness of our internal control over financial reporting processes; • assisting the Company Board in monitoring the performance of our internal audit function; • monitoring the performance of our internal audit function; • reviewing with management and our independent auditors our annual and quarterly financial statements; and • establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
For so long as we qualify as a foreign private issuer, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: 87 • the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and imposing liability for insiders who profit from trades made within a short period of time; • the rules under the Exchange Act requiring the filing with the SEC of an annual report on Form 10-K (although we will file annual reports on a corresponding form for foreign private issuers), quarterly reports on Form 10-Q containing unaudited financial and other specified information (although we will file semi-annual reports on a current reporting form for foreign private issuers), or current reports on Form 8-K, upon the occurrence of specified significant events (although we may file the occurrence of certain corporate developments on a current reporting form for foreign private issuers); and • Regulation Fair Disclosure or Regulation FD, which regulates selective disclosure of material non-public information by issuers.
For so long as we qualify as a foreign private issuer, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: • the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and imposing liability for insiders who profit from trades made within a short period of time; • the rules under the Exchange Act requiring the filing with the SEC of an annual report on Form 10-K (although we will file annual reports on a corresponding form for foreign private issuers), quarterly reports on Form 10-Q containing unaudited financial and other specified information (although we will file semi-annual reports on a current reporting form for foreign private issuers), or current reports on Form 8-K, upon the occurrence of specified significant events (although we may file the occurrence of certain corporate developments on a current reporting form for foreign private issuers); and • Regulation Fair Disclosure or Regulation FD, which regulates selective disclosure of material non-public information by issuers. 85 Accordingly, there may be less publicly available information concerning our business than there would be if we were a U.S. public company.
The Company Bye-laws provide for a classified board of directors, with three directors in Class I (Bruce Lowthers, James Murren and Jonathan Murphy), four directors in Class II (Matthew Bryant, Mark Brooker, Dagmar Kollmann and Hilary Stewart-Jones) and four directors in Class III (Daniel Henson, Anthony Jabbour, Eli Nagler and Peter Rutland).
The Company Bye-laws provide for a classified board of directors, with two directors in Class I (Bruce Lowthers and Jonathan Murphy), three directors in Class II (Matthew Bryant, Mark Brooker, and Dagmar Kollmann) and four directors in Class III (Daniel Henson, Anthony Jabbour, Eli Nagler and Peter Rutland).
Members serve on these committees until their resignation or until otherwise determined by the Company Board. Audit Committee Our audit committee consists of Dagmar Kollmann, Mark Brooker, and Hilary Stewart-Jones, with Dagmar Kollmann serving as chair and Dagmar Kollmann serving as the audit committee financial expert.
Members serve on these committees until their resignation or until otherwise determined by the Company Board. Audit Committee Our audit committee consists of Dagmar Kollmann, Mark Brooker, and Daniel Henson, with Dagmar Kollmann serving as chair and as the audit committee financial expert.
Mark also brings a diverse range of Non-Executive Board Director experience and currently sits on the boards of Findmypast, a leader in online genealogy, where he is Chairman; Future PLC, a global platform for specialist media and member of the FTSE250; eCogra Holdings Limited and Heathrow Airport Holdings Limited.
Mark also brings a diverse range of Non-Executive Board Director experience and currently sits on the boards of Findmypast, a leader in online genealogy, where he is Chairman; Future PLC, a global platform for specialist media and member of the FTSE250; eCogra Holdings Limited, an independent software testing agency for the online gaming industry (Chairman), and Heathrow Airport Holdings Limited.
Risk Oversight Committee In addition to the above committees, the Company Board has established a risk oversight committee. The risk oversight committee consists of Hilary Stewart-Jones, Dagmar Kollmann, Jonathan Murphy and Matthew Bryant, with Hilary Stewart- Jones serving as chair.
Risk Oversight Committee In addition to the above committees, the Company Board has established a risk oversight committee. The risk oversight committee consists of Daniel Henson, Dagmar Kollmann, Jonathan Murphy and Matthew Bryant, with Daniel Henson serving as chair.
The Cash compensation for our senior management team in 2022 consisted of aggregate base salary of $5,888,673. The description below provides detail on the equity grants. Annual Bonus Program The Executive Short-Term Bonus Program is an incentive program based on the achievement of performance targets which are measured over a one-year period.
The Cash compensation for our senior management team in 2023 consisted of aggregate base salary of $4,684,219. The description below provides detail on the equity grants. Annual Bonus Program The Executive Short-Term Bonus Program is an incentive program based on the achievement of performance targets which are measured over a one-year period.
Jabbour has also served as the Chief Executive Officer and a director of Dun & Bradstreet (and its predecessors), a leading global provider of business decision data and analytics, since February 2019. In May 2022, Mr.
Jabbour has also served as the Chief Executive Officer and a director of Dun & Bradstreet (and its predecessors), a leading global provider of business decision data and analytics, since February 2019. From May 2022 until its acquisition by ICE in 2023, Mr.
Per the Shareholders Agreement, the CVC Investors, the Blackstone Investors and Cannae LLC jointly designated Dagmar Kollmann and Mark Brooker as independent directors, the CVC Investors designated Matthew Bryant and Peter Rutland as directors, the Blackstone Investors designated Jonathan Murphy and Eli Nagler as directors and the FTAC Investors designated Daniel Henson, Anthony Jabbour, James Murren and Hilary Stewart-Jones as directors.
