Published: 2022-05-09 00:00:00 ET

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-37979

 

VERRA MOBILITY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware		81-3563824
(State of		(I.R.S. Employer
Incorporation)		Identification No.)
1150 North Alma School Road		85201
Mesa, Arizona		(Zip Code)
(Address of Principal Executive Offices)

(480) 443-7000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

(Title of Each Class)		(Trading Symbol)		(Name of Each Exchange on Which Registered)
Class A Common Stock, par value $0.0001 per share		VRRM		Nasdaq Capital Market
Warrants to purchase Class A Common Stock		VRRMW		OTC Pink Marketplace

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act:

 

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☐
			Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). YES ☐ NO ☒

As of May 5, 2022, there were 156,225,265 shares of the Company’s Class A Common Stock, par value $0.0001 per share, issued and outstanding.

 

 

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VERRA MOBILITY CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2022

TABLE OF CONTENTS

 

PART I—FINANCIAL INFORMATION		5
Item 1. Financial Statements		5
Condensed Consolidated Balance Sheets		5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)		6
Condensed Consolidated Statements of Stockholders’ Equity		7
Condensed Consolidated Statements of Cash Flows		8
Notes to the Condensed Consolidated Financial Statements		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3. Quantitative and Qualitative Disclosures About Market Risk		39
Item 4. Controls and Procedures		39
PART II—OTHER INFORMATION		41
Item 1. Legal Proceedings		41
Item 1A. Risk Factors		41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3. Defaults Upon Senior Securities		42
Item 4. Mine Safety Disclosures		42
Item 5. Other Information		42
Item 6. Exhibits		43
SIGNATURES		45

 

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, products, services, and technology offerings, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely” and similar expressions, and the negative of these expressions, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements include, among other things:

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You should not rely on forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations.

Unless the context indicates otherwise, the terms “Verra Mobility,” the “Company,” “we,” “us,” and “our” as used in this Quarterly Report on Form 10-Q refer to Verra Mobility Corporation, a Delaware corporation, and its subsidiaries taken as a whole.

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Part I—Financial Information

Item 1. Financial Statements

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ in thousands, except per share data)		March 31, 2022				December 31, 2021
Assets
Current assets:
Cash and cash equivalents		$	93,377			$	101,283
Restricted cash			4,016				3,149
Accounts receivable (net of allowance for credit losses of $14.3 million and $12.1 million at March 31, 2022 and December 31, 2021, respectively)			171,906				160,979
Unbilled receivables			39,484				29,109
Inventory, net			15,451				12,093
Prepaid expenses and other current assets			38,745				41,456
Total current assets			362,979				348,069
Installation and service parts, net			15,491				13,332
Property and equipment, net			99,351				96,066
Operating lease assets			39,944				38,862
Intangible assets, net			460,083				487,299
Goodwill			837,910				838,867
Other non-current assets			8,727				14,561
Total assets		$	1,824,485			$	1,837,056
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	63,049			$	67,556
Deferred revenue			27,369				27,141
Accrued liabilities			46,668				38,435
Payable to related party pursuant to tax receivable agreement, current portion			5,107				5,107
Current portion of long-term debt			11,952				36,952
Total current liabilities			154,145				175,191
Long-term debt, net of current portion			1,206,276				1,206,802
Operating lease liabilities, net of current portion			35,850				34,984
Payable to related party pursuant to tax receivable agreement, net of current portion			56,615				56,615
Private placement warrant liabilities			42,200				38,466
Asset retirement obligation			12,032				11,824
Deferred tax liabilities, net			28,286				47,524
Other long-term liabilities			13,266				5,686
Total liabilities			1,548,670				1,577,092
Commitments and contingencies (Note 13)
Stockholders' equity
Preferred stock, $0.0001 par value			—				—
Common stock, $0.0001 par value			16				16
Common stock contingent consideration			36,575				36,575
Additional paid-in capital			312,986				309,883
Accumulated deficit			(71,376	)			(81,416	)
Accumulated other comprehensive loss			(2,386	)			(5,094	)
Total stockholders' equity			275,815				259,964
Total liabilities and stockholders' equity		$	1,824,485			$	1,837,056

