0001558370-24-004558 | 10-K | XBRL Viewer

December 31,

(dollars in thousands)

Balance at of November 29, 2023

Reduction in the fair value of the private warrants liability

Balance at of December 31, 2023

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Employee Benefit Plans - Fair value of plan assets by asset category (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair value of plan assets by asset category
Aggregate fair value of plan assets	$ 52,081	$ 45,694
Level 1
Fair value of plan assets by asset category
Aggregate fair value of plan assets	941	932
Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	51,140	44,762
Cash
Fair value of plan assets by asset category
Aggregate fair value of plan assets	941	932
Cash \| Level 1
Fair value of plan assets by asset category
Aggregate fair value of plan assets	941	932
U.K. and other international equities
Fair value of plan assets by asset category
Aggregate fair value of plan assets	13,297	11,400
U.K. and other international equities \| Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	13,297	11,400
U.K. government and corporate bonds
Fair value of plan assets by asset category
Aggregate fair value of plan assets	2,671	2,529
U.K. government and corporate bonds \| Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	2,671	2,529
Diversified growth fund
Fair value of plan assets by asset category
Aggregate fair value of plan assets	7,846	8,417
Diversified growth fund \| Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	7,846	8,417
Liability driven investments
Fair value of plan assets by asset category
Aggregate fair value of plan assets	26,488	20,258
Liability driven investments \| Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	26,488	20,258
Multi-asset credit fund
Fair value of plan assets by asset category
Aggregate fair value of plan assets	838	2,158
Multi-asset credit fund \| Level 2
Fair value of plan assets by asset category
Aggregate fair value of plan assets	$ 838	$ 2,158

Related Parties - Transaction Details (Details) - Related Party - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Related Parties
Revenue, net	$ 200	$ 100
Purchases from related party	1,000	5,300
Shared service expenses and general corporate expenses	3,515	4,051
Royalty Expense	631	631
Management Fee	$ 537	$ 3,627

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 40
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Section 50
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-Publisher FASB
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Debt

12 Months Ended

Dec. 31, 2023

Debt

Debt

11.Debt

Secured Borrowing Facility

On August 25, 2020, certain entities entered into an agreement wherein amounts due from clients were pledged to a third party, in exchange for a borrowing facility in amounts up to a total of €31.0 million (the “Secured Borrowing Facility”). The proceeds from the Secured Borrowing Facility were determined by the amounts invoiced to the Company’s clients. The amounts due from clients were recorded in accounts receivable and the amount due to the third party as a liability, presented under “Current portion of long-term debt” on the consolidated balance sheets. The cost of the Secured Borrowing Facility was 0.10% of newly assigned receivables with minimum of €0.1 million in annual fees and the Secured Borrowing Facility bore interest at Euribor rate plus 0.70% on the unpaid principal amount. During the years ended December 31, 2023 and 2022, the Company incurred interest expense of $0.6 million and $0.3 million, respectively, related to the Secured Borrowing Facility. As of December 31, 2023 and 2022, the outstanding balances payable under the Secured Borrowing Facility were $0.1 million and $4.1 million, respectively.

On September 15, 2023, the relevant entities entered into an amendment to the Secured Borrowing Facility (the “Amended Factoring Agreement”) to convert the existing arrangement into a non-recourse factoring program wherein an unrelated third party (the “Factor”) shall provide financing to certain subsidiaries of the Company by purchase of certain approved and partially approved accounts receivables (as defined in the Amended Factoring Agreement) up to a maximum amount of €15.0 million while assuming the risk of non-payment on the purchased accounts receivables up to the level of approval. The relevant entities shall have no continuing involvement in the transferred accounts receivable, other than collection and administrative responsibilities and, once sold, the accounts receivable shall no longer be available to satisfy creditors of the relevant entities.

The Company accounted for the transactions under the Amended Factoring Agreement as a sale under ASC 860, Transfers and Servicing, and treats it as an off-balance sheet arrangement. Net funds received from the transfers reflect the face value of the account less a fee, which is recorded as an increase to cash and a reduction to accounts receivable outstanding in the consolidated balance sheets. The Company reports the cash flows attributable to the sale of account receivables to the Factor and the cash receipts from collections made on behalf of and paid to the Factor under the Amended Factoring Agreement, on a net basis as trade accounts receivables in cash flows from operating activities in the Company’s consolidated statements of cash flows.

During the year ended December 31, 2023, the Company factored accounts receivable invoices totaling approximately $6.8 million pursuant to the Amended Factoring Agreement, representing the face value of the invoices. The Company recognizes factoring costs upon disbursement of funds. The Company incurred a loss on sale of accounts receivables including expenses pursuant to the Amended Factoring Agreement totaling approximately $0.3 million for the year ended December 31, 2023, which is presented in selling, general and administrative expenses (exclusive of depreciation and amortization) on the consolidated statements of operations.

2019 Credit Agreement

In October 2019, a wholly-owned UK subsidiary of XBP Europe (the “UK Subsidiary”) entered into a secured credit agreement (the “2019 Credit Agreement”) for a £9.0 million Secured Credit Facility (the “Secured Credit Facility”) consisting of (i) a secured Term Loan A facility in an aggregate principal amount of £2.0 million (the “Term Loan A Facility”), (ii) a secured Term Loan B facility in an aggregate principal amount of £2.0 million (the “Term Loan B Facility”), and (iii) a secured revolving credit facility in an aggregate principal amount of £5.0 million (the “Revolving Credit Facility”). On December 21, 2022, the UK Subsidiary amended its 2019 Credit Agreement, allowing the UK Subsidiary to affirm to extend the maturity of Term Loan A Facility and Term Loan B Facility to October 31, 2024 subject to compliance with financial covenants. On February 9, 2023, the UK Subsidiary amended its 2019 Credit Agreement, allowing the UK Subsidiary to extend the maturity of the Revolving Credit Facility to October 31, 2024 subject to compliance with financial covenants. On October 29, 2023, the maturity of the Revolving Credit Facility was extended to January 31, 2025. On March 14, 2024 the maturity was further extended to April 30, 2025. As of December 31, 2023, the outstanding balance of the Term Loan A Facility, the Term Loan B Facility, and the Revolving Credit Facility was approximately $1.9 million, $0.4 million, and $6.4 million, respectively. As of December 31, 2022, the outstanding balance of the Term Loan A Facility, the Term Loan B Facility, and the Revolving Credit Facility was approximately $1.9 million, $1.0 million, and $6.0 million, respectively.

The 2019 Credit Agreement contains financial covenants including, but not limited to (a) a Combined Cashflow Coverage Ratio, which measures the ratio of (i) Combined Cashflow and (ii) Debt Service defined as finance charges in addition to mandatory repayments in respect to the 2019 Credit Agreement, (b) Combined Interest Coverage Ratio, which measures the ratio of (i) Combined EBITDA to (ii) Combined Finance Charges, (c) a Combined Total Net Leverage Ratio, which measures the ratio of (i) Combined Net Indebtedness in respect to the last day of the most recent period to (ii) EBITDA, (d) Guaranteed Intragroup Balances, (e) the Loan to Market Value defined as the Facility A Loan outstanding to the market value of the property in each case, as defined in the 2019 Credit Agreement. The term “Combined” refers to the UK Subsidiary and its wholly-owned subsidiaries.

The 2019 Credit Agreement and indenture governing the Secured Credit Facility contains limitations on the ability of the UK subsidiary to effect mergers and change of control events as well as certain other limitations, including limitations on: (i) the declaration and payment of dividends or other restricted payments (ii) substantial changes of the general nature of the business, (iii) acquisition of a company, (iv) enter a joint venture, (v) or effect a dormant subsidiary to commence trading or cease to satisfy the criteria of a dormant subsidiary.