Per the Shareholders Agreement, the CVC Investors, the Blackstone Investors and Cannae LLC jointly designated Dagmar Kollmann and Mark Brooker as independent directors, the CVC Investors designated Matthew Bryant and Peter Rutland as directors, the Blackstone Investors designated Jonathan Murphy and Eli Nagler as directors and the FTAC Investors designated Daniel Henson and Anthony Jabbour as directors. See “C.
Long term variable compensation may be awarded in the form of restricted shares units, stock options or equivalent instruments or units. In aggregate, the value of the long-term incentive awards granted to executives is equal to $44,239,385 for the year ended December 31, 2022.
Long term variable compensation may be awarded in the form of restricted shares units, stock options or equivalent instruments or units. In aggregate, the value of the long-term incentive awards granted to executives is equal to $16,479,132 for the year ended December 31, 2023.
We also adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, each of which will be posted on our website. Our Code of Business Conduct and Ethics is a “code of ethics,” as defined in Item406(b) of Regulation S-K.
We also adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, each of which are posted on our website at https://ir.paysafe.com/corporate-governance/governance-documents . Our Code of Business Conduct and Ethics is a “code of ethics,” as defined in Item406(b) of Regulation S-K.
Nagler is a Senior Managing Director in the Private Equity Group of Blackstone, where he focuses on investments in the Technology and Financial Services sectors. Since initially joining Blackstone in 2007, Mr.
Eli Nagler has served as a member of the Company Board since 2018. Mr. Nagler is a Senior Managing Director in the Private Equity Group of Blackstone, where he focuses on investments in the Technology and Financial Services sectors. Since initially joining Blackstone in 2007, Mr.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of James Murren and Mark Brooker with Mark Brooker serving as chair.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Mark Brooker and Daniel Henson with Mark Brooker serving as chair.
In addition, certain directors may receive one-time grants upon joining the Board. The aggregate compensation paid in cash and equity to non-executive directors in 2022 was $1,956,742 and $2,093,439, respectively. In addition, all of our directors receive reimbursement for all reasonable and properly documented expenses.
In addition, certain directors may receive one-time grants upon joining the Board. The aggregate compensation paid in cash and equity to non-executive directors in 2023 was $597,415 and $783,932, respectively. In addition, all of our directors receive reimbursement for all reasonable and properly documented expenses.
Henson served as non-executive chairman of Tempo Holdings until its merger and subsequent listing as Alight Inc in July of 2021. He also served as non-executive chairman of Exeter Finance, a leading auto finance company headquartered in Irving, TX. Previously, Mr. Henson served as a Director of Healthcare Trust of America and OnDeck Capital. Mr.
He also served as non-executive chairman of Exeter Finance, a leading auto finance company headquartered in Irving, TX. Previously, Mr. Henson served as a Director of Healthcare Trust of America and OnDeck Capital. Mr.
The aggregate amount of compensation, including cash, equity awards and other benefits, paid to our senior management team for the year ended December 31, 2022 was $54,285,502, $16,373,010 million of which was related to an Executive’s employment and/or termination agreement and not part of their normal compensation programs.
The aggregate amount of compensation, including cash, equity awards and other benefits, paid to our senior management team for the year ended December 31, 2023 was $23,301,066, of which $1,025,932 was related to an Executive’s employment and/or termination agreement and not part of their normal compensation programs.
To this extent, our practice varies from the requirements of the corporate governance standards of the NYSE, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events.
We are also not required to have a majority of independent directors. To this extent, our practice varies from the requirements of the corporate governance standards of the NYSE, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events and requires a majority of the board to be independent.
Senior Management For the year ended December 31, 2022, our senior management team consisted of Philip McHugh (through April 2022) Bruce Lowthers (as of May 2022), Ismail Dawood (through September 2022), Alexander Gersh (as of October 2022), Rob Gatto (as of July 2022), Udo Mueller (through July 2022), Paulette Rowe (through July 2022), Elliott Wiseman, Nick Walker, Roy Aston, Richard Swales, Afshin Yazdian, and Chirag Patel.
Senior Management For the year ended December 31, 2023, our senior management team consisted of Bruce Lowthers, Alexander Gersh, Rob Gatto, Elliott Wiseman, Nick Walker (through March 2023), Roy Aston, Richard Swales, Afshin Yazdian (through June 2023), Gustavo Ruiz (as of April 2023), Nicole Carroll (as of October 2023) and Chirag Patel (through July 2023).
Daniel Henson has served as a member of the Company Board since 2022. Mr. Henson currently serves as non-executive chairman of IntraFi Network (formerly Promontory Intrafinancial Network), a leading provider of deposit placement services operating in the Washington D.C. area. He also serves as a Director of Alight Solutions. Previously, Mr.
Henson currently serves as non-executive chairman of IntraFi Network (formerly Promontory Intrafinancial Network), a leading provider of deposit placement services operating in the Washington D.C. area. He also serves as a Director of Alight Solutions. Previously, Mr. Henson served as non-executive chairman of Tempo Holdings until its merger and subsequent listing as Alight Inc in July of 2021.