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

		Three Months Ended March 31,
($ in thousands, except per share data)		2022				2021
Service revenue		$	161,134			$	89,763
Product sales			9,251				95
Total revenue			170,385				89,858
Cost of service revenue			3,779				880
Cost of product sales			5,995				27
Operating expenses			51,063				30,492
Selling, general and administrative expenses			41,635				28,443
Depreciation, amortization and (gain) loss on disposal of assets, net			35,907				28,265
Total costs and expenses			138,379				88,107
Income from operations			32,006				1,751
Interest expense, net			14,279				9,164
Change in fair value of private placement warrants			3,734				2,067
Loss on extinguishment of debt			—				5,334
Other income, net			(2,866	)			(3,013	)
Total other expenses			15,147				13,552
Income (loss) before income taxes			16,859				(11,801	)
Income tax provision (benefit)			6,819				(2,886	)
Net income (loss)		$	10,040			$	(8,915	)
Other comprehensive income (loss):
Change in foreign currency translation adjustment			2,708				(190	)
Total comprehensive income (loss)		$	12,748			$	(9,105	)
Net income (loss) per share:
Basic		$	0.06			$	(0.05	)
Diluted		$	0.06			$	(0.05	)
Weighted average shares outstanding:
Basic			156,130				162,297
Diluted			160,749				162,297

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

For the Three Months Ended March 31, 2022
		Common Stock								Common Stock Contingent				Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders'
(In thousands)		Shares				Amount				Consideration				Capital				Deficit				(Loss) Income				Equity
Balance as of December 31, 2021			156,079			$	16			$	36,575			$	309,883			$	(81,416	)		$	(5,094	)		$	259,964
Net income			—				—				—				—				10,040				—				10,040
Vesting of restricted stock units ("RSUs")			154				—				—				—				—				—				—
Exercise of stock options			7				—				—				93				—				—				93
Payment of employee tax withholding related to RSUs vesting			—				—				—				(1,436	)			—				—				(1,436	)
Stock-based compensation			—				—				—				4,446				—				—				4,446
Other comprehensive income, net of tax			—				—				—				—				—				2,708				2,708
Balance as of March 31, 2022			156,240			$	16			$	36,575			$	312,986			$	(71,376	)		$	(2,386	)		$	275,815
For the Three Months Ended March 31, 2021
Balance as of December 31, 2020			162,269			$	16			$	36,575			$	373,620			$	(94,850	)		$	211			$	315,572
Net loss			—				—				—				—				(8,915	)			—				(8,915	)
Vesting of RSUs			91				—				—				—				—				—				—
Payment of employee tax withholding related to RSUs vesting			—				—				—				(857	)			—				—				(857	)
Stock-based compensation			—				—				—				2,908				—				—				2,908
Other comprehensive loss, net of tax			—				—				—				—				—				(190	)			(190	)
Balance as of March 31, 2021			162,360			$	16			$	36,575			$	375,671			$	(103,765	)		$	21			$	308,518

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

condensed consolidated Statements of Cash Flows

(Unaudited)

 

		Three Months Ended March 31,
($ in thousands)		2022				2021
Cash Flows from Operating Activities:
Net income (loss)		$	10,040			$	(8,915	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			35,675				28,214
Amortization of deferred financing costs and discounts			1,306				1,593
Change in fair value of private placement warrants			3,734				2,067
Loss on extinguishment of debt			—				5,334
Credit loss expense			3,505				2,402
Deferred income taxes			(18,771	)			281
Stock-based compensation			4,446				2,908
Other			354				133
Changes in operating assets and liabilities:
Accounts receivable, net			(14,300	)			(26,672	)
Unbilled receivables			(10,265	)			(859	)
Inventory, net			(5,722	)			(691	)
Prepaid expenses and other assets			8,235				429
Deferred revenue			46				(44	)
Accounts payable and other current liabilities			(477	)			2,374
Other liabilities			13,441				459
Net cash provided by operating activities			31,247				9,013
Cash Flows from Investing Activities:
Payment of contingent consideration			(412	)			—
Purchases of installation and service parts and property and equipment			(11,478	)			(3,704	)
Cash proceeds from the sale of assets			25				56
Net cash used in investing activities			(11,865	)			(3,648	)
Cash Flows from Financing Activities:
Repayment on the revolver			(25,000	)			—
Borrowings of long-term debt			—				996,750
Repayment of long-term debt			(2,255	)			(865,642	)
Payment of debt issuance costs			(54	)			(5,732	)
Payment of debt extinguishment costs			—				(604	)
Proceeds from the exercise of stock options			93				—
Payment of employee tax withholding related to RSUs vesting			(1,436	)			(857	)
Net cash (used in) provided by financing activities			(28,652	)			123,915
Effect of exchange rate changes on cash and cash equivalents			2,231				252
Net (decrease) increase in cash, cash equivalents and restricted cash			(7,039	)			129,532
Cash, cash equivalents and restricted cash - beginning of period			104,432				120,892
Cash, cash equivalents and restricted cash - end of period		$	97,393			$	250,424
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents		$	93,377			$	249,605
Restricted cash			4,016				819
Total cash, cash equivalents, and restricted cash		$	97,393			$	250,424

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

 

		Three Months Ended March 31,
		2022				2021
Supplemental cash flow information:
Interest paid		$	8,188			$	6,996
Income taxes paid, net of refunds			1,147				238
Supplemental non-cash investing and financing activities:
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end			4,057				1,355
Accrued debt issuance costs			—				635
Accrued debt extinguishment costs			—				665

