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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 June 30, 2021

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:

 

Class A Common Stock, par value $0.0001 per share

 

VRRM

 

Nasdaq Capital Market

(Title of Each Class)

 

(Trading Symbol)

 

(Name of Each Exchange on Which Registered)

 

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 August 4, 2021, there were 162,410,137 shares of the Company’s Class A Common Stock, par value $0.0001 per share, issued and outstanding.

 

 

 


 

VERRA MOBILITY CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2021

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

 

33

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

45

Item 4. Controls and Procedures

 

45

PART II—OTHER INFORMATION

 

46

Item 1. Legal Proceedings

 

46

Item 1A. Risk Factors

 

46

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

 

47

Item 3. Defaults Upon Senior Securities

 

47

Item 4. Mine Safety Disclosures

 

47

Item 5. Other Information

 

47

Item 6. Exhibits

 

48

SIGNATURES

 

50

 

2


 

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 II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q and in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K/A for the year ended December 31, 2020, filed on May 17, 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:

 

the impact of payment delays related to $127.0 million in outstanding receivables with the City of New York Department of Transportation (“NYCDOT”);

 

disruption to our business and results of operations as a result of the novel coronavirus (“COVID-19”) pandemic;

 

the impact of the COVID-19 pandemic on our revenues from key customers in the rental car industry and from photo enforcement programs;

 

historical data regarding our business, results of operations, financial condition and liquidity may not reflect the impact of COVID-19;

 

customer concentration in our Commercial Services and Government Solutions segments;

 

decreases in the prevalence of automated and other similar methods of photo enforcement or the use of tolling;

 

risks and uncertainties related to our government contracts, including legislative changes, termination rights, delays in payments, audits and investigations;

 

decreased interest in outsourcing from our customers;

 

our ability to properly perform under our contracts and otherwise satisfy our customers;

 

our ability to compete in a highly competitive and rapidly evolving market;

 

our ability to keep up with technological developments and changing customer preferences;

 

the success of our new products and changes to existing products and services;

 

our ability to successfully integrate our recent or future acquisitions, including, but not limited to, our June 2021 acquisition of Redflex (as defined herein); and

 

failure in or breaches of our networks or systems, including as a result of cyber-attacks.

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

3


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.

4


Part I—Financial Information

Item 1. Financial Statements.

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

June 30,

2021

 

 

December 31,

2020

 

($ in thousands except per share data)

 

 

 

 

 

(As restated)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

147,346

 

 

$

120,259

 

Restricted cash

 

 

3,159

 

 

 

633

 

Accounts receivable (net of allowance for credit loss of $12.7 million and

$11.5 million at June 30, 2021 and December 31, 2020, respectively)

 

 

214,925

 

 

 

168,783

 

Unbilled receivables

 

 

23,871

 

 

 

14,045

 

Prepaid expenses and other current assets

 

 

32,255

 

 

 

24,317

 

Total current assets

 

 

421,556

 

 

 

328,037

 

Installation and service parts, net

 

 

10,186

 

 

 

7,944

 

Property and equipment, net

 

 

94,308

 

 

 

70,284

 

Operating lease assets

 

 

34,662

 

 

 

29,787

 

Intangible assets, net

 

 

340,637

 

 

 

342,139

 

Goodwill

 

 

641,517

 

 

 

586,435

 

Other non-current assets

 

 

16,325

 

 

 

2,699

 

Total assets

 

$

1,559,191

 

 

$

1,367,325

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

47,403

 

 

$

34,509

 

Accrued liabilities

 

 

44,728

 

 

 

15,636

 

Payable to related party pursuant to tax receivable agreement, current portion

 

 

5,202

 

 

 

4,791

 

Current portion of long-term debt

 

 

9,410

 

 

 

9,104

 

Total current liabilities

 

 

106,743

 

 

 

64,040

 

Long-term debt, net of current portion

 

 

966,066

 

 

 

832,941

 

Operating lease liabilities, net of current portion

 

 

32,720

 

 

 

27,986

 

Payable to related party pursuant to tax receivable agreement, net of current portion