U.S. residents do not comprise a majority of our executive officers or directors, and most of our assets are located, and our business is principally administered, outside of the United States. As a result, we report under the Exchange Act as a non-U.S. company with foreign private issuer status.
Foreign Private Issuer Status We were founded in the UK in 1996 and were previously listed on the London Stock Exchange. U.S. residents do not comprise a majority of our executive officers or directors, and most of our assets are located, and our business is principally administered, outside of the United States.
This agreement grants our Principal Shareholders the right to designate nominees to the Company Board subject to the maintenance of certain ownership requirements in us. For additional information, see “Item 7.B. Related Party Transactions” of this Report. Foreign Private Issuer Status We were founded in the UK in 1996 and were previously listed on the London Stock Exchange.
We entered into the Shareholders Agreement with our Principal Shareholders in connection with the Transaction. This agreement grants our Principal Shareholders the right to designate nominees to the Company Board subject to the maintenance of certain ownership requirements in us. For additional information, see “Item 7.B. Related Party Transactions” of this Report.
After careful consideration of the current economy, retention concerns and 81 company stock performance, the Compensation Committee approved the granting of time-based restricted stock units vesting annually over a three-year period.
Long-Term Incentive Program The Compensation Committee met several times to discuss the 2023 Long-Term Incentive Program of the Company for the executives and other employees under the Omnibus Incentive Program. After careful consideration of the current economy, retention concerns and company stock performance, the Compensation Committee approved the granting of time-based restricted stock units vesting annually over a three-year period.
Before Paysafe he worked for PayPal where he spent nine years leading their global risk and compliance strategy and was instrumental in supporting significant growth for the business. Nick Walker has been our Chief Human Resources Officer since August 2015. Mr. Walker has global responsibility for HR, corporate communications, culture and wellbeing, and CSR.
Before Paysafe he worked for PayPal where he spent nine years leading their global risk and compliance strategy and was instrumental in supporting significant growth for the business. Elliott Wiseman has been our Chief Legal & People Officer since October 2023.
The equity in Pi Topco held by our executive officers and non-executive directors will be governed by the Management Investment Agreement (as defined below). Please see “Certain Relationships and Related Persons Transactions—Paysafe—Management Investment Agreement” for additional information. C. Board Practices Composition of the Board of Directors Our business and affairs are managed under the direction of the Company Board.
The equity in Pi Topco held by our executive officers and non-executive directors will be governed by the Management Investment Agreement (as defined below). Please see “Certain Relationships and Related Persons Transactions—Paysafe—Management Investment Agreement” for additional information. Incentive Compensation Recovery Policy In October 2023, the Board adopted the Incentive Compensation Recovery Policy in compliance with NYSE and SEC rules.
He also serves as Non-Executive Director at Seedrs Ltd. Mr Wiseman holds a Master’s Degree in Geography from Oxford University in the UK. Afshin Yazdian has been our Chief Executive Officer, U.S. Acquiring since July 2020.
He also serves as Non-Executive Director at Seedrs Ltd. Mr. Wiseman holds a Master’s Degree in Geography from Oxford University in the UK. Nicole Carroll has been our Chief Growth Officer since October 2023. She joined the Company in April 2023 as the Chief Strategy and Innovation Officer. Ms.
Accordingly, there may be less publicly available information concerning our business than there would be if we were a U.S. public company. Additionally, certain accommodations in the NYSE corporate governance standards allow foreign private issuers, such as us, to follow “home country” corporate governance practices in lieu of the otherwise applicable corporate governance standards.
Additionally, certain accommodations in the NYSE corporate governance standards allow foreign private issuers, such as us, to follow “home country” corporate governance practices in lieu of the otherwise applicable corporate governance standards.
Name Age Position Bruce Lowthers 57 Chief Executive Officer and Director Alexander Gersh 59 Chief Financial Officer Roy Aston 44 Chief Operating Officer Robert Gatto 58 Chief Revenue Officer Richard Swales 50 Chief Risk Officer Nick Walker 49 Chief Human Resources Officer Elliott Wiseman 49 General Counsel Afshin Yazdian 50 President, Merchant Solutions Daniel Henson 61 Chairman of the Board of Directors Mark Brooker 51 Director Matthew Bryant 39 Director Anthony Jabbour 55 Director Dagmar Kollmann 58 Director Jonathan Murphy 39 Director James Murren 61 Director Eli Nagler 37 Director Peter Rutland 43 Director Hilary Stewart-Jones 61 Director Bruce Lowthers has been our Chief Executive Officer since May 2022.
Directors and Executive Officers The following table sets forth the names, ages and positions of our executive officers and directors as of February 26, 2024. 75 Name Age Position Bruce Lowthers 58 Chief Executive Officer and Director Alexander Gersh 60 Chief Financial Officer Roy Aston 45 Chief Operating Officer Robert Gatto 59 Chief Revenue Officer Richard Swales 51 Chief Risk & Compliance Officer Elliott Wiseman 50 Chief Legal & People Officer Nicole Carroll 55 Chief Growth Officer Gustavo Ruiz 56 President, Latin America Daniel Henson 62 Chairman of the Board of Directors Mark Brooker 52 Director Matthew Bryant 40 Director Anthony Jabbour 56 Director Dagmar Kollmann 59 Director Jonathan Murphy 40 Director Eli Nagler 38 Director Peter Rutland 44 Director Bruce Lowthers has been our Chief Executive Officer since May 2022.