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

Notes to the CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read together with our Annual Report on Form 10-K for the year ended December 31, 2021, and our financial statements included in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021. Please also refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Business Overview

We believe we are a leading provider of smart mobility technology solutions and services throughout the United States, Australia, Europe and Canada. These solutions and services include toll and violations management, title and registration, automated safety solutions, parking enforcement and citation, and other data-driven solutions, to our customers, which include rental car companies (“RACs”), fleet management companies (“FMCs”), other large fleet owners, municipalities, school districts, universities, parking operators, healthcare facilities and transportation hubs and other violation-issuing authorities. Our solutions simplify the smart mobility ecosystem by utilizing what we believe are industry-leading capabilities, information and technology expertise, and integrated hardware and software to efficiently facilitate the automated processing of tolls and violations, automated safety and parking solutions for hundreds of agencies and millions of end users annually, while also making cities and roadways safer for everyone.

Executive Summary

We operate under long-term contracts and have a highly reoccurring service revenue model. We continue to execute on our strategy of growing revenues with existing customers, expanding offerings into adjacent markets through innovation or acquisition and reducing operating costs. During the periods presented, we:

Redflex – During the second quarter of 2021, we acquired Redflex Holdings Limited (“Redflex”), which provides intelligent traffic management products and services to its customers. Through our acquisition of Redflex, we expanded our current footprint in the United States and gained access to international markets.

T2 Systems – During the fourth quarter of 2021, we acquired T2 Systems Parent Corporation (“T2 Systems”), which provides an integrated suite of parking software and hardware solutions and supports our strategy to diversify into new markets and increase opportunities to cross sell to customers within our overall portfolio.

Segment Information

We have three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions:

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Segment performance is based on revenues and income from operations before depreciation, amortization, (gain) loss on disposal of assets, net, and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net.

Primary Components of Our Operating Results

Revenues

Service Revenue. Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs and other large fleet customers. These solutions are full-service offerings by which we enroll the license plates of our customers’ vehicles and transponders with tolling authority accounts, pay tolls and violations on the customers’ behalf and, through proprietary technology, integrate with customer data to match the toll or violation to the driver and then bill the driver (or our customer, as applicable) for use of the service. The cost of certain tolls, violations and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations for our customers.

Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems. Revenue drivers in this segment include the number of systems installed and the monthly revenue per system. Ancillary service revenue is generated in our Government Solutions segment from payment processing, pass-through fees for collection expense, and other fees.

Our Parking Solutions segment generates service revenue mainly from offering software as a service, subscription fees, professional services and citation processing services related to parking management solutions to its customers.

Product Sales. Product sales are generated by the sale of photo enforcement equipment in the Government Solutions segment and specialized hardware in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

Costs and Expenses

 

Cost of Service Revenue. Cost of service revenue consists of collection and other professional services provided by third parties associated with the delivery of certain ancillary services performed by our segments.

 

Cost of Product Sales. Cost of product sales consists of the cost to acquire and install photo enforcement equipment purchased by Government Solutions customers and costs to develop and install hardware sold to Parking Solutions customers.

 

Operating Expenses. Operating expenses include payroll and payroll-related costs (including stock-based compensation), costs related to the operation of our call centers and other operational costs, including transaction processing, print, postage and communication costs.

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees, acquisition costs and general corporate expenses.

 

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets.

Interest Expense, Net. This includes interest expense and amortization of deferred financing costs and discounts and is net of interest income.

 

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Change in Fair Value of Private Placement Warrants. Change in fair value of private placement warrants consists of liability adjustments related to the 6,666,666 Private Placement Warrants originally issued to Gores Sponsor II, LLC re-measured to fair value at the end of each reporting period.

 

Loss on Extinguishment of Debt. Loss on extinguishment of debt generally consists of early payment penalties, the write-off of original issue discounts and deferred financing costs associated with debt extinguishment.

 

Other Income, Net. Other income, net primarily consists of volume rebates earned from total spend on purchasing cards and gain or loss on foreign currency transactions.