The UK Subsidiary’s obligations under the 2019 Credit Agreement are jointly and severally guaranteed by certain of its existing and future direct and indirectly wholly owned subsidiaries. The 2019 Credit Agreement and the 2022 Committed Facility Agreement (defined below) contain cross default provisions which relate to the UK Subsidiary and its subsidiaries, but not any other entities within the consolidated group.

At inception, borrowings under the Secured Credit Facility bore interest at a rate per annum equal to the LIBOR plus the applicable margin of 2%, 2.5%, and 3% per annum for the Term Loan A Facility, the Term Loan B Facility, and the Revolving Credit Facility respectively. Effective October 29, 2021, borrowings under the Revolving Credit Facility bore interest at a rate per annum equal to the SONIA plus the applicable margin of 3%. Effective December 31, 2021, borrowings under the Term Loan A Facility and the Term Loan B Facility bore interest at a rate per annum equal to the SONIA plus the applicable margin of 2% and 2.5%, respectively.

In June 2020, the UK Subsidiary entered into an amendment to the 2019 Credit Agreement, to provide an additional aggregate principal amount of £4.0 million under a credit agreement (the “Revolving Working Capital Loan Facility” or “2020 Credit Agreement”) together with Revolving Credit Facility (the “Revolving Credit Facilities”). At the inception of the Revolving Working Capital Loan Facility, the borrowing bore an interest rate per annum equal to the LIBOR plus the applicable margin of 3.5% per annum. Effective December 31, 2022, borrowings under the Revolving Working Capital Loan Facility bore interest at a rate per annum equal to the SONIA plus the applicable margin of 3.5%.

The Revolving Working Capital Loan Facility matures on January 31, 2025 subject to compliance with financial covenants (the term was extended on October 29, 2023). On March 14, 2024 the maturity was further extended

to April 30, 2025. As of December 31, 2023 and 2022, the Revolving Working Capital Loan Facility had an outstanding principal balance of $6.4 million and $4.8 million, respectively.

As of December 31, 2023, the Company had $11.4 million in outstanding principal balance and less than $0.1 million available for additional borrowings under the Revolving Credit Facilities to the extent the Company’s compliance with financial covenants permits such borrowings.

As of December 31, 2023 and 2022, the UK Subsidiary was in compliance with all affirmative and negative covenants under the 2019 Credit Agreement, including any financial covenants, pertaining to its financing arrangements.

2022 Committed Facility Agreement

In May 2022, the UK Subsidiary entered into a committed facility agreement (the “2022 Committed Facility Agreement”), which includes a term loan for £1.4 million to be used in refinancing a property owned by XBP Europe in Dublin, Ireland (the “Property”). At inception of the 2022 Committed Facility Agreement, the borrowing bore an interest rate equal to 3.5% per annum in addition to the Bank of England Base Rate. The maturity of the 2022 Committed Facility Agreement is May 2027. As of December 31, 2023 and 2022, the 2022 Committed Facility Agreement had an outstanding balance of $1.5 million and $1.6 million, respectively.

The 2022 Committed Facility Agreement contains financial covenants including, but not limited to (a) a Combined Debt Service Coverage Ratio, which measures the cashflow less dividends, net capital expenditure, and taxation relative to the debt service for that relevant period, (b) interest cover, which measures EBITDA relative to the aggregate of (i) interest charges and (ii) interest element of finance leases in any relevant period, (c) Total Net Debt to EBITDA, which measures the total net debt relative to EBITDA for any relevant period, and (d) loan to market value, which measures the loan as a percentage of the aggregate market value of The Property. The term “Combined” refers to the UK subsidiary and its wholly-owned subsidiaries.

As of December 31, 2023 and 2022, the UK Subsidiary was in compliance with all affirmative and negative covenants under the 2022 Committed Facility Agreement, including any financial covenants pertaining to its financing arrangements. The Company continually monitors its compliance with such covenants. The Company believes it will remain in compliance with all such covenants for the next twelve months; however, due to the inherent uncertainty, management’s estimates of the achievement of its financial covenants may change in the future.

Debt Outstanding

As of December 31, 2023, and 2022, the following debt instruments were outstanding:


	December 31,
(dollars in thousands)	2023		2022
Term loan	$	3,785	$	4,489
Revolvers		12,767		10,852
Secured borrowings under Securitization Facility		74		4,075
Total debt		16,626		19,416
Less: Current portion of long-term debt		3,863		4,970
Long-term debt, net of current maturities	$	12,763	$	14,446

As of December 31, 2023, maturities of long-term debt are as follows:


(dollars in thousands)	Maturity
2024	$	3,863
2025		11,605
2026		178
2027		980
Total debt		16,626
Less: Unamortized discount and debt issuance costs		55
Total maturities of long-term debt	$	16,571

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

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+ Details

Intangible Assets and Goodwill - Estimated intangibles amortization expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Estimated Amortization Expenses
2024	$ 734
2025	384
2026	380
Total intangibles, net	$ 1,498	$ 1,529

Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2023

Accounts Receivable

Accounts Receivable


	December 31,
(dollars in thousands)	2023		2022
Billed receivables	$	20,885	$	27,267
Unbilled receivables		11,182		9,639
Less: Allowance for credit losses		(1,272)		(929)
Total accounts receivable, net	$	30,795	$	35,977

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 6,905	$ 7,473
Accounts receivable, net of allowance for credit losses of $1,272 and $929, respectively	30,795	35,977
Inventories, net	4,740	4,526
Prepaid expenses and other current assets	7,427	8,773
Related party note receivable		13,266
Total current assets	49,867	70,015
Property, plant and equipment, net of accumulated depreciation of $42,990 and $44,629, respectively	13,999	14,620
Operating lease right-of-use assets, net	6,865	5,848
Goodwill	22,910	22,062
Intangible assets, net	1,498	1,529
Deferred income tax assets	6,861	7,055
Other noncurrent assets	739	1,712
Total assets	102,739	122,841
Current liabilities
Accounts payable	14,414	16,863
Related party payables	$ 13,350	$ 32,658
Related party payables	Related Party	Related Party
Accrued liabilities	$ 24,742	$ 24,724
Accrued compensation and benefits	16,583	13,401
Customer deposits	536	1,061
Deferred revenue	6,004	5,660
Current portion of finance lease liabilities	638	757
Current portion of operating lease liabilities	1,941	1,796
Current portion of long-term debts	3,863	4,970
Total current liabilities	82,071	101,890
Related party notes payable	1,542	11,164
Long-term debt, net of current maturities	12,763	14,446
Finance lease liabilities, net of current portion	23	658
Pension liabilities	12,208	16,076
Operating lease liabilities, net of current portion	5,065	3,963
Other long-term liabilities	1,635	1,576
Total liabilities	115,307	149,773
Commitments and Contingencies (Note 14)
STOCKHOLDERS' DEFICIT
Common Stock, par value of $0.0001 per share; 160,000,000 shares authorized; 30,166,102 and nil shares issued and outstanding at December 31, 2023 and 2022, respectively	30
Net parent investment		(5,845)
Accumulated deficit	(11,339)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(1,416)	(17,789)
Unrealized pension actuarial gains (losses), net of tax	157	(3,298)
Total accumulated other comprehensive loss	(1,259)	(21,087)
Total stockholders' deficit	(12,568)	(26,932)
Total liabilities and stockholders' deficit	$ 102,739	$ 122,841

Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Common Stock BTC International	Common Stock Cantor	Common Stock	Additional Paid in Capital BTC International	Additional Paid in Capital Cantor	Additional Paid in Capital	Net Parent Investment BTC International	Net Parent Investment Classification Adjustment	Net Parent Investment	Foreign Currency Translation Adjustment Classification Adjustment	Foreign Currency Translation Adjustment	Unrealized Pension Actuarial Losses, net of tax	Accumulated Deficit BTC International	Accumulated Deficit	BTC International	Cantor	Total
Beginning balance, value at Dec. 31, 2021									$ 2,084		$ (18,223)	$ (10,381)					$ (26,530)
Consolidated Statements of Stockholders' Deficit
Net Income (Loss)									(7,929)								(7,929)
Foreign currency translation adjustment											444						444
Net unrealized pension actuarial gains, net of tax												7,083					7,083
Ending balance at Dec. 31, 2022									(5,845)		(17,789)	(3,298)					(26,932)
Consolidated Statements of Stockholders' Deficit
Net Income (Loss)									(13,120)								(13,120)
Issuance of common stock							$ 38,333						$ (13,412)		$ 18,728	$ 6,520
Transaction costs related to the Merger																	(297)
Ending balance at Nov. 29, 2023								$ (19,368)		$ 19,368
Beginning balance, value at Dec. 31, 2022									$ (5,845)		(17,789)	(3,298)					(26,932)
Consolidated Statements of Stockholders' Deficit
Net Income (Loss)																	(11,047)
Issuance of common stock	$ 22	$ 8		$ (6,215)	$ 6,512
Issuance of common stock (in shares)	21,802,689	8,363,413
Transaction costs related to the Merger						$ (297)
Ending balance at Dec. 31, 2023			$ 30								(1,416)	157		$ (11,339)			$ (12,568)
Ending balance (in shares) at Dec. 31, 2023			30,166,102														30,166,102
Beginning balance, value at Nov. 29, 2023								$ (19,368)		$ 19,368
Consolidated Statements of Stockholders' Deficit
Net Income (Loss)														2,073			$ 2,073
Foreign currency translation adjustment											(2,995)						(2,995)
Net unrealized pension actuarial gains, net of tax												3,455					3,455
Ending balance at Dec. 31, 2023			$ 30								$ (1,416)	$ 157		$ (11,339)			$ (12,568)
Ending balance (in shares) at Dec. 31, 2023			30,166,102														30,166,102

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

Reverse Recapitalization (Details) - USD ($) $ in Thousands	11 Months Ended	12 Months Ended
Reverse Recapitalization (Details) - USD ($) $ in Thousands	Nov. 29, 2023	Dec. 31, 2023
Reverse Recapitalization
Proceeds from Business Combination, net of transaction expenses		$ 5,205
Transaction costs related to the Merger	$ (297)
Common stock Outstanding		30,166,102
Warrants		6,634,980
Private Warrants
Reverse Recapitalization
Warrants		385,000
Public Warrants
Reverse Recapitalization
Warrants		6,249,980
CF Acquisition Corp. VIII
Reverse Recapitalization
Proceeds from Business Combination, net of transaction expenses		$ 5,200
Transaction costs		3,300
Transaction costs related to the Merger		300
Additional paid-in capital and remaining expense		$ 3,000

Warrants - Common stock warramts outstanding (Details)	Dec. 31, 2023 $ / shares shares
Stockholders' Deficit
Warrants	6,634,980
Private Placement Warrants
Stockholders' Deficit
Warrants	135,000
Exercise price of warrants \| $ / shares	$ 11.50
Forward Purchase Warrants
Stockholders' Deficit
Warrants	250,000
Exercise price of warrants \| $ / shares	$ 11.50
Public Warrants
Stockholders' Deficit
Warrants	6,249,980
Exercise price of warrants \| $ / shares	$ 11.50

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

12.Income Taxes

The income tax provision consists of the following:


	Years ended December 31,
(In thousands)	2023		2022
Current income taxes
Federal	$	—	$	—
State		—		—
Foreign		1,028		1,653
Total Current	$	1,028	$	1,653

Deferred income taxes
Federal	$	—	$	—
State		—		—
Foreign		(422)		909
Total Deferred	$	(422)	$	909
Total income tax provision	$	606	$	2,562

The following represents the domestic and foreign components of loss before income tax provision:


	Years ended December 31,
(In thousands)	2023		2022
U.S.	$	(3,199)	$	—
Foreign		(7,242)		(5,367)
Total	$	(10,441)	$	(5,367)

At December 31, 2023, gross deferred tax assets totaled approximately $33.1 million while gross deferred tax liabilities totaled approximately $1.7 million. Deferred income taxes reflect the net of temporary differences between the carrying amount of assets and liabilities for financial reporting and income tax purposes. The company has gross US NOLs of $1.6 million and gross foreign NOLs of $98.2 million. Applying jurisdictional tax rates, the total tax-effected US and foreign NOLs are $0.3 million and $24.6 million, respectively. The US NOLs do not expire. The amount of foreign NOLs expiring beginning in 2024 is $9.4 million gross or $2.2 million tax-effected. The remaining foreign NOLs do not expire.

Significant components of our deferred taxes assets (liabilities) are as follows:


	Years ended December 31,
(In thousands)	2023		2022
Deferred income tax assets:
Property, plant, and equipment	$	638	$	228
Defined benefit liability		3,431		4,214
Bad debt reserve		192		163
Inventories		168		160
Accrued liabilities		2,313		2,125
Accrued pension liabilities		716		699
Operating lease liabilities		1,183		258
Net operating loss		24,491		19,711
Total deferred income tax assets	$	33,132	$	27,558

Deferred income tax liabilities:
Operating lease right of use assets	$	(1,141)	$	(280)
Intangible assets		(550)		(777)
Total deferred income tax liabilities	$	(1,691)	$	(1,057)

Valuation allowance		(24,580)		(19,446)
Total net deferred income tax assets	$	6,861	$	7,055

A reconciliation of the significant differences between the federal statutory income tax and the effective income tax on pretax loss is as follows:


	Years ended December 31,
(In thousands)	2023		2022
Tax expense at statutory rate	$	(2,193)	$	(1,128)
Foreign rate difference		(474)		428
Return to provision adjustments		(624)		399
Rate change		(924)		(561)
Change in valuation allowance		4,116		2,296
Permanent differences		(75)		1,129
Unrecognized tax benefits		684		—
Other		96		—
Income tax expense	$	606	$	2,562

The Company believes that based upon the range of data reviewed, no uncertain tax positions have been identified for the years ended December 31, 2023 and 2022.

On August 16, 2022, the Inflation Reduction Act (the IRA) was signed into law in the U.S. Among other changes, the IRA introduced a corporate minimum tax on certain corporations with average adjusted financial statement income over a three-tax year period in excess of $1.0 billion and an excise tax on certain stock repurchases by certain covered corporations for taxable years beginning after December 31, 2022 and several tax incentives to promote clean energy. Based on our current analysis and pending future guidance to be issued by Treasury, we do not believe these provisions will have a material impact on our consolidated financial statements.

The Company adopted the provision of accounting for uncertainty in income taxes in the Topic of the ASC 740. ASC 740 clarifies the accounting for uncertain tax positions in the Company's financial statements and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on tax returns. The total amount of unrecognized tax benefits, exclusive of interest and penalties, is $0.7 million at December 31, 2023. There are no unrecognized tax benefits at December 31, 2022. No interest and penalties have been recognized since the liability can be settled with net operating losses.