The Company Board has determined that Daniel Henson, Anthony Jabbour, James Murren, Dagmar Kollmann, Mark Brooker and Hilary Stewart-Jones qualify as independent directors under the NYSE listing standards. We entered into the Shareholders Agreement with our Principal Shareholders in connection with the Transaction.
The Class I directors term expires in 2025, the Class II directors term expires in 2026 and the Class III directors term expires in 2024. The Company Board has determined that Daniel Henson, Anthony Jabbour, Dagmar Kollmann, and Mark Brooker qualify as independent directors under the NYSE listing standards.
See “C. Board Practices—Composition of the Board of Directors” and “Item 7.B. Related Party Transactions” of this Report for additional information. B. Compensation Non-Executive Directors We do not currently pay our directors who are either employed by CVC or Blackstone, any compensation for their service as directors.
We do not currently pay our 78 directors who are either employed by CVC or Blackstone, any compensation for their service as directors.
Grant values for 2022 included the following programs: Grant Type Value at Grant ($) 2022 Annual RSU Grant $ 30,667,903 2022 Executive Bonus Performance RSU 3,763,199 Retention RSU 3,526,299 New Hire RSU 6,281,984 We also maintained a Stock Ownership Guideline program that consists of executives holding ownership of Paysafe equity ranging from 1x to 5x depending on the level of the executive.
Grant values for 2023 included the following programs: Grant Type Value at Grant ($) 2023 Annual RSU Grant $ 15,942,051 Performance-Based RSU 537,081 We also maintained a Stock Ownership Guideline program that consists of executives holding ownership of Paysafe equity ranging from 1x to 5x depending on the level of the executive. 79 Retirement Programs We utilize defined contribution plans in accordance with the local conditions and practices in the countries in which we operate.
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ITEM 6. DIREC TORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Executive Officers The following table sets forth the names, ages and positions of our executive officers and directors as of March 1, 2023.
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ITEM 6. DIREC TORS, SENIOR MANAGEMENT AND EMPLOYEES A.
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He has been with the company since 2012 during which time he has helped the executive team navigate multiple M&A integrations and other corporate transactions including IPO’s in the UK and the U.S. Before Paysafe, Mr.
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Mr Wiseman joined Paysafe in October 2011 and served as our General Counsel and Chief Compliance Officer until July 2022 after which he served as our General Counsel until October 2023. Mr. Wiseman has responsibility for human resources, internal comms, legal, privacy and company secretarial matters. Mr.
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Walker has worked in multiple international HR roles within the technology industry including stints living and working in Malaysia and Paris; carving out a niche in international HR, acquisition, transformation and change. Elliott Wiseman has been our General Counsel since October 2011. Mr. Wiseman has responsibility for legal, privacy, internal audit, M&A and company secretarial matters. Mr.
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Carroll brings an extensive track record of driving growth and innovation across high profile global organizations in the technology, fintech and payments sectors. Her primary responsibilities in the role are to further develop the company’s corporate vision and long-term growth strategy, and lead on its product innovation, capital expenditure and marketing programmes. Ms.
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Prior to joining Paysafe, he served as President & CEO of Cynergy Data from September 2013 until the company’s merger with Priority Payment Systems, and then continued to serve as President of Priority until January 2020. Prior to that, Mr.
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Carroll joined the Company from Experian, where she was Chief Product Officer for their Decisions Analytics business. Prior to that, she was a Senior Vice President at Visa where she led the company’s next generation of global software acceptance. Before Visa, Ms. Carroll spearheaded the digital transformation of Discover Financial Services, launching their first comprehensive API-driven digital product platform.
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Yazdian served as President of TouchSuite from April 2012 to September 2013 and EVP & General Counsel of iPayment, Inc. from its founding in January 2001 until December 2011. Mr. Yazdian graduated from Emory University Goizueta School of Business with a BBA in 1994 and graduated with honors from the University of Miami School of Law in 1997.
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In her earlier career, she held leadership roles driving innovation for the Citi Group and was also Chief Marketing Officer for Transys where she successfully launched the Oyster Card™ - the UK’s trailblazing travel smartcard. Ms. Carroll is a graduate of Georgetown University, U.S. Gustavo Ruiz has been our President, Latin America since 2022.
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James Murren has served as a member of the Company Board since 2021. Mr. Murren was appointed to lead the Nevada COVID-19 Response, Relief and Recovery Task Force in March 2020 by Governor Steve Sisolak.
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He joined the Company in 2022 following the Company’s acquisition of payments company, SafetyPay, where he was CEO for nine years. Since joining the Company, Mr. Ruiz has been charged with driving forward the Company’s strategy in Latin America and continuing to leverage its investments in the fast-growing region. Mr.
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He served on the National Infrastructure Advisory Council from December of 2013 to September of 2020, and has been a member of the Board of Trustees for Howard University since 2016. Mr.
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Ruiz brings extensive experience in the payments, banking and travel industries to the role. Prior to SafetyPay, he was VP and General Manager for American Express Membership Travel in Latin America. He also successfully led American Express Bank in Mexico. Mr.