Results of Operations

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2022 vs 2021
($ in thousands)		2022				2021				2022				2021				$				%
Service revenue		$	161,134			$	89,763				94.6	%			99.9	%		$	71,371				79.5	%
Product sales			9,251				95				5.4	%			0.1	%			9,156				9637.9	%
Total revenue			170,385				89,858				100.0	%			100.0	%			80,527				89.6	%
Cost of service revenue			3,779				880				2.2	%			1.0	%			2,899				329.4	%
Cost of product sales			5,995				27				3.5	%			0.0	%			5,968				22103.7	%
Operating expenses			51,063				30,492				30.0	%			33.9	%			20,571				67.5	%
Selling, general and administrative expenses			41,635				28,443				24.4	%			31.7	%			13,192				46.4	%
Depreciation, amortization and (gain) loss on disposal of assets, net			35,907				28,265				21.1	%			31.5	%			7,642				27.0	%
Total costs and expenses			138,379				88,107				81.2	%			98.1	%			50,272				57.1	%
Income from operations			32,006				1,751				18.8	%			1.9	%			30,255				1727.9	%
Interest expense, net			14,279				9,164				8.4	%			10.2	%			5,115				55.8	%
Change in fair value of private placement warrants			3,734				2,067				2.2	%			2.3	%			1,667				80.6	%
Loss on extinguishment of debt			—				5,334				—				5.9	%			(5,334	)			(100.0	)%
Other income, net			(2,866	)			(3,013	)			(1.7	)%			(3.4	)%			147				(4.9	)%
Total other expenses			15,147				13,552				8.9	%			15.0	%			1,595				11.8	%
Income (loss) before income taxes			16,859				(11,801	)			9.9	%			(13.1	)%			28,660				242.9	%
Income tax provision (benefit)			6,819				(2,886	)			4.0	%			(3.2	)%			9,705				336.3	%
Net income (loss)		$	10,040			$	(8,915	)			5.9	%			(9.9	)%		$	18,955				212.6	%

 

Service Revenue. Service revenue increased by $71.4 million, or 79.5%, to $161.1 million for the three months ended March 31, 2022 from $89.8 million for the three months ended March 31, 2021, representing 94.6% and 99.9% of total revenue, respectively. The following table depicts service revenue by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2022 vs 2021
($ in thousands)		2022				2021				2022				2021				$				%
Service revenue
Commercial Services		$	73,465			$	45,689				43.1	%			50.9	%		$	27,776				60.8	%
Government Solutions			73,224				44,074				43.0	%			49.0	%			29,150				66.1	%
Parking Solutions			14,445				—				8.5	%			—				14,445			n/a
Total service revenue		$	161,134			$	89,763				94.6	%			99.9	%		$	71,371				79.5	%

 

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Commercial Services service revenue increased by $27.8 million, or 60.8%, from $45.7 million for the three months ended March 31, 2021 to $73.5 million for the three months ended March 31, 2022. This increase was primarily due to the increased travel demand in the RAC industry that impacted volume in the three months ended March 31, 2022 compared to the prior year which was negatively impacted by the COVID-19 pandemic.

Government Solutions service revenue includes revenue from speed, red-light, school bus stop arm and bus lane photo enforcement systems. Service revenue was $73.2 million and $44.1 million for the three months ended March 31, 2022, and 2021, respectively, and it increased by $29.1 million. The Redflex acquisition contributed approximately $17 million to our growth. Organic growth excluding Redflex was approximately $12 million, which was primarily driven by the expansion of school zone speed programs, and speed is the largest product in this segment. We added 779 speed cameras in 2021, excluding Redflex, which provided year-over-year growth in 2022 and 111 speed cameras for the three months ended March 31, 2022 which provided growth in the current period and will continue to provide growth for the remainder of 2022. The remaining growth can be attributable to other expansions and improvement in variable rate programs that returned to more normalized volume as COVID-19 restrictions lifted throughout 2021.

Parking Solutions service revenue of $14.4 million resulted from our acquisition of T2 systems in December 2021 with no revenue in the comparable period.

Product Sales. Product sales were $9.3 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. Product sales increased by $9.2 million which was mainly due to $6.0 million of product revenue generated from the Redflex and T2 Systems acquisitions for which there was no revenue in the comparable 2021 period. Prior to these acquisitions, product revenue was limited to a few large customers whose buying patterns varied greatly from period to period. Product sales for these customers contributed to the remaining increase due to an additional 46 units sold.

Cost of Service Revenue. Cost of service revenue increased from $0.9 million for the three months ended March 31, 2021 to $3.8 million for the three months ended March 31, 2022. The $2.9 million increase was mainly attributable to the inclusion of costs in the Parking Solutions segment with no comparable amounts in the prior year.

Cost of Product Sales. Cost of product sales increased by $5.9 million from less than $0.1 million in the three months ended March 31, 2021 to $6.0 million in the three months ended March 31, 2022, which was consistent with the increase in product sales discussed above.

