On October 14, 2019, the Company acquired substantially all of the assets of APS Payments (“APS”) for $30.5 million in cash. In addition to the $30.5 million cash consideration, which includes the net working capital adjustment settled in the three months ended June 30, 2020, the APS selling equity holders may be entitled to a total of $30.0 million in three separate cash earnout payments (“APS Earnout”), dependent on the achievement of certain growth targets. The asset purchase agreement between Repay and APS contains customary representations, warranties and covenants by

Repay and the former owners of APS, as well as a customary post-closing adjustment provision relating to working capital and similar items.

The following summarizes the preliminary purchase consideration paid to the selling members of APS:

The Company recorded a preliminary allocation of the purchase price to APS Payments’ tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the October 11, 2019 closing date. The preliminary purchase price allocation is as follows:

Cash and cash equivalents	$	-
Accounts receivable		1,963,177
Prepaid expenses and other current assets		67,158
Total current assets		2,030,335
Property, plant and equipment, net		159,553
Restricted cash		549,978
Identifiable intangible assets		21,500,000
Total identifiable assets acquired		24,239,866
Accounts payable		(1,101,706	)
Accrued expenses		(19,018	)
Net identifiable assets acquired		23,119,142
Goodwill		25,926,861
Total purchase price	$	49,046,003

The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows:

	Fair Value		Useful life
Identifiable intangible assets	(in millions)		(in years)
Non-compete agreements	$	0.5	5
Trade names		0.5	Indefinite
Merchant relationships		20.5	9
	$	21.5

Goodwill of $25.9 million, represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of the strong market position and the assembled workforce of APS Payments.

Upon closing the Ventanex acquisition, the Company acquired all of the ownership interests of CDT Technologies, LTD d/b/a Ventanex (“Ventanex”). Ventanex is an integrated payment solutions provider to consumer finance (including mortgage servicers) and business-to-business (“B2B”) healthcare verticals. The mortgage loan servicer and B2B healthcare verticals represent a material expansion of our existing focus. Ventanex’s focus on mortgage payments allowed the Company to expand its personal loan business. Further, the Ventanex acquisition accelerated the Company’s entry into the healthcare payments vertical.

Under the terms of the securities purchase agreement between Repay Holdings, LLC and the direct and indirect owners of CDT Technologies, LTD. (“Ventanex Purchase Agreement”), the aggregate consideration paid at closing by the Company was approximately $36 million in cash. In addition to the closing consideration, the Ventanex Purchase Agreement contains a performance-based earnout (the “Ventanex Earnout Payment”), which was based on future results of the acquired business and could result in an additional payment to the former owners of Ventanex of up to $14 million. The Ventanex acquisition was financed with a combination of cash on hand and committed borrowing capacity under the Company’s existing credit facility. The Ventanex Purchase Agreement contains customary representations, warranties and covenants by Repay and the former owners of Ventanex, as well as a customary post-closing adjustment provision relating to working capital and similar items.

The following summarizes the preliminary purchase consideration paid to the selling members of Ventanex:

The Company recorded a preliminary allocation of the purchase price to Ventanex’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the February 10, 2020 closing date. The preliminary purchase price allocation is as follows:

Cash and cash equivalents	$	50,663
Accounts receivable		1,376,539
Prepaid expenses and other current assets		180,514
Total current assets		1,607,716
Property, plant and equipment, net		137,833
Restricted cash		428,313
Identifiable intangible assets		29,690,000
Total identifiable assets acquired		31,863,862
Accounts payable		(152,035	)
Accrued expenses		(373,159	)
Net identifiable assets acquired		31,338,668
Goodwill		15,461,332
Total purchase price	$	46,800,000

The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows:

	Fair Value		Useful life
Identifiable intangible assets	(in millions)		(in years)
Non-compete agreements	$	0.1	5
Trade names		0.5	Indefinite
Developed technology		4.4	3
Merchant relationships		24.7	10
	$	29.7

Goodwill of $15.5 million, represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of the strong market position and the assembled workforce of Ventanex.

The Company incurred transaction expenses of $1.0 million and $1.0 million for the three and six months ended June 30, 2020, respectively, related to the Ventanex acquisition. Ventanex has contributed $4.4 million to revenue and $0.0 million in net income to the Company’s unaudited interim consolidated statement of operations, from February 10, 2020 through June 30, 2020. APS contributed $3.3 million to revenue and $0.0 million in net income to the Company’s unaudited interim consolidated statement of operations for the three months ended June 30, 2020. APS contributed $6.9 million to revenue and $0.7 million in net income to the Company’s unaudited interim consolidated statement of operations for the six months ended June 30, 2020.

The supplemental condensed consolidated results of the Company on an unaudited pro forma basis give effect to the TriSource, APS and Ventanex acquisitions as if the transactions had occurred on January 1, 2019. The unaudited pro forma information reflects adjustments for the issuance of the Company’s common stock, debt incurred in connection with the transactions, the impact of the fair value of intangible assets acquired and related amortization and other adjustments the Company believes are reasonable for the pro forma presentation. In addition, the pro forma earnings exclude acquisition-related costs.

	Pro Forma Three Months Ended June 30, 2020			Pro Forma Six Months Ended June 30, 2020			Pro Forma Three Months Ended June 30, 2019			Pro Forma Six Months Ended June 30, 2019
Revenue	$	36,500,525		$	78,256,837		$	29,582,615		$	63,916,655
Net loss		(16,486,773	)		(21,071,965	)		(7,140,070	)		(15,068,420	)
Net loss attributable to non-controlling interests		(3,885,984	)		(6,084,209	)		(3,528,354	)		(6,148,671	)
Net loss attributable to the Company		(12,600,789	)		(14,987,756	)		(3,611,716	)		(8,919,749	)

Loss per Class A share - basic and diluted	$	(0.30	)	$	(0.38	)	$	(0.09	)	$	(0.22	)