Total amounts of unrecognized tax benefits as of December 31, are as follows (in thousands):


	Years ended December 31,
(In thousands)	2023		2022
Unrecognized tax benefits—January 1	$	—	$	—
Gross increases—tax positions in prior period		684		—
Gross decreases—tax positions in prior period		—		—
Gross increases—tax positions in current period		—		—
Settlement		—		—
Lapse of statute of limitations		—		—
Unrecognized tax benefits—December 31	$	684	$	—

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

Employee Benefit Plans - Net periodic benefit cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Net periodic benefit cost
Service cost	$ 37	$ 53
Interest cost	$ 3,050	$ 1,910
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Income (Expense), Nonoperating, Net	Interest Income (Expense), Nonoperating, Net	Interest Income (Expense), Nonoperating, Net
Expected return on plan assets	$ (2,717)	$ (2,856)
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)
Amortization of prior service cost	$ 124	$ 273
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)
Amortization of net loss	$ 1,664	$ 1,768
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)
Net periodic benefit cost	$ 2,158	$ 1,148

Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property, plant and equipment, net
Finance lease right-of use assets, gross	$ 4,380	$ 4,833
Property, plant and equipment including finance lease right-of use assets, gross	56,989	59,249
Less: Accumulated depreciation and amortization	(42,990)	(44,629)
Total property, plant and equipment, net	13,999	14,620
Depreciation expense	3,500	3,700
Buildings and improvements
Property, plant and equipment, net
Property, plant and equipment, gross	$ 9,115	8,788
Buildings and improvements \| Minimum
Property, plant and equipment, net
Expected useful lives	7 years
Buildings and improvements \| Maximum
Property, plant and equipment, net
Expected useful lives	40 years
Leasehold improvements
Property, plant and equipment, net
Property, plant and equipment, gross	$ 709	967
Machinery and equipment
Property, plant and equipment, net
Property, plant and equipment, gross	$ 8,256	6,986
Machinery and equipment \| Minimum
Property, plant and equipment, net
Expected useful lives	5 years
Machinery and equipment \| Maximum
Property, plant and equipment, net
Expected useful lives	15 years
Computer equipment and software
Property, plant and equipment, net
Property, plant and equipment, gross	$ 26,763	29,870
Computer equipment and software \| Minimum
Property, plant and equipment, net
Expected useful lives	3 years
Computer equipment and software \| Maximum
Property, plant and equipment, net
Expected useful lives	8 years
Furniture and Fixtures
Property, plant and equipment, net
Property, plant and equipment, gross	$ 7,766	$ 7,805
Furniture and Fixtures \| Minimum
Property, plant and equipment, net
Expected useful lives	5 years
Furniture and Fixtures \| Maximum
Property, plant and equipment, net
Expected useful lives	15 years

Warrants - Public Warrants and Private Warrants (Details)	12 Months Ended
	Dec. 31, 2023 D $ / shares shares
Public Warrants
Warrants
Exercise price of warrants \| $ / shares	$ 11.50
Fractional shares issued upon exercise of warrants (in shares) \| shares	0
Term of warrants	5 years
Warrants redemption, stock price trigger \| $ / shares	$ 18.00
Warrants redemption price per warrant \| $ / shares	$ 0.01
Warrants redemption, minimum number of days of notice to be given to warrant holders	30
Warrants redemption, threshold trading days	20
Warrants redemption, threshold consecutive trading days	30
Warrants redemption, threshold trading days available before notice is sent to warrant holders	3
Private Warrants
Warrants
Threshold period for not to transfer, assign or sell any of their warrants after the completion of the initial business combination	30 days

Leases - Supplemental consolidated balance sheet information related to leases (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases
Weighted-average remaining lease term - Operating leases	3 years 5 months 19 days	4 years 1 month 28 days
Weighted-average remaining lease term - Finance leases	8 months 15 days	1 year 4 months 17 days
Weighted-average discount rate - Operating leases	13.50%	8.50%
Weighted-average discount rate - Finance leases	6.90%	8.00%
Interest on financing lease liabilities	$ 0.1
Amortization expense on finance lease ROU assets	$ 0.1	$ 0.2

Reverse Recapitalization

12 Months Ended

Dec. 31, 2023

Reverse Recapitalization

Reverse Recapitalization

2.Reverse Recapitalization

As discussed in Note 1, on November 29, 2023, the Company consummated a business combination pursuant to the Merger Agreement. The Business Combination was accounted for as a Reverse Recapitalization, rather than a business combination, for financial accounting and reporting purposes. Accordingly, XBP Europe was deemed the accounting acquirer (and legal acquiree) and CF VIII was treated as the accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of XBP Europe issuing stock for the net assets of CF VIII, accompanied by a recapitalization. XBP Europe has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

●

XBP Europe pre-combination stockholder has the majority of the voting power in the post-Business Combination company;

●

XBP Europe’s stockholder has the ability to appoint a majority of the Company’s board of directors;

●

XBP Europe’s management team is the management team of the post-Business Combination company;

●

XBP Europe’s prior operations is comprised of the ongoing operations of the post-Business Combination company;

●

XBP Europe is the larger entity based on historical revenues and business operations; and

●

The post-Business Combination company has assumed XBP Europe’s operating name.

The net assets of CF VIII are stated at historical cost, with no incremental goodwill or other intangible assets recorded for the effects of the Business Combination. The consolidated assets, liabilities, and results of operations prior to the Business Combination are those of XBP Europe. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated.

Upon closing of the Business Combination, the Company received net proceeds of $5.2 million from the Business Combination.

Transaction costs consist of directors and officers liability insurance cost, legal and professional fees, and other fees relating to the consummation of the Business Combination. The Company incurred $3.3 million in transaction costs relating to the Merger for the year ended December 31, 2023, $0.3 million of which was recorded to additional paid-in capital and the remaining $3.0 million was expensed.

Immediately after giving effect to the Business Combination, there were 30,166,102 shares of Common Stock outstanding, 6,249,980 Public Warrants outstanding and 385,000 Private Warrants outstanding. See Note 16 – Warrants and Note 17 – Stockholders’ Deficit for more details.

Basis of Presentation and Summary of Significant Accounting Policies - Disaggregation of Revenues (Details) - Non-related party - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue
Total Revenue, net	$ 166,336	$ 180,349
France
Disaggregation of Revenue
Total Revenue, net	57,746	66,054
Germany
Disaggregation of Revenue
Total Revenue, net	45,093	55,668
United Kingdom
Disaggregation of Revenue
Total Revenue, net	35,579	32,061
Sweden
Disaggregation of Revenue
Total Revenue, net	17,575	17,640
Other
Disaggregation of Revenue
Total Revenue, net	$ 10,343	$ 8,926

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

+ Details

Basis of Presentation and Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Research and development costs	$ 0.9	$ 1.1

Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2023

Intangible Assets and Goodwill

Schedule of intangible assets


	Weighted
	Average	December 31, 2023
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
	(in Years)	Amount (a)		Amortization		net
Customer relationships	3.0	$	3,145	$	(1,997)	$	1,148
Outsource contract costs	1.0		768		(418)		350
Total intangibles, net		$	3,913	$	(2,415)	$	1,498


	Weighted
	Average	December 31, 2022
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
	(in Years)	Amount (a)		Amortization		net
Customer relationships	5.0	$	3,049	$	(1,564)	$	1,485
Outsource contract costs	1.5		449		(405)		44
Total intangibles, net		$	3,498	$	(1,969)	$	1,529

(a)	Amounts include intangibles acquired in business combinations and asset acquisitions

Schedule of estimated intangibles amortization expense


	Estimated
	Amortization
(dollars in thousands)	Expenses
2024	$	734
2025		384
2026		380
	$	1,498

Schedule of goodwill by reporting segment


	Balances at								Currency		Balances at
	January 1,								Translation		December 31,
(dollars in thousands)	2023		Additions		Disposals		Impairments		Adjustments		2023
Bills and Payments	$	9,689	$	—	$	—	$	—	$	369	$	10,058
Technology		12,373		—		—		—		479		12,852
Total	$	22,062	$	—	$	—	$	—	$	848	$	22,910


	Balances at								Currency		Balances at
	January 1,								Translation		December 31,
(dollars in thousands)	2022		Additions		Disposals		Impairments		Adjustments		2022
Bills and Payments	$	10,447	$	—	$	—	$	—	$	(758)	$	9,689
Technology		13,505		—		—		—		(1,132)		12,373
Total	$	23,952	$	—	$	—	$	—	$	(1,890)	$	22,062

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
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+ Details

Related Parties

12 Months Ended

Dec. 31, 2023

Related Parties

Related Parties

20.Related Parties

The components of “Related party expense” in the consolidated statements of operations are summarized as follows:


	Years ended December 31,
(dollars in thousands)	2023		2022
Related party shared services	$	3,515	$	4,051
Related party royalty		631		631
Related party service fee		537		3,627
Total related party expense	$	4,683	$	8,309

Historically, the Company has been managed and operated in the ordinary course of business with other affiliates of ETI. Accordingly, certain shared costs have been allocated to the Company and reflected as expenses in the consolidated financial statements.