 

 

64,329

 

 

 

67,869

 

Private placement warrant liabilities

 

 

41,000

 

 

 

30,866

 

Asset retirement obligation

 

 

10,059

 

 

 

6,409

 

Deferred tax liabilities, net

 

 

20,790

 

 

 

21,148

 

Other long-term liabilities

 

 

1,059

 

 

 

494

 

Total liabilities

 

 

1,242,766

 

 

 

1,051,753

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $.0001 par value

 

 

 

 

 

 

Common stock, $.0001 par value

 

 

16

 

 

 

16

 

Common stock contingent consideration

 

 

36,575

 

 

 

36,575

 

Additional paid-in capital

 

 

379,235

 

 

 

373,620

 

Accumulated deficit

 

 

(99,773

)

 

 

(94,850

)

Accumulated other comprehensive income

 

 

372

 

 

 

211

 

Total stockholders' equity

 

 

316,425

 

 

 

315,572

 

Total liabilities and stockholders' equity

 

$

1,559,191

 

 

$

1,367,325

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

5


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

($ in thousands, except per share data)

 

 

 

 

 

(As restated)

 

 

 

 

 

 

(As restated)

 

Service revenue

 

$

116,426

 

 

$

62,815

 

 

$

206,189

 

 

$

162,312

 

Product sales

 

 

12,231

 

 

 

16,994

 

 

 

12,326

 

 

 

34,210

 

Total revenue

 

 

128,657

 

 

 

79,809

 

 

 

218,515

 

 

 

196,522

 

Cost of service revenue

 

 

1,332

 

 

 

1,013

 

 

 

2,212

 

 

 

2,232

 

Cost of product sales

 

 

6,144

 

 

 

9,060

 

 

 

6,171

 

 

 

17,750

 

Operating expenses

 

 

36,434

 

 

 

26,699

 

 

 

66,926

 

 

 

58,958

 

Selling, general and administrative expenses

 

 

26,229

 

 

 

20,821

 

 

 

54,672

 

 

 

46,707

 

Depreciation, amortization and (gain) loss on disposal of assets, net

 

 

27,012

 

 

 

29,166

 

 

 

55,277

 

 

 

58,412

 

Total costs and expenses

 

 

97,151

 

 

 

86,759

 

 

 

185,258

 

 

 

184,059

 

Income (loss) from operations

 

 

31,506

 

 

 

(6,950

)

 

 

33,257

 

 

 

12,463

 

Interest expense, net

 

 

11,680

 

 

 

9,539

 

 

 

20,844

 

 

 

21,990

 

Change in fair value of private placement warrants

 

 

8,067

 

 

 

8,334

 

 

 

10,134

 

 

 

(7,133

)

Tax receivable agreement liability adjustment

 

 

1,661

 

 

 

4,446

 

 

 

1,661

 

 

 

4,446

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

5,334

 

 

 

 

Other income, net

 

 

(2,798

)

 

 

(1,523

)

 

 

(5,811

)

 

 

(4,448

)

Total other expenses

 

 

18,610

 

 

 

20,796

 

 

 

32,162

 

 

 

14,855

 

Income (loss) before income taxes

 

 

12,896

 

 

 

(27,746

)

 

 

1,095

 

 

 

(2,392

)

Income tax provision (benefit)

 

 

8,904

 

 

 

(4,024

)

 

 

6,018

 

 

 

(810

)

Net income (loss)

 

$

3,992

 

 

$

(23,722

)

 

$

(4,923

)

 

$

(1,582

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

351

 

 

 

(508

)

 

 

161

 

 

 

(3,875

)

Total comprehensive income (loss)

 

$

4,343

 

 

$

(24,230

)

 

$

(4,762

)

 

$

(5,457

)

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

(0.15

)

 

$

(0.03

)

 

$

(0.01

)

Diluted

 

$

0.02

 

 

$

(0.15

)

 

$

(0.03

)

 

$

(0.01

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

162,378

 

 

 

161,710

 

 

 

162,338

 

 

 

161,317

 

Diluted

 

 

166,028

 

 

 