Operating Expenses. Operating expenses increased by $20.6 million, or 67.5%, from $30.5 million for the three months ended March 31, 2021 to $51.1 million for the three months ended March 31, 2022. The increase was primarily attributable to increase in wages expense, subcontractor expenses, and recurring services resulting from the inclusion of Redflex and T2 Systems operations with no comparable amounts in the prior year. Operating expenses as a percentage of total revenue decreased from 33.9% to 30.0% for the three months ended March 31, 2021 and 2022, respectively which was contributed by the Commercial Services segment's improved operating leverage from its corresponding revenue improvement. The following table presents operating expenses by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2022 vs 2021
($ in thousands)		2022				2021				2022				2021				$				%
Operating expenses
Commercial Services		$	15,947			$	14,206				9.4	%			15.8	%		$	1,741				12.3	%
Government Solutions			32,391				16,092				19.0	%			17.9	%			16,299				101.3	%
Parking Solutions			2,511				—				1.5	%			—				2,511			n/a
Total operating expenses before stock-based compensation			50,849				30,298				29.9	%			33.7	%			20,551				67.8	%
Stock-based compensation			214				194				0.1	%			0.2	%			20				10.3	%
Total operating expenses		$	51,063			$	30,492				30.0	%			33.9	%		$	20,571				67.5	%

 

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Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $41.6 million for the three months ended March 31, 2022 compared to $28.4 million for the same period in 2021. The increase is primarily due to increased wages and information technology expenses due to the inclusion of Redflex and T2 Systems operations in the three months ended March 31, 2022 with no comparable amounts in the prior year. In addition, we had increases of $2.2 million for professional services and $1.5 million related to stock-based compensation expense compared to the prior year, which were partially offset by a decrease in transaction costs of $3.9 million compared to 2021. Selling, general and administrative expenses as a percentage of total revenue decreased from 31.7% to 24.4% for the three months ended March 31, 2021 and 2022, respectively. The following table presents selling, general and administrative expenses by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2022 vs 2021
($ in thousands)		2022				2021				2022				2021				$				%
Selling, general and administrative expenses
Commercial Services		$	13,276			$	10,792				7.8	%			12.0	%		$	2,484				23.0	%
Government Solutions			16,455				10,811				9.7	%			12.1	%			5,644				52.2	%
Parking Solutions			7,672				—				4.5	%			—				7,672			n/a
Corporate and other			—				4,126				—				4.6	%			(4,126	)			(100.0	)%
Total selling, general and administrative expenses before stock-based compensation			37,403				25,729				22.0	%			28.7	%			11,674				45.4	%
Stock-based compensation			4,232				2,714				2.4	%			3.0	%			1,518				55.9	%
Total selling, general and administrative expenses		$	41,635			$	28,443				24.4	%			31.7	%		$	13,192				46.4	%

 

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $7.6 million to $35.9 million for the three months ended March 31, 2022 from $28.3 million for the same period in 2021. This was mainly due to increased amortization and depreciation expense resulting from the Redflex and T2 Systems acquisitions included in the three months ended March 31, 2022 with no comparable amounts in the prior year, partially offset by a decrease due to certain trademark intangibles being fully amortized for the three months ended March 31, 2022.

Interest Expense, Net. Interest expense, net increased by $5.1 million from $9.2 million for the three months ended March 31, 2021 to $14.3 million for the same period in 2022. This increase is primarily attributable to $1.2 billion in average outstanding debt during the three months ended March 31, 2022, compared to $875 million in average outstanding debt for the same period in 2021. See “Liquidity and Capital Resources.”

Change in Fair Value of Private Placement Warrants. We recorded losses of $3.7 million and $2.1 million for the three months ended March 31, 2022 and 2021, respectively, related to the changes in fair value of our Private Placement Warrants which are accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value is the result of re-measurement of the liability at the end of each reporting period.

Other Income, Net. We pay a high volume of tolls on behalf of our customers with purchasing cards which generate rebates based on volume, payment terms and rebate frequency. Other income, net decreased slightly and was $2.9 million for the three months ended March 31, 2022, compared to $3.0 million for the same period in 2021.

Income Tax Provision (Benefit). Income tax provision was $6.8 million with an effective tax rate of 40.4% for the three months ended March 31, 2022 compared to an income tax benefit of $(2.9) million with an effective tax benefit rate of 24.5% for the three months ended March 31, 2021. The primary driver for the effective tax rate variance was the increase in pre-tax income for the first quarter of 2022 compared to the first quarter of 2021.

Net Income (Loss). We had net income of $10.0 million for the three months ended March 31, 2022, as compared to a net loss of $(8.9) million for the three months ended March 31, 2021. The $19.0 million increase in net income was primarily due to increases in both service revenue and product sales, and the other statement of operations activity discussed above.

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Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations and available borrowings under our Revolver (defined below).

We have incurred significant long-term debt as a result of acquisitions completed in the prior years.

We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our availability to borrow under our Revolver (as defined below) will be sufficient to meet operating cash requirements and service debt obligations for at least the next 12 months. Our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. In addition, our future capital expenditures and other cash requirements could be higher than currently expected due to various factors, including any expansion of our business or strategic acquisitions. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowings on our Revolver, or equity financings, all of which may not be available to us on favorable terms or at all.