Sales of Products and Services

During the historical periods presented, the Company sold products and services to non-XBP Europe subsidiaries of ETI. Revenue, net in the consolidated statements of operations include sales to affiliates of ETI of $0.2 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively.

Purchases

During the historical periods presented, the Company purchased high-speed scanners and related products from non-XBP Europe subsidiaries of ETI. These purchases totaled $1.0 million and $5.3 million for the years ended December 31, 2023 and 2022, respectively.

Shared Service Center Costs

The historical costs and expenses reflected in our financial statements include costs for certain shared service functions historically provided by the non-XBP Europe subsidiaries of the Company’s parent, ETI, including, but not limited to accounting and finance, IT and business process operations. Where possible, these charges were allocated based on full-time equivalents (FTE’s), formal agreements between XBP Europe and subsidiaries of ETI, or other allocation methodologies that Management determined to be a reasonable reflection of the utilization of services provided or the benefit received by XBP Europe and all costs of operating XBP Europe during the periods presented.

The allocated shared service expenses and general corporate expenses for the years ended December 31, 2023 and 2022 were $3.5 million and $4.1 million, respectively, and are included in the related party expenses in the consolidated statements of operations.

In the opinion of management of ETI and the Company, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during 2023 and 2022. The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors. Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Company operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities. In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein.

Royalty Expenses

During the historical periods presented, subsidiaries of the Company’s parent, ETI, charged royalty fees for allowing the Company to use tradenames and trademarks owned by subsidiaries of ETI. The Company incurred royalty expense of $0.6 million for both the years ended December 31, 2023 and 2022, included in related party expense within the consolidated statements of operations.

Service Fee

During the historical periods presented, subsidiaries of ETI provided management services to the Company in exchange for a management fee. These management services included provision of legal, human resources, corporate finance, and marketing support. The management fee was calculated based on a weighted average of total external revenue, headcount and total assets attributable to the Company. On October 9, 2022 the management fee was terminated when the Merger Agreement was entered into and was replaced by the related party service fee pursuant to the Services Agreement, which reduced the fee and modified the services provided. Services provided under Annex A of the Services Agreement include sales of certain hardware, operations delivery, finance, accounting, human resource and technology support services. The Company incurred total fees of $0.5 million and $3.6 million for the years ended December 31, 2023 and 2022, respectively.

Note Receivable

The Company entered into an Intercompany Loan Agreement with an affiliate of ETI on January 1, 2016, where the Company agreed to lend up to €20 million to the affiliate. The related party note receivable had a six year term with the option to extend for an additional one year term and bore annual interest of 9.5%, due at the end of the term. On January 1, 2023, the Company amended its Intercompany Loan Agreement, extending the maturity of the Intercompany Loan Agreement to December 31, 2023. In accordance with the Ultimate Parent Support Agreement, related party note receivable was eliminated at Closing against related party payables with a residual amount recorded to additional paid-in capital. The consolidated balance sheets included $0 and $13.3 million for the related party note receivable as of December 31, 2023 and 2022, respectively. The consolidated statements of operations included $0 and $1.3 million of related party interest income for the years ended December 31, 2023 and 2022, respectively.

Notes Payable

The Company entered into three Intercompany Loan Agreements with an affiliate of ETI, in September 2009 and May 2010, whereby the affiliate of ETI agreed to lend up to £9.3 million to the Company (“related party notes payable”). The related party notes payable which were denominated in Great British pounds accrued interest daily at the one-month LIBOR rate for United States dollar deposits in the London interbank market plus four percentage points. These notes had an original maturity date of one year (which was extended by the lender for one additional year on each anniversary of the notes) and were assigned by the lender to another affiliate of ETI and amended with an effective date of December 1, 2012. The amendment amended (a) the interest rate to a fixed rate of 4% plus LIBOR for the remainder of 2012, 12% for 2013 and 13.5% thereafter, (b) extended the term of the agreement to December 31, 2024, and (c) denominated the notes in United States dollars. In accordance with the Ultimate Parent Support Agreement, related party notes payable were eliminated at closing with a corresponding impact to additional paid-in capital. As a result, the consolidated balance sheets included $0 and $11.2 million for the related party notes payable as of December 31, 2023 and 2022, respectively. The consolidated statements of operations included related party interest expense of $1.4 million and $1.5 million for the years ended December 31, 2023 and 2022, respectively, in the related party interest expense, net.

Further, the Company entered into another four Intercompany Loan Agreements (“new related party notes payable”) with affiliates of ETI, three of the notes are dated September 4, 2023 (and subsequently amended on September 15, 2023) and one note is dated September 15, 2023. The new related party notes payable have a ten year term and bear annual interest of 6.0%, due at the end of the term. The consolidated balance sheets included $1.5 million new related party notes payable as of December 31, 2023. The consolidated statements of operations included less than $0.1 million, of related party interest expense for the year ended December 31, 2023 in the related party interest expense, net.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stockholders' Deficit - Narratives (Details)	12 Months Ended
Stockholders' Deficit - Narratives (Details)	Dec. 31, 2023 Vote $ / shares shares	Dec. 31, 2022 $ / shares shares
Stockholders' Deficit
Preferred stock Authorized	10,000,000	10,000,000
Preferred stock par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Preferred Stock, Shares Issued	0	0
Preferred stock Outstanding	0	0
Common stock Authorized	160,000,000	160,000,000
Number of vote per share \| Vote	1
Common stock par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Common stock Issued	30,166,102
Common stock Outstanding	30,166,102
Common Stock
Stockholders' Deficit
Common stock Outstanding	30,166,102

Restructuring (Tables)

12 Months Ended

Dec. 31, 2023

Restructuring

Schedule of restructuring activity and balance of restructuring liability


	December 31,
(dollars in thousands)	2023		2022
Balance at January 1	$	2,036	$	4,237
Restructuring charges		4,484		267
Payment of benefits		(1,066)		(2,468)
Balance at December 31,	$	5,454	$	2,036

Debt - Maturities of long-term debt (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Maturities of long-term debt
2024	$ 3,863
2025	11,605
2026	178
2027	980
Total debt	16,626	$ 19,416
Less: Unamortized discount and debt issuance costs	55
Total maturities of long-term debt	$ 16,571

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Other Income, Net (Restated) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Other Income, Net (Restated)
Pension (income) expense, net	$ (929)	$ (804)
Total other (income) expense, net	$ (929)	$ (804)

Employee Benefit Plans - Estimated Future Benefit Payments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Estimated future pension benefit payments
2024	$ 2,161
2025	2,781
2026	2,800
2027	3,122
2028	3,537
2029-2033	18,062
Total	$ 32,463

Stockholders' Deficit

12 Months Ended

Dec. 31, 2023

Stockholders' Deficit

Stockholders' Deficit

17.Stockholders’ Deficit

Preferred Stock — The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share. As of December 31, 2023, there were no shares of preferred stock issued or outstanding.