161,710

 

 

 

162,338

 

 

 

161,317

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

6


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

For the Three and Six Months Ended June 30, 2021

 

 

 

Common

Stock

 

 

Common

Stock

Contingent

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

(In thousands)

 

Shares

 

 

Amount

 

 

Consideration

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance as of December 31, 2020 (as restated)

 

 

162,269

 

 

$

16

 

 

$

36,575

 

 

$

373,620

 

 

$

(94,850

)

 

$

211

 

 

$

315,572

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,915

)

 

 

 

 

 

(8,915

)

Vesting of restricted stock units ("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

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,992

 

 

 

 

 

 

3,992

 

Vesting of RSUs

 

 

41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

7

 

 

 

 

 

 

 

 

 

87

 

 

 

 

 

 

 

 

 

87

 

Payment of employee tax withholding related to RSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(96

)

 

 

 

 

 

 

 

 

(96

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

3,573

 

 

 

 

 

 

 

 

 

3,573

 

Other comprehensive gain, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

351

 

 

 

351

 

Balance as of June 30, 2021

 

 

162,408

 

 

$

16

 

 

$

36,575

 

 

$

379,235

 

 

$

(99,773

)

 

$

372

 

 

$

316,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three and Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2019 (as restated)

 

 

159,150

 

 

$

16

 

 

$

54,862

 

 

$

346,891

 

 

$

(89,578

)

 

$

(2,577

)

 

$

309,614

 

Net income (as restated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,140

 

 

 

 

 

 

22,140

 

Cumulative effect of adoption of the credit loss accounting standard, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(694

)

 

 

 

 

 

(694

)

Earn-out shares issued to Platinum Stockholder

 

 

2,500

 

 

 

 

 

 

(18,287

)

 

 

18,287

 

 

 

 

 

 

 

 

 

 

Vesting of RSUs

 

 

42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of employee tax withholding related to RSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(327

)

 

 

 

 

 

 

 

 

(327

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

2,768

 

 

 

 

 

 

 

 

 

2,768

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,367

)

 

 

(3,367

)

Balance as of March 31, 2020 (as restated)

 

 

161,692

 

 

 

16

 

 

 

36,575

 

 

 

367,619

 

 

 

(68,132

)

 

 

(5,944

)

 

 

330,134

 

Net loss (as restated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,722

)

 

 

 

 

 

(23,722

)

Vesting of RSUs

 

 

45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of employee tax withholding related to RSUs vesting

 

 

 

 

 

 

 

 

 

 

 

(25

)

 

 

 

 

 

 

 

 

(25

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

3,271

 

 

 

 

 

 

 

 

 

3,271

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(508

)

 

 

(508

)

Balance as of June 30, 2020 (as restated)

 

 

161,737

 

 

$

16

 

 

$

36,575

 

 

$

370,865

 

 

$

(91,854

)

 

$

(6,452

)

 

$

309,150

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

7


VERRA MOBILITY CORPORATION

condensed consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

($ in thousands)

 

 

 

 

 

(As restated)

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(4,923

)

 

$

(1,582

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

55,227

 

 

 

58,409

 

Amortization of deferred financing costs and discounts

 

 

2,722

 

 

 

2,106

 

Change in fair value of private placement warrants

 

 

10,134

 

 

 

(7,133

)

Tax receivable agreement liability adjustment

 

 

1,661

 

 

 

4,446

 

Loss on extinguishment of debt

 

 

5,334

 

 

 

 

Credit loss expense

 

 

3,863

 

 

 

10,723

 

Deferred income taxes

 

 

(825

)

 

 

(2,496

)

Stock-based compensation

 

 

6,481

 

 

 

6,039

 

Other

 

 

257

 

 

 

691

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(42,970

)

 

 

(43,183

)

Unbilled receivables

 

 

(2,098

)

 

 

7,476

 

Prepaid expenses and other assets

 

 

(1,177

)

 

 

7,979

 

Accounts payable and accrued liabilities

 

 

4,337

 

 

 

(17,863

)

Other liabilities

 

 

(545

)

 

 