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Murren first joined MGM Resorts International in 1998 as the Chief Financial Officer and served as the former Chairman and CEO of MGM Resorts International from December 2008 to February 2020. He also served as Chairman of the American Gaming Association from 2014 to 2017 and was on the Board of Trustees of the Brookings Institution from 2011 to 2018.
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Ruiz holds a bachelor’s business degree in Agronomy from Colorado State University, U.S.A., and a Diploma in Foreign Trade from the Universidad de las Americas, Mexico. Daniel Henson has served as a member of the Company Board since 2022. Mr.
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In 2003, Mr. Murren co-founded the Nevada Cancer Institute, which was the official cancer institute for the state of Nevada until 2013. Mr. Murren is also a founding contributor to Nevada’s first Fisher House which provides housing for military and Veterans’ families, which was founded in February of 2016.
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Rutland holds an MA Degree from the University of Cambridge and an MBA from INSEAD.
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He also served as a member of the Business Roundtable, an association of CEOs of leading U.S. companies. Mr. Murren received his Bachelor of Arts from Trinity College. Eli Nagler has served as a member of the Company Board since 2018. Mr.
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Board Practices—Composition of the Board of Directors” and “Item 7.B. Related Party Transactions” of this Report for additional information. B. Compensation Non-Executive Directors For the year ended December 31, 2023, our non-executive directors consisted of Daniel Henson, Mark Brooker, Anthony Jabbour, Dagmar Kollman, Hilary Stewart-Jones (through October 2023) and Jim Murren (through October 2023).
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Rutland holds an MA Degree from the University of Cambridge and an MBA from INSEAD. 80 Hilary Stewart-Jone s has served as a member of the Company Board since 2021. Ms. Stewart-Jones is a practicing UK lawyer at Harris Hagan who has specialized in assisting gambling companies and associated businesses since 1995 both in house and in private practice.
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In 2023, the Adjusted EBITDA metric did not achieve the threshold performance target and, therefore, the program was not funded to be paid to executives. As such, the Compensation Committee did not award any payments for the annual incentive program to executives and other senior leadership staff.
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She headed sector teams as a partner at BLP and DLA UK LLP, where she was able to leverage an international network to help support the burgeoning multi-jurisdictional online gambling industry from 2000-2013. From 2013 to 2015 she sat on the board of Playtech PLC, the LSE Main Market listed software house, becoming Deputy Chairman in 2014. Ms.
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Material Terms of the Omnibus Incentive Plan Purpose .
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Stewart-Jones has maintained a solicitor’s practicing certificate for 33 years and continues to give legal advice to a wide portfolio of clients on a broad range of gambling related commercial and regulatory issues. She holds an LLB from Queen Mary College, London and an LLM from Queen Mary, Kings, UCL and LSE (London inter-collegiate).
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The Incentive Compensation Recovery Policy provides for the recovery of erroneously awarded incentive-based compensation from Executive Officers when there is an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).
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She also holds a Personal Management Licence from the Gambling Commission.
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The Incentive Compensation Recovery Policy also provides for recovery of incentive-based compensation from certain covered employees due to the employee's fraud or misconduct (regardless of whether there is a financial restatement or a material error in calculating the compensation paid). C.
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In 2022, the Compensation Committee chose to award the annual incentive program in the form of a Performance-Based Restricted Stock Unit under the Omnibus Incentive Plan, as described below, with a performance period of January 1, 2022 to December 31, 2022. In aggregate the value of these awards granted in 2022 was $3,763,199.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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If reasonably required by the CVC Party and the Blackstone Parties, the CVC Party and the Blackstone Parties may elect to “flip-down” their holdings of securities in Pi Topco at or prior to or any time following closing.
If reasonably required by the CVC Party and the Blackstone Parties, the CVC Party and the Blackstone Parties may elect to “flip-down” their holdings of securities in Pi Topco at or prior to or any time following closing.
A “Related Person” means: • any person who is, or at any time during the applicable period was, one of the post-combination company’s executive officers or one of the post-combination company’s directors; • any person who is known by the post-combination company to be the beneficial owner of more than 5% of Paysafe’s voting stock; • any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of Paysafe’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of Paysafe’s voting stock; and • any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
A “Related Person” means: • any person who is, or at any time during the applicable period was, one of the post-combination company’s executive officers or one of the post-combination company’s directors; • any person who is known by the post-combination company to be the beneficial owner of more than 5% of Paysafe’s voting stock; • any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of Paysafe’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of Paysafe’s voting stock; and 89 • any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
If the FTAC Investors collectively hold less than 50% of the aggregate outstanding Company Common Shares held by the FTAC Investors as of the Closing Date, the Shareholders Agreement requires us to, among other things, nominate a number of individuals designated by FTAC for election as directors of the Company Board as follows: (i) if the FTAC Investors collectively hold at least 7.5% of the aggregate outstanding Company Common Shares, four directors; (ii) if the FTAC Investors collectively hold at least 6.25% (but less than 7.5%) of the aggregate outstanding Common Shares, two directors; and (iii) if the FTAC Investors collectively 92 hold at least 2.5% (but less than 6.25%) of the aggregate outstanding Common Shares, one director, which director may be a U.S. citizen or resident (in each case, each such person a “FTAC Designee”).