Common Stock — The Company is authorized to issue 160,000,000 shares of Common stock with a par value of $0.0001 per share. Each holder of Common Stock will be entitled to one (1) vote in person or by proxy for each share

of the Common Stock. The holders of shares of Common Stock will not have cumulative voting rights. As of December 31, 2023, there were 30,166,102 shares of Common stock issued and outstanding, respectively.

- Definition

The entire disclosure for equity.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Income Taxes - Components of loss before income tax provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
U.S.	$ (3,199)
Foreign	(7,242)	$ (5,367)
Net loss before income taxes	$ (10,441)	$ (5,367)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

3.Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Throughout the period covered till the Closing date of the Business Combination, the Company operated as part of ETI. Consequently, stand-alone financial statements have not historically been prepared for the Company. The accompanying consolidated financial statements have been prepared from ETI’s historical accounting records and are presented on a stand-alone basis as if the Company’s operations had been conducted independently from ETI. The consolidated financial statements and related notes to the consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

The consolidated statements of operations include all revenues and costs directly attributable to XBP Europe, including costs for facilities, functions and services used by XBP Europe. Costs for certain functions and services such as accounting, finance and IT delivered by subsidiaries of ETI are directly charged to XBP Europe based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount, usage or other allocation methods. Current and deferred income taxes have been determined based on the stand-alone results of XBP Europe. However, because the Company filed as part of ETI’s tax group in certain jurisdictions, the Company’s actual tax balances may differ from those reported. The Company’s portion of its domestic and certain income taxes for jurisdictions outside the United States are deemed to have been settled in the period the related tax expense was recorded.

All intercompany transactions and balances within the Company have been eliminated. The consolidated financial statements of the Company include assets and liabilities that have been determined to be specifically

identifiable or otherwise attributable to the Company. Transactions with affiliated companies owned by ETI or its subsidiaries which are not a part of the Company are reflected as related party transactions.

All of the allocations and estimates in the consolidated financial statements are based on assumptions that management of ETI believes are reasonable. However, the consolidated financial statements included herein may not be indicative of the financial position, results of operations, and cash flows of the Company in the future or if the Company had been a separate, stand-alone entity during the periods presented.

Actual costs that would have been incurred if XBP Europe had been a stand-alone Company would depend on multiple factors, including organizational structure and strategic decisions.

Certain comparative amounts for prior year have been reclassified to conform to the financial statement presentation as of and for the year ended December 31, 2023.

Use of Estimates in Preparation of the Consolidated Financial Statements

Estimates and judgments relied upon in preparing these consolidated financial statements include revenue recognition for multiple element arrangements, allowance for credited losses, inventory obsolescence costs, income taxes, depreciation, amortization, employee benefits, contingencies, goodwill, intangible assets, right of use assets and obligation, pension obligations, pension assets, and asset and liability valuations. The Company regularly assesses these estimates and records changes in estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Segment Reporting

The Company consists of two segments:

The Bills & Payments business unit primarily focuses on optimizing how bills and payments are processed by businesses of all sizes and industries. It offers automation of AP and AR processes and through its platform, XBP, seeks to integrate buyers and suppliers across Europe. This business unit also includes our digital transformation revenue, which is both project based and recurring.

The Technology business unit primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services.

Cash and Cash Equivalents

Cash and cash equivalents include cash deposited with financial institutions and liquid investments with original maturity dates equal to or less than three months. All bank deposits and money market accounts are considered cash and cash equivalents.

Accounts Receivable and Allowance for Expected Credit Losses

Accounts receivable are carried at the original invoice amount less an estimate made for credit losses. Revenue that has been earned but remains unbilled at the end of the period is recorded as a component of accounts receivable, net. The Company specifically analyzes accounts receivable mainly based on customer type and related aging schedules, historical collection experience, current and future economic and market condition to estimate the probability of default in the future when evaluating the adequacy of its allowance for expected credit losses. The Company writes off accounts receivable balances against the allowance for expected credit losses, net of any amounts recorded in deferred revenue, when it becomes probable that the receivable will not be collected.

Inventories

Inventories primarily include heavy-duty scanners and related parts, toner, paper stock, envelopes and postage supplies. Inventories are stated at the lower of cost or net realizable values and include the cost of raw materials, labor, and purchased subassemblies. Cost is determined using the weighted average method.

Property, Plant and Equipment

Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method (which approximates the use of the assets) over the estimated useful lives of the assets. When these assets are sold or otherwise disposed of, the asset and related depreciation is relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Leasehold improvements are amortized over the lease term or the useful life of the asset, whichever is shorter. Repair and maintenance costs are expensed as incurred.

Intangible Assets

Customer Relationships

Customer relationship intangible assets represent customer contracts and relationships obtained as part of acquired businesses. Customer relationship values are estimated by evaluating various factors including historical attrition rates, contractual provisions and customer growth rates, among others. The estimated average useful lives of customer relationships range from 4 to 16 years depending on facts and circumstances. These intangible assets are primarily amortized straight-line over the estimated useful life. The Company evaluates the remaining useful life of intangible assets on an annual basis to determine whether events and circumstances warrant a revision to the remaining useful life.

Developed Technology

The Company has acquired various developed technologies embedded in its technology platform. Developed technology is an integral asset to the Company in providing solutions to customers and is recorded as an intangible asset. The Company amortizes developed technology on a straight-line basis over the estimated useful life, which is typically 5 to 8.5 years.

Capitalized Software Costs

The Company capitalizes certain costs incurred to develop software products to be sold, leased or otherwise marketed after establishing technological feasibility in accordance with ASC section 985-20, Software — Costs of Software to Be Sold, Leased, or Marketed, and the Company capitalizes costs to develop or purchase internal-use software in accordance with ASC section 350-40, Intangibles — Goodwill and Other — Internal-Use Software. Significant estimates and assumptions include determining the appropriate period over which to amortize the capitalized costs based on estimated useful lives and estimating the marketability of the commercial software products and related future revenues. The Company amortizes capitalized software costs on a straight-line basis over the estimated useful life, which is typically 5 years.

Outsourced Contract Costs

Costs of outsourcing contracts, including costs incurred for bid and proposal activities, are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract are deferred and expensed on a straight-line basis over the estimated contract term, which is typically 3 to 5 years. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment activities and can be separated into two principal categories: contract commissions and set-up/fulfillment costs. Contract fulfillment costs are capitalized only if they are directly attributable to a specifically anticipated future contract;

represent the enhancement of resources that will be used in satisfying a future performance obligation (the services under the anticipated contract); and are expected to be recovered.

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets, including finite-lived trade names, trademarks, customer relationships, developed technology, capitalized software costs, outsourced contract costs, acquired software, workforce, and property, plant and equipment, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such assets, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows based in part on the financial results and the expectation of future performance.

The Company did not record any impairment related to its property, plant, and equipment, customer relationships, developed technology, capitalized software cost or outsourced contract costs for the years ended December 31, 2023 and 2022.

Goodwill

Goodwill represents the excess purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations. Goodwill is generally allocated to reporting units based upon relative fair value (taking into consideration other factors such as synergies) when an acquired business is integrated into multiple reporting units. The Company’ reporting units are at the operating segment level, for which discrete financial information is prepared and regularly reviewed by management. When a business within a reporting unit is disposed of, goodwill is allocated to the disposed business using the relative fair value method.

The Company conducts its annual goodwill impairment tests on October 1^st of each year, or more frequently if indicators of impairment exist. When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would be required to perform a quantitative impairment analysis for goodwill. The quantitative analysis requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company uses a combination of the Guideline Public Company Method of the Market Approach and the Discounted Cash Flow Method of the Income Approach to determine the reporting unit fair value. Refer to Note 9- Intangible Assets and Goodwill for additional discussion of goodwill.