(3,069

)

Net cash provided by operating activities

 

 

37,478

 

 

 

22,543

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Acquisition of business, net of cash and restricted cash acquired

 

 

(107,004

)

 

 

 

Purchases of installation and service parts and property and equipment

 

 

(8,257

)

 

 

(14,301

)

Cash proceeds from the sale of assets

 

 

159

 

 

 

49

 

Net cash used in investing activities

 

 

(115,102

)

 

 

(14,252

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Borrowings of long-term debt

 

 

996,750

 

 

 

 

Repayment of long-term debt

 

 

(881,281

)

 

 

(24,227

)

Payment of debt issuance costs

 

 

(6,507

)

 

 

(922

)

Payment of debt extinguishment costs

 

 

(1,066

)

 

 

 

Proceeds from exercise of stock options

 

 

87

 

 

 

 

Payment of employee tax withholding related to RSUs vesting

 

 

(953

)

 

 

(352

)

Net cash provided by (used in) financing activities

 

 

107,030

 

 

 

(25,501

)

Effect of exchange rate changes on cash and cash equivalents

 

 

207

 

 

 

(1,270

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

29,613

 

 

 

(18,480

)

Cash, cash equivalents and restricted cash - beginning of period

 

 

120,892

 

 

 

132,430

 

Cash, cash equivalents and restricted cash - end of period

 

$

150,505

 

 

$

113,950

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

8


VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Interest paid

 

$

13,054

 

 

$

20,201

 

Income taxes paid, net of refunds

 

 

4,995

 

 

 

1,135

 

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

 

 

3,358

 

 

 

3,238

 

Earn-out shares issued to Platinum Stockholder

 

 

 

 

 

18,287

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

9


VERRA MOBILITY CORPORATION

Notes to the CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.

Description of Business

Verra Mobility Corporation (collectively with its subsidiaries, the “Company” or “Verra Mobility”), formerly known as Gores Holdings II, Inc. (“Gores”), was originally incorporated in Delaware on August 15, 2016, as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On January 19, 2017, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Capital Market (“Nasdaq”). On June 21, 2018, Gores entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Greenlight Holding II Corporation, PE Greenlight Holdings, LLC, AM Merger Sub I, Inc., a direct, wholly-owned subsidiary of Gores and AM Merger Sub II, LLC, a direct, wholly-owned subsidiary of Gores. On October 17, 2018, the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, Gores changed its name to Verra Mobility Corporation. As a result of the Business Combination, Verra Mobility Corporation became the owner, directly or indirectly, of all of the equity interests of Verra Mobility Holdings, LLC and its subsidiaries.

Verra Mobility offers integrated technology solutions and services to commercial fleets, rental car companies, state and local governments domestically, and government agencies internationally. The Company has customers located throughout the world, primarily within the United States, Australia, Europe and Canada. The Company is organized into two operating segments: Commercial Services and Government Solutions (see Note 14).

The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries by partnering with the leading fleet management and rental car companies in North America. Electronic toll payment services enable fleet drivers and rental car customers to use high-speed cashless toll lanes or all-electronic cashless toll roads. The service helps commercial fleets reduce toll management costs, while it provides rental car companies with a revenue-generating, value-added service for their customers. Electronic violation processing services reduce the cost and risk associated with vehicle-issued violations, such as toll, parking or camera-enforced tickets. Title and registration services offer title and registration processing for individuals, rental car companies and fleet management companies. In Europe, the Company provides violations processing through Euro Parking Collection plc (“EPC”) and consumer tolling services through Pagatelia S.L (“Pagatelia”).

The Government Solutions segment offers photo enforcement solutions and services to its customers. Through its recent acquisition of Redflex Holdings Limited (“Redflex”) on June 17, 2021, the Company expanded its current footprint in the United States and gained access to international markets (see Note 3). The Government Solutions segment provides complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions within the United States and Canada. These programs are designed to reduce traffic violations and resulting collisions, injuries, and fatalities. The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. The newly acquired international operations through Redflex primarily involve the sale of traffic enforcement products and related maintenance services.