We have the ability to borrow under our Revolver to meet obligations as they come due. As of March 31, 2022, we had $68.8 million available for borrowing, net of letters of credit, under our Revolver.

On May 7, 2022, the Company’s Board of Directors authorized a share repurchase program for up to an aggregate amount of $125 million of its outstanding shares of Class A common stock over the next twelve months. The level at which the Company repurchases depends on a number of factors, including its financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors its management may deem relevant. The timing, volume and nature of repurchases are subject to market conditions, applicable securities laws and other factors and may be amended, suspended or discontinued at any time.

Concentration of Credit Risk

 

The City of New York Department of Transportation (“NYCDOT”) represented 29% and 39% of total accounts receivable, net as of March 31, 2022 and December 31, 2021, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations.

The following table sets forth certain captions indicated on our statements of cash flows for the respective periods:

 

		Three Months Ended March 31,
($ in thousands)		2022				2021
Net cash provided by operating activities		$	31,247			$	9,013
Net cash used in investing activities			(11,865	)			(3,648	)
Net cash (used in) provided by financing activities			(28,652	)			123,915

 

Cash Flows from Operating Activities

Cash provided by operating activities increased by $22.2 million, from $9.0 million for the three months ended March 31, 2021 to $31.2 million for the three months ended March 31, 2022. Net income year over year increased by $19.0 million, from $8.9 million loss in 2021 to $10.0 million income in 2022. Adjustments to reconcile net income (loss) to cash provided by operating activities were an aggregate decrease of $12.7 million in 2022 compared to 2021. This was primarily due to a change in deferred income taxes and the $5.3 million loss on extinguishment of debt in 2021 with no comparable amount in the 2022 period. These decreases were offset mainly by increased depreciation and amortization resulting from our recent acquisitions, combined with increases in the fair value of the private placement warrants liability, credit loss expense and stock-based compensation expenses. We had an aggregate increase of $16 million in 2022 compared to 2021 for the changes in operating assets and liabilities due to an increase in other liabilities and a decrease in prepaid expenses and other current assets partially offset by increased inventory.

Cash Flows from Investing Activities

Cash used in investing activities was $11.9 million and $3.6 million for the three months ended March 31, 2022 and 2021, respectively, which was mainly related to purchases of installation and service parts and property and equipment. The $7.8 million increase in capital purchases year over year is primarily attributable to our recent acquisitions.

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Cash Flows from Financing Activities

Cash (used in) provided by financing activities was $(28.7) million and $123.9 million for the three months ended March 31, 2022 and 2021, respectively. The cash used in 2022 was mainly due to the repayment of the $25.0 million borrowing on the Revolver in January 2022 and the quarterly principal payment on the 2021 Term Loan at the end of the quarter. We had aggregate borrowings of $996.8 million during the first quarter of 2021 consisting of the 2021 Term Loan and Senior Notes (defined below) and we concurrently repaid $865.6 million outstanding debt on the 2018 Term Loan (defined below). The aggregate borrowings net of the repayments, which totaled $131.2 million, were held as cash and cash equivalents at March 31, 2021 and used in part to fund the close of the Redflex acquisition. We also had payments related to debt issuance costs and debt extinguishment costs during the 2021 period.

Long-term Debt

2021 Term Loan and Senior Notes

In March 2021, VM Consolidated, Inc., our wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “2021 Term Loan”) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $650 million, maturing on March 26, 2028, and an accordion feature providing for an additional $250 million of term loans, subject to satisfaction of certain requirements. In connection with the 2021 Term Loan, we had an offering discount cost of $3.3 million and $0.7 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan.

In addition, in March 2021, VM Consolidated, Inc. issued an aggregate principal amount of $350 million in Senior Unsecured Notes (the “Senior Notes”), due on April 15, 2029. In connection with the issuance of the Senior Notes, we incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes.

The net proceeds from both the 2021 Term Loan and the Senior Notes received in March 2021 were used to repay in full all outstanding debt which was represented by the First Lien Term Loan Credit Agreement (as amended, the “2018 Term Loan”) with a balance of $865.6 million.

On December 7, 2021, VM Consolidated Inc., entered into an agreement to exercise the accordion feature under the 2021 Term Loan, borrowing $250 million in incremental term loans (“Incremental Term Loan”). The proceeds from the Incremental Term Loan were used, along with cash on hand, to fund the acquisition of T2 Systems, including repaying in full all outstanding debt for T2 Systems. In connection with the Incremental Term Loan, we had an offering discount cost of $1.3 million and $3.8 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan. The Incremental Term Loan accrued interest from the date of borrowing until December 31, 2021, at which time, it was combined with the 2021 Term Loan to be a single tranche of term loan borrowings. The total principal outstanding under the 2021 Term Loan, which includes the Incremental Term Loan, was $892.9 million at March 31, 2022.