Benefit Plan Accruals

The Company has defined benefit plans in the UK, Germany, Norway and France under which participants earn a retirement benefit based upon a formula set forth in the respective plans. The Company records annual amounts relating to its pension plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, and compensation increases. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so.

Leases

The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the consolidated balance sheet. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and finance lease liabilities, net of current portion in the consolidated balance sheet.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date and exclude lease incentives. As most of the Company’ leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The implicit rate in the lease is used when readily determinable. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are not recorded on the balance sheet.

Finance lease ROU assets are amortized over the lease term or the useful life of the asset, whichever is shorter. The amortization of finance lease ROU assets is recorded in depreciation expense in the consolidated statements of operations. For operating leases, expense is recognized for lease payments on a straight-line basis over the lease term.

Warrants

The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to Company’s own shares of common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

We determined upon further review of the warrant agreements, that while Public Warrants meet the definition of a derivative, they meet the equity scope exception in ASC 815 to be classified in stockholders’ deficit and are not subject to remeasurement provided that the warrants continue to meet the criteria for equity classification.

Similarly, Private Warrants meet the definition of a derivative, however they don’t meet the equity scope exception in ASC 815 and are subject to remeasurement. Private Warrant liability shall be measured at fair value on transaction closing date, with changes in fair value each period recognized in the consolidated statements of operations.

Revenue Recognition

The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Revenue is measured as the amount of consideration that is expected to receive in exchange for transferring goods or providing services. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of the Company’s material sources of revenue are derived from contracts with customers, primarily relating to the provision of business and transaction processing services and sales of recurring software licenses and professional services within each of the Company segments. The Company does not have any significant extended payment terms, as payment for invoices issued is received shortly after goods are delivered or services are provided.

Nature of Services

The primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. The Company’s promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the

customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. The variable fees are allocated to the single performance obligation charged to the distinct service period in which the Company performs the service.

Revenue from the sale of recurring software licenses is recognized ratably over the contractual term, unless perpetual licenses are granted or a noncancelable license is granted for a nonrefundable fee, which are recognized at a point in time. Professional services revenue consists of implementation services for new customers, or implementations of new products for existing customers. Professional services are typically sold on a time-and-materials basis and billed monthly based on actual hours incurred.

Revenue from the sale of hardware solutions is recognized on a point in time basis and related maintenance are recognized ratably over the contractual term.

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region for the years ended December 31, 2023 and 2022:


	Year ended December 31,
(dollars in thousands)	2023		2022
France	$	57,746	$	66,054
Germany		45,093		55,668
United Kingdom		35,579		32,061
Sweden		17,575		17,640
Other		10,343		8,926
Total Revenue, net	$	166,336	$	180,349

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at December 31, 2023 and 2022:


	December 31,		December 31,		January 1,
(dollars in thousands)	2023		2022		2022
Accounts receivable, net	$	30,795	$	35,977	$	35,109
Deferred revenues		6,004		5,660		5,760
Customer deposits		536		1,061		2,147
Costs to obtain and fulfill a contract		350		44		60

Accounts receivable, net includes $11.2 million and $9.6 million as of December 31, 2023 and 2022, respectively, representing amounts not billed to customers. Unbilled receivables are accrued and represent work performed in accordance with the terms of contracts with customers.

Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where the Company received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. The Company recognized revenue of $6.3 million during the year ended December 31, 2023 that had been deferred as of December 31, 2022.

Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC

340-40-25-4, the incremental costs of obtaining contracts are recognized as an expense when incurred if the amortization period would have been one year or less. These costs are included in selling, general and administrative expenses. The effect of applying this practical expedient was not material.

Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed.

Performance Obligations

At the inception of each contract, the Company assesses the goods and services promised in the Company’s contracts and identifies each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes.

Certain of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company estimates the expected costs of satisfying a performance obligation and adds an appropriate margin for that distinct good or service. The adjusted market approach is also used whereby the Company estimates the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, the Company considers the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained.

When evaluating the transaction price, the Company analyzes, on a contract-by-contract basis, all applicable variable considerations. The nature of our contracts gives rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. These amounts are estimated based on the expected amount to be provided to customers and reduce revenues recognized. The Company does not anticipate significant changes to our estimates of variable consideration.

Reimbursements from customers, such as postage costs, are included in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under ASC 606, the Company did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of the Company’s contracts. The Company has certain non-cancellable contracts where a fixed monthly fee is received in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of December 31, 2023 in each of the future periods below:


(dollars in thousands)
2024	$	5,822
2025		53
2026		32
2027 and thereafter		97
Total	$	6,004

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2023 and 2022 were $0.2 million and $0.3 million, respectively.

Research and Development

Research and development costs are expensed as incurred. Research and development expenses for the years ended December 31, 2023 and 2022 were $0.9 million and $1.1 million, respectively.

Restructuring Charges

Costs and liabilities associated with management-approved restructuring activities are recognized when they are incurred. One-time employee termination costs are recognized at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Ongoing employee termination benefits are recognized as a liability when it is probable that a liability exists and the amount is reasonably estimable. Restructuring charges are recognized as an operating expense within the consolidated statements of operations and related liabilities are recorded within accrued compensation and benefits on the consolidated balance sheets. The Company periodically evaluates and, if necessary, adjusts its estimates based on currently available information.

The liability for the restructuring charge associated with an exit or disposal activity is measured initially at its fair value. Restructuring charges for the years ended December 31, 2023 and 2022 were $4.5 million and $0.3 million, respectively.

Income Taxes

The Company accounts for income taxes by using the asset and liability method. The Company accounts for income taxes regarding uncertain tax positions and recognized interest and penalties related to uncertain tax positions in income tax expense in the consolidated statements of operations.

Deferred income taxes are recognized on the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as determined under tax laws and rates. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized. The Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets are more likely than not to be realized. However, scheduling the reversal of existing deferred tax liabilities indicated that a portion of the deferred tax assets are likely to be realized. Therefore, partial valuation allowances were established against a portion of the Company’ deferred tax assets. In the event the Company determines that it would be able to realize deferred tax assets that have valuation allowances established, an adjustment to the net deferred tax assets would be recognized as a component of income tax expense through continuing operations.

The Company engages in transactions (i.e. acquisitions) in which the tax consequences may be subject to uncertainty and examination by the varying taxing authorities. Therefore, judgment is required by the Company in assessing and estimating the tax consequences of these transactions. While the Company’s tax returns are prepared and based on the Company’ interpretation of tax laws and regulations, in the normal course of business the tax returns are subject to examination by the various taxing authorities. Such examinations may result in future assessments of additional tax, interest and penalties. For purposes of the Company’s income tax provision, a tax benefit is not recognized if the tax position is not more likely than not to be sustained based solely on its technical merits. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. Refer to Note 12 — Income Taxes for further information.

Loss Contingencies

The Company reviews the status of each significant matter, if any, and assesses its potential financial exposure considering all available information including, but not limited to, the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events pertaining to a particular matter. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to loss contingencies, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to its pending claims and litigation and may revise its estimates. These revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial position of the Company. Our liabilities exclude any estimates for legal costs not yet incurred associated with handling these matters.

Foreign Currency Translation

The Company has determined all international subsidiaries’ functional currency is the local currency. These assets and liabilities are translated at exchange rates in effect at the balance sheet date while income and expense amounts are translated at average exchange rates during the period. The resulting foreign currency translation adjustments are disclosed as a separate component of other comprehensive loss.

Included as foreign exchange losses, net in the consolidated statements of operations are net exchange loss of $0.6 million and $1.2 million for the years ended December 31, 2023 and 2022, respectively.