If the FTAC Investors collectively hold less than 50% of the aggregate outstanding Company Common Shares held by the FTAC Investors as of the Closing Date, the Shareholders Agreement requires us to, among other things, nominate a number of individuals designated by FTAC for election as directors of the Company Board as follows: (i) if the FTAC Investors collectively hold at least 7.5% of the aggregate outstanding Company Common Shares, four directors; (ii) if the FTAC Investors collectively hold at least 6.25% (but less than 7.5%) of the aggregate outstanding Common Shares, two directors; and (iii) if the FTAC Investors collectively hold at least 2.5% (but less than 6.25%) of the aggregate outstanding Common Shares, one director, which director may be a U.S. citizen or resident (in each case, each such person a “FTAC Designee”).
Additionally, any increase in the total number of directors on the Company Board to greater than eleven will require the consent of (i) the CVC Investors, for so long as the CVC Investors collectively directly hold or indirectly, as set forth in the books and records of PGHL or Pi Topco, as applicable, are attributed at least 7.5% of the aggregate outstanding Company Common Shares, (ii) the Blackstone Investors, for so long as the Blackstone Investors collectively directly hold or indirectly, as set forth in the books and records of PGHL or Pi Topco, as applicable, are attributed at least 7.5% of the aggregate outstanding Company Common Shares, and (iii) FTAC, for so long as the FTAC Investors collectively hold at least 7.5% of the aggregate outstanding Company Common Shares.
Additionally, any increase in the total number of directors on the Company Board to greater than eleven will require the consent of (i) the CVC Investors, for so long as the CVC Investors collectively directly hold or indirectly, as set forth in the books and records of PGHL or Pi Topco, as 90 applicable, are attributed at least 7.5% of the aggregate outstanding Company Common Shares, (ii) the Blackstone Investors, for so long as the Blackstone Investors collectively directly hold or indirectly, as set forth in the books and records of PGHL or Pi Topco, as applicable, are attributed at least 7.5% of the aggregate outstanding Company Common Shares, and (iii) FTAC, for so long as the FTAC Investors collectively hold at least 7.5% of the aggregate outstanding Company Common Shares.
(together, the “Blackstone Parties”), and BCP VII Co-Invest—Star (Cayman) L.P., Blackstone Pi Co-Invest L.P., Pi Syndication LP, Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Chatham Holdings II, LLC, AB High Income Fund, Inc., AB Bond Fund, Inc.—AB Income Fund, AllianceBernstein Global High Income Fund, Inc., AB FCP I—Global High Yield Portfolio (together, the “Co-Investors”) and Paysafe Group Holdings Limited and Pi Topco (together, the “Holdcos”) was amended and restated (such amended and restated agreement being the “Consortium Agreement”).
(together, the “Blackstone Parties”), and BCP VII Co-Invest—Star (Cayman) L.P., Blackstone Pi Co-Invest L.P., Pi Syndication LP, Francisco Partners IV, L.P., Francisco Partners IV-A, L.P., Chatham Holdings II, LLC, AB High Income Fund, Inc., AB Bond Fund, Inc.—AB Income Fund, AllianceBernstein Global High Income Fund, Inc., AB FCP I—Global High Yield 91 Portfolio (together, the “Co-Investors”) and Paysafe Group Holdings Limited and Pi Topco (together, the “Holdcos”) was amended and restated (such amended and restated agreement being the “Consortium Agreement”).
“Cannae” shall refer to Cannae Holdings, Inc., a Delaware corporation (“CHI”); and Cannae Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of CHI (“CHL”). Reflects 3,379,887 Company Common Shares directly held by Cannae Holdings, LLC. The address of each of the entities listed in this footnote is 1701 Village Center Circle, Las Vegas, Nevada 89134.
“Cannae” shall refer to Cannae Holdings, Inc., a Delaware corporation (“CHI”); and Cannae Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of CHI (“CHL”). Reflects 3,379,887 Company Common Shares directly held by CHL. The address of each of the entities listed in this footnote is 1701 Village Center Circle, Las Vegas, Nevada 89134.
Within 30 days of the Company becoming qualified to register the offer and sale of securities under the Securities Act pursuant to a registration statement on Form F-3, the Company will file a registration statement that covers all registrable securities then outstanding and use its best efforts to cause such shelf registration statement to be declared effective 93 by the SEC as soon as practicable thereafter.
Within 30 days of the Company becoming qualified to register the offer and sale of securities under the Securities Act pursuant to a registration statement on Form F-3, the Company will file a registration statement that covers all registrable securities then outstanding and use its best efforts to cause such shelf registration statement to be declared effective by the SEC as soon as practicable thereafter.
The general partners of Blackstone Management Associates (Cayman) VII L.P. and Blackstone Family Investment Partnership (Cayman) VII-ESC L.P. are BCP VII GP L.L.C. and Blackstone LR Associates (Cayman)VII Ltd.., with BCP VII GP L.L.C. controlling Blackstone Management Associates (Cayman) VII L.P. with respect to all matters other than voting of securities of underlying portfolio companies, which power is held by the Class B shareholders of Blackstone LR Associates (Cayman) VII Ltd., who are certain senior personnel of Blackstone.