The 2021 Term Loan is repayable at 1.0% per annum of the amount initially borrowed, paid in quarterly installments. It bears interest based, at our option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. As of March 31, 2022, the interest rate on the 2021 Term Loan was 3.6%.

In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year, beginning with the year ending December 31, 2022), as set forth in the following table:

 

Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement)		Applicable Prepayment Percentage
> 3.70:1.00		50%
< 3.70:1.00 and > 3.20:1.00		25%
< 3.20:1.00		0%

 

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Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. On or after April 15, 2024, we may redeem all or a portion of the Senior Notes at the redemption prices set forth below in percentages by year, plus accrued and unpaid interest:

 

Year		Percentage
2024		102.750%
2025		101.375%
2026 and thereafter		100.000%

 

In addition, we may redeem up to 40% of the Senior Notes before April 15, 2024, with the net cash proceeds from certain equity offerings.

We evaluated the March 2021 refinancing transactions on a lender-by-lender basis and accounted for the portion of the transaction that did not meet the accounting criteria for debt extinguishment as a debt modification. Accordingly, we recognized a loss on extinguishment of debt of $5.3 million on the 2018 Term Loan during the three months ended March 31, 2021 consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the 2021 Term Loan.

PPP Loan

During fiscal year 2020, Redflex received a loan from the U.S. Small Business Administration (“SBA”) as part of the Paycheck Protection Program to offset certain employment and other allowable costs incurred as a result of the COVID-19 pandemic. At March 31, 2022, the loan amount outstanding was $2.9 million and was included in the current portion of long-term debt. In early 2021, Redflex applied for forgiveness of this loan and, as of March 31, 2022, was still awaiting approval from the SBA.

The Revolver

We have a Revolving Credit Agreement (the “Revolver”) with a commitment of up to $75 million available for loans and letters of credit. The Revolver matures on December 20, 2026. Borrowing eligibility under the Revolver is subject to a monthly borrowing base calculation based on (i) certain percentages of eligible accounts receivable and inventory, less (ii) certain reserve items, including outstanding letters of credit and other reserves. The Revolver bears interest on either (1) LIBOR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) LIBOR is either 1.25%, 1.50%, or 1.75%, or (2) the base rate is either 0.25%, 0.50%, or 0.75%, depending on our average availability to borrow under the commitment. At December 31, 2021, we had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. At March 31, 2022, the availability to borrow was $68.8 million, net of $6.2 million of outstanding letters of credit.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and we are also required to pay participation and fronting fees at 1.38% on $6.2 million of outstanding letters of credit as of March 31, 2022.

All borrowings and other extensions of credits under the 2021 Term Loan, Senior Notes and the Revolver are subject to the satisfaction of customary conditions and restrictive covenants including absence of defaults and accuracy in material respects of representations and warranties. Substantially all of our assets are pledged as collateral to secure our indebtedness under the 2021 Term Loan.

On March 31, 2022, we notified our lenders that we were unable to file the Annual Report on Form 10-K within 90 days following the year ended December 31, 2021, as is required under the 2021 Term Loan, Senior Notes, and the Revolver. While we were compliant with all debt covenants at December 31, 2021 and March 31, 2022, the late filing created a technical default when the filing requirement was not met; however, this did not result in an Event of Default under the 2021 Term Loan, Senior Notes, and the Revolver as the Annual Report on Form 10-K was filed within the 30-day cure period allowed by these agreements for late filing of annual financial statements.

 

Interest Expense

We recorded interest expense, including amortization of deferred financing costs and discounts, of $14.3 million and $9.2 million for the three months ended March 31, 2022 and 2021, respectively.

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Off-Balance Sheet Arrangements

We do not have any material off-balance sheet financing arrangements as of March 31, 2022.

Critical Accounting Policies, Estimates and Judgments

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Significant estimates and assumptions include those related to the fair values assigned to net assets acquired (including identifiable intangibles) in business combinations, revenue recognition, inventory valuation, allowance for credit losses, fair value of the private placement warrant liabilities, valuation allowance on deferred tax assets, impairment assessments of goodwill, intangible assets and other long-lived assets, asset retirement obligations, contingent consideration and the recognition and measurement of loss contingencies. Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Refer to our 2021 Annual Report on Form 10-K for our critical accounting policies, estimates and judgments.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate market risk due to the variable interest rate on the 2021 Term Loan described in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.

Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the 2021 Term Loan, which has an outstanding balance of $892.9 million at March 31, 2022. The 2021 Term Loan bears interest based, at our option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. At March 31, 2022, the interest rate on the 2021 Term Loan was 3.6%. Based on the March 31, 2022 balance outstanding, each 1% movement in interest rates will result in an approximately $8.9 million change in annual interest expense.

We have not engaged in any hedging activities during the three months ended March 31, 2022. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of March 31, 2022 and, based on their evaluation, have concluded the controls and procedures were ineffective as the material weaknesses in internal control over financial reporting that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 were not yet remediated during the first quarter of fiscal year 2022.

Remediation

As previously described in Part II, Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2021, management commenced implementation of remediation plans which are ongoing to address the material weaknesses mentioned above. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of these material weaknesses will be completed prior to the end of our 2022 fiscal

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year. The following steps of the remediation plan are currently in process, and management may determine to enhance existing controls and/or implement additional controls as the implementation progresses:

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II—Other Information

Item 1. Legal Proceedings

On November 2, 2020, PlusPass, Inc. (“PlusPass”) commenced an action in the United States District Court, Central District of California, against Verra Mobility Corporation (“Verra Mobility”), The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc., alleging civil violations of federal antitrust statutes: Section 7 of the Clayton Antitrust Act of 1914 (the “Clayton Act”), and Sections 1 and 2 of the Sherman Act. On November 20, 2020, PlusPass filed a First Amended Complaint. On February 9, 2021, the defendants filed motions to dismiss, and PlusPass subsequently abandoned various theories and claims and dismissed The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc. On April 27, 2021, PlusPass filed a Second Amended Complaint (“SAC”), alleging that Verra Mobility violated Section 7 of the Clayton Act through the merger of Highway Toll Administration, LLC (“HTA”) and American Traffic Solutions, Inc. (“ATS”) in 2018, and that Verra Mobility violated Sections 1 and 2 of the Sherman Antitrust Act of 1890 by using exclusive agreements in restraint of trade and other allegedly anticompetitive means to acquire and maintain monopoly power in the market for the administration of electronic toll payment collection for rental cars. PlusPass seeks injunctive relief, divestiture by Verra Mobility of HTA, damages in an amount to be determined, and attorneys’ fees and costs. On May 28, 2021, Verra Mobility filed a motion to dismiss the SAC in its entirety, which was denied in August 2021. Discovery is underway. Verra Mobility believes that all of PlusPass' claims are without merit and will defend itself vigorously in this litigation.

Item 1A. Risk Factors

Risks Related to Our Business

Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 includes a discussion of our risk factors. Other than the risk factor discussed below, there have been no material changes from the risk factors described in our Annual Report on Form 10-K. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future SEC filings.

 

We cannot guarantee that our stock repurchase program will be consummated, fully or at all, or that it will enhance long-term shareholder value. Stock repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves.

 

In May 2022, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $125 million of our outstanding shares of Class A common stock over the next twelve months. The timing, price, and quantity of purchases under the program will be at the discretion of our management and will depend upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. The program may be amended, suspended or discontinued by our Board of Directors at any time. Although our Board of Directors has authorized this stock repurchase program, there is no guarantee as to the exact number of shares, if any, that will be repurchased by us, and we may discontinue purchases at any time if management determines additional purchases are not warranted. We cannot guarantee that the program will be consummated, fully or at all, or that it will enhance long-term stockholder value. The program could affect the trading price of our common stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock. In addition, this program could diminish our cash reserves.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit Index

 

		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1	Merger Agreement, dated as of June 21, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.1	June 21, 2018
2.2	Amendment No. 1 to Agreement and Plan of Merger, dated as of August 23, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.2	August 24, 2018
3.1	Second Amended and Restated Certificate of Incorporation of Verra Mobility Corporation.	8-K	001-37979	3.1	October 22, 2018
3.2	Amended and Restated Bylaws of Verra Mobility Corporation.	8-K	001-37979	3.2	October 22, 2018
4.1	Specimen Class A Common Stock Certificate.	S-1	333-21503	4.2	December 9, 2016
4.2	Specimen Warrant Certificate.	S-1	333-21503	4.3	December 9, 2016
4.3	Warrant Agreement, dated January 12, 2017, between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent.	8-K	001-37979	4.1	January 19, 2017
4.4	First Amendment to Warrant Agreement, dated January 15, 2020, by and among the Registrant, Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company.	10-K	001-37979	4.4	March 2, 2020
10.1	Separation and Release Agreement, dated April 11, 2022, between Patricia Chiodo and Verra Mobility Corporation.					X
10.2#	Amended and Restated Verra Mobility Corporation Short-Term Incentive Plan.	8-K	001-37979	10.1	April 28, 2022
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

 

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101.INS	Inline XBRL Instance Document (the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)					X
* This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

 

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	VERRA MOBILITY CORPORATION
Date: May 9, 2022	By:	/s/ David Roberts
		David Roberts
		President and Chief Executive Officer
		(Principal Executive Officer)

 

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