The general partners of Blackstone Management Associates (Cayman) VII L.P. and Blackstone Family Investment Partnership (Cayman) VII-ESC L.P. are BCP VII 88 GP L.L.C. and Blackstone LR Associates (Cayman)VII Ltd.., with BCP VII GP L.L.C. controlling Blackstone Management Associates (Cayman) VII L.P. with respect to all matters other than voting of securities of underlying portfolio companies, which power is held by the Class B shareholders of Blackstone LR Associates (Cayman) VII Ltd., who are certain senior personnel of Blackstone.
(1) Numbers have been updated to reflect the reverse stock split (2) Shareholders Agreement means the agreement entered into by the Company, Pi Topco, PGHL, the Founder, Cannae LLC, the CVC Investors and the Blackstone Investors. 90 (3) Based on the most recently available Schedule 13D filed with the SEC on January 3, 2022, as of December 31, 2022.
(1) Numbers have been updated to reflect the reverse stock split. (2) Shareholders Agreement means the agreement entered into by the Company, Pi Topco, PGHL, the Founder, Cannae LLC, the CVC Investors and the Blackstone Investors. (3) Based on the most recently available Schedule 13D filed with the SEC on January 3, 2022, as of December 31, 2022.
Securities subject to this repurchase right are considered vested as follows: • First anniversary of acquisition of A Ordinary Shares—20% • Each additional quarter—5% • Up to a maximum of 80% In connection with the Transactions, the equity held by Managers are fully vested other than with respect to the repurchase right described above.
Securities subject to this repurchase right are considered vested as follows: • First anniversary of acquisition of A Ordinary Shares—20% 92 • Each additional quarter—5% • Up to a maximum of 80% In connection with the Transactions, the equity held by Managers are fully vested other than with respect to the repurchase right described above.
Related Party Transactions Policies and Procedures for Related Person transactions 91 The Company Board has adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
Related Party Transactions Policies and Procedures for Related Person transactions The Company Board has adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
Indemnification Agreements 95 We entered into indemnification agreements with our directors and executive officers.
Indemnification Agreements We entered into indemnification agreements with our directors and executive officers.
The “CVC Investors” shall refer to Pi Holdings Jersey Limited and Pi Syndication LP. Reflects 8,158,241Company Common Shares directly held by Pi Holdings Jersey Limited and 4,841,431Company Common Shares directly held by Pi Syndication LP. The registered address for each CVC Investor is c/o Saltgate Limited, 27 Esplanade, St Helier, Jersey, JE1 1SG, United Kingdom.
The “CVC Investors” shall refer to Pi Holdings Jersey Limited and Pi Syndication LP. Reflects 8,158,241 Company Common Shares directly held by Pi Holdings Jersey Limited and 4,841,431 Company Common Shares directly held by Pi Syndication LP. The registered address for each CVC Investor is c/o Saltgate Limited, 27 Esplanade, St Helier, Jersey, JE1 1SG, United Kingdom.
Reflects 8,402,943 Company Common Shares directly held by BCP Pi Aggregator (Cayman) L.P., 1,490,243Company Common Shares directly held by Blackstone Pi Co-Invest (Cayman) L.P., 378,290Company Common Shares directly held by BCP VII Co-Invest—Star (Cayman) L.P., and 39,055 Company Common Shares directly held by Blackstone Family Investment Partnership (Cayman) VII-ESC L.P.
Reflects 8,402,943 Company Common Shares directly held by BCP Pi Aggregator (Cayman) L.P., 1,490,243 Company Common Shares directly held by Blackstone Pi Co-Invest (Cayman) L.P., 378,290 Company Common Shares directly held by BCP VII Co-Invest—Star (Cayman) L.P., and 39,055 Company Common Shares directly held by Blackstone Family Investment Partnership (Cayman) VII-ESC L.P.
Name and Address of Beneficial Owner Number (1) of Company Common Shares Percentage of Company Common Shares Company Officers, Directors and 5% Holders Parties to our shareholders agreement as a group (2) 28,932,366 47.5 % CVC (3) 12,999,682 21.3 % Blackstone (4) 10,914,696 17.9 % Cannae (5) 3,379,887 5.5 % FNF Holders (6) 3,750,000 6.2 % William P.
Name and Address of Beneficial Owner Number (1) of Company Common Shares Percentage of Company Common Shares Company Officers, Directors and 5% Holders Parties to our shareholders agreement as a group (2) 28,932,356 47 % CVC (3) 12,999,672 21 % Blackstone (4) 10,914,696 18 % Cannae (5) 3,379,887 5 % FNF Holders (6) 3,750,000 6 % William P.
Per the Shareholders Agreement, the CVC Investors, the Blackstone Investors and Cannae LLC jointly designated Dagmar Kollmann and Mark Brooker as independent directors, the CVC Investors designated Matthew Bryant and Peter Rutland as directors, the Blackstone Investors designated Jonathan Murphy and Eli Nagler as directors and the FTAC Investors designated Daniel Henson, Anthony Jabbour, James Murren and Hilary Stewart-Jones as directors.
Per the Shareholders Agreement, the CVC Investors, the Blackstone Investors and Cannae LLC jointly designated Dagmar Kollmann and Mark Brooker as independent directors, the CVC Investors designated Matthew Bryant and Peter Rutland as directors, the Blackstone Investors designated Jonathan Murphy and Eli Nagler as directors and the FTAC Investors designated Daniel Henson and Anthony Jabbour as directors.
Major Shareholders The following table sets forth information regarding the actual beneficial ownership of Company Common Shares as of March 1, 2023: • each person known to us to be the beneficial owner or more than 5% of Company Common Shares; • each of our directors and Company Officers; and • all our directors and Company Officers as a group.
Major Shareholders 87 The following table sets forth information regarding the actual beneficial ownership of Company Common Shares as of February 26, 2024: • each person known to us to be the beneficial owner or more than 5% of Company Common Shares; • each of our directors and Company Officers; and • all our directors and Company Officers as a group.
The address of each of the entities listed in this footnote is c/o Blackstone Inc., 345 Park Avenue, New York, New York 10154 (5) Based on the most recently available Schedule 13D/A filed with the SEC on November 15, 2022, as of December 31, 2022.
The address of each of the entities listed in this footnote is c/o Blackstone Inc., 345 Park Avenue, New York, New York 10154 (5) Based on the most recently available Schedule 13D/A filed with the SEC on January 26, 2024, as of January 26, 2024.
In addition, the Managers, the EBT and the SBT are obliged to provide such cooperation or assistance as the CVC Party and the Blackstone Parties may require in connection with any transfer of their securities in Pi Topco or a winding-up of Pi Topco. 94 The Management Investment Agreement also provides that, until the CVC Party and the Blackstone Parties realize a 1 times return on their original investment in the Paysafe group of companies: • If a Manager becomes a Bad Leaver (as defined in the Management Investment Agreement) by reason of voluntary resignation, the Manager’s securities that derive from the Manager’s holdings of A ordinary shares prior to the amendment of the Management Investment Agreement can be acquired by the CVC Party and the Blackstone Parties (or such person nominated by them) at fair market value for vested securities and at the lower of FMV and cost for unvested securities. • If a Manager becomes a Bad Leaver by reason of fraud, summary dismissal or breach of restrictive covenant, the Manager’s securities that derive from the Manager’s holdings of A ordinary shares prior to the amendment of the Management Investment Agreement can be acquired by the CVC Party and the Blackstone Parties (or such person nominated by them) at the lower of fair market value and cost.
The Management Investment Agreement also provides that, until the CVC Party and the Blackstone Parties realize a 1 times return on their original investment in the Paysafe group of companies: • If a Manager becomes a Bad Leaver (as defined in the Management Investment Agreement) by reason of voluntary resignation, the Manager’s securities that derive from the Manager’s holdings of A ordinary shares prior to the amendment of the Management Investment Agreement can be acquired by the CVC Party and the Blackstone Parties (or such person nominated by them) at fair market value for vested securities and at the lower of FMV and cost for unvested securities. • If a Manager becomes a Bad Leaver by reason of fraud, summary dismissal or breach of restrictive covenant, the Manager’s securities that derive from the Manager’s holdings of A ordinary shares prior to the amendment of the Management Investment Agreement can be acquired by the CVC Party and the Blackstone Parties (or such person nominated by them) at the lower of fair market value and cost.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Company Common Shares beneficially owned by them. Except as otherwise indicated, the address for each shareholder listed below is 25 Canada Square, 27th Floor, London, United Kingdom E14 5LQ.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Company Common Shares beneficially owned by them. Except as otherwise indicated, the address for each shareholder listed below is 2 Gresham Street, 1st Floor, London, United Kingdom EC2V 7AD.
Both agreements were approved by our Audit Committee. In 2022, we spent $11.4 million with Dun & Bradstreet in connection with the license and risk management agreement. Mr. Jabbour is the Chief Executive Officer and a director of Dun & Bradstreet. In addition, Dun & Bradstreet is an affiliate of Cannae.
Both agreements were approved by our Audit Committee. In 2023, we recognized $12.8 million of expense associated with Dun & Bradstreet in connection with the license and risk management agreement. Mr. Jabbour is the Chief Executive Officer and a director of Dun & Bradstreet. In addition, Dun & Bradstreet is an affiliate of Cannae.
Foley II (7) 1,638,101 2.7 % Bruce Lowthers * * Alexander Gersh * * Elliott Wiseman * * Afshin Yazdian * * Roy Aston * * Nick Walker * * Richard Swales * * Daniel Henson * * Mark Brooker * * Matthew Bryant * * Anthony Jabbour * * Dagmar Kollmann * * Jonathan Murphy * * James Murren * * Eli Nagler * * Peter Rutland * * Hilary Stewart-Jones * * All Company directors and executive officers as a group * * *Less than 1%.
Foley II (7) 1,638,101 3 % Bruce Lowthers * * Alexander Gersh * * Elliott Wiseman * * Roy Aston * * Richard Swales * * Nicole Carroll * * Gustavo Ruiz * * Daniel Henson * * Mark Brooker * * Matthew Bryant * * Anthony Jabbour * * Dagmar Kollmann * * Jonathan Murphy * * Eli Nagler * * Peter Rutland * * All Company directors and executive officers as a group * * *Less than 1%.
Added
In addition, the Managers, the EBT and the SBT are obliged to provide such cooperation or assistance as the CVC Party and the Blackstone Parties may require in connection with any transfer of their securities in Pi Topco or a winding-up of Pi Topco.

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