Net Loss per Share

Earnings per share (“EPS”) is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method and if-converted method in the period of earnings. The two-class method is an earnings allocation method that determines earnings per share (when there are earnings) for common stock and participating securities. The if-converted method assumes all convertible securities are converted into common stock. Diluted EPS excludes all dilutive potential shares of common stock if their effect is anti-dilutive.

As the Company experienced net losses for the periods presented, the Company did not include the effect of 6,634,980 shares of Common Stock issuable upon exercise of 6,634,980 warrants sold in the IPO and Private Placement and issued in connection with completion of the Business Combination, in the calculation of diluted loss per share for the years ended December 31, 2023 and 2022, because their effects were anti-dilutive.

The components of basic and diluted EPS are as follows:


	Year Ended December 31,
	2023		2022
Net loss attributable to common stockholders (A)	$	(11,047)	$	(7,929)
Weighted average common shares outstanding – basic and diluted (B)		22,535,920		21,802,689
Loss Per Share:
Basic and diluted (A/B)	$	(0.49)	$	(0.36)

Fair Value Measurements

The Company records the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous

market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Refer to Note 13 — Employee Benefit Plans and Note 15 — Fair Value Measurement for further discussion.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and trade receivables. The Company maintains its cash and cash equivalents and certain other financial instruments with highly rated financial institutions and limits the amount of credit exposure with any one financial institution. From time to time, the Company assesses the credit worthiness of its customers. Credit risk on trade receivables is minimized because of the large number of entities comprising our client base and their dispersion across many industries and geographic areas. The Company generally has not experienced any material losses related to receivables from any individual customer or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in our accounts receivable, net. The Company does not have any significant customers that account for 10% or more of the total combined revenues.

Recently Adopted Accounting Pronouncements

Effective January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) no. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company is required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. This ASU along with related additional clarificatory guidance in the ASU No. 2019-05, “Financial Instruments — Credit Losses (Topic 326)” and ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments — Credit Losses”, was also adopted. Adoption of the standard was applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance, primarily cash and cash equivalents, restricted cash and accounts receivable, based on class of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. For accounts receivable, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding, historical collection experience, current and future economic and market conditions. There was no impact to the Company’s opening retained earnings or its consolidated balance sheet upon adoption and as a result, the balances presented for December 31, 2022, which were derived under the incurred loss model, are comparable to December 31, 2023.

The following table describes the changes in the allowance for expected credit losses for the year ended December 31, 2023 (all related to accounts receivables):


(dollars in thousands)
Balance at January 1, 2023 of the allowance for expected credit losses	$	929
Change in the provision for expected credit losses for the period		343
Balance at December 31, 2023 of the allowance for expected credit losses	$	1,272

In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose the key terms of supplier finance programs, the amount of obligations outstanding at the end of the reporting period that the entity has confirmed as valid to the finance provider, where these obligations are recorded in the balance sheet, and a roll forward of the obligations. The new standard is effective for fiscal years beginning after December 15, 2022, on a retrospective basis, including interim periods within those fiscal years. Effective January 1, 2023, the Company adopted this standard. The adoption of this standard did not have a material impact on the consolidated financial statements.

Effective January 1, 2023, the Company adopted ASU no. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. While primarily related to contract assets and contract liabilities that were accounted for by the acquiree in accordance with ASC 606, the amendments also apply to contract assets and contract liabilities from other contracts to which the provisions of Topic 606 apply, such as contract liabilities from the sale of nonfinancial assets within the scope of Subtopic 610-20. The ASU was applied prospectively. The adoption had no material impact on the Company’s consolidated results of operations, cash flows, financial position or disclosures.

Recently Issued Accounting Pronouncements

In March 2023, FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements. The FASB-issued guidance clarifies the accounting for leasehold improvements associated with common control leases by requiring that leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term), as long as the lessee controls the use of the underlying asset through a lease. Additionally, leasehold improvements associated with common control leases should be accounted for as a transfer between entities under common control through an adjustment to equity, if, and when, the lessee no longer controls the use of the underlying asset. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements-Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which modifies the disclosure and presentation requirements of a variety of US GAAP codification topics by aligning them with the SEC Regulation S-X or S-K, which are rules about the form and content of financial reports. The provisions of this ASU are contingent upon when the SEC removes the related disclosure provisions from Regulation S-X and S-K. This guidance is effective for the Company no later than June 30, 2027 and is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis. Additionally, it requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”). This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that adopting this standard will have on its consolidated financial statements.

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current income taxes
Foreign	$ 1,028	$ 1,653
Total Current	1,028	1,653
Deferred income taxes
Foreign	(422)	909
Total Deferred	(422)	909
Income tax expense	$ 606	$ 2,562

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2023

Employee Benefit Plans

Schedule of change in benefit obligations, change in fair value of plan assets and funded status of pension plans (except for the German pension plan which is unfunded) and amounts recognized in our consolidated financial statements


	Year Ended December 31,
(dollars in thousands)	2023		2022
Change in Benefit Obligation:
Benefit obligation at beginning of period	$	61,770	$	117,582
Service cost		37		53
Interest cost		3,050		1,910
Actuarial gain		(1,019)		(44,748)
Plan curtailment		—		149
Benefits paid		(2,577)		(1,915)
Foreign-exchange rate changes		3,028		(11,261)
Benefit obligation at end of year	$	64,289	$	61,770

Change in Plan Assets:
Fair value of plan assets at beginning of period	$	45,694	$	90,225
Actual (loss) return on plan assets		3,559		(36,818)
Employer contributions		2,993		2,862
Benefits paid		(2,473)		(1,818)
Foreign-exchange rate changes		2,308		(8,757)
Fair value of plan assets at end of year		52,081		45,694
Funded status at end of year	$	(12,208)	$	(16,076)

Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net^(a)	$	(12,208)	$	(16,076)
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial gain		(3,331)		(6,959)
Net prior service costs		(124)		(124)
Net amount recognized in accumulated comprehensive loss, net of tax	$	(3,455)	$	(7,083)

Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	$	64,289	$	61,770
Aggregate accumulated benefit obligation	$	64,289	$	61,770
Aggregate fair value of plan assets	$	52,081	$	45,694

(a)

Combined balance of $12.2 million as of December 31, 2023 includes pension liabilities (assets) of $10.1 million, $1.6 million, $1.5 million and ($1.0) million under UK, Asterion, German and Norway pension plans, respectively. Combined balance of $16.1 million as of December 31, 2022 includes pension liabilities of $13.7 million, $1.7 million, $1.2 million and $(0.5) million under UK, Asterion, German and Norway pension plans, respectively.

Schedule of components of net periodic benefit cost


	Year ended December 31,
(dollars in thousands)	2023		2022
Service cost	$	37	$	53
Interest cost		3,050		1,910
Expected return on plan assets		(2,717)		(2,856)
Amortization
Amortization of prior service cost		124		273
Amortization of net loss		1,664		1,768
Net periodic benefit cost	$	2,158	$	1,148

Schedule of principal actuarial assumptions used to determine benefit obligation and net periodic benefit costs


	December 31,
	2023		2022		2023		2022		2023		2022		2023		2022

(dollars in thousands)	UK				Germany				Norway				Asterion
Weighted-average assumptions used to determine benefit obligations:
Discount rate	4.80	%	5.00	%	3.16	%	3.80	%	3.10	%	3.00	%	3.16	%	3.80	%
Rate of compensation increase	N/A		N/A		N/A		N/A		3.50	%	3.50	%	N/A		N/A
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	5.00	%	1.80	%	3.16	%	3.80	%	3.00	%	3.00	%	3.16	%	3.80	%
Expected asset return	5.87	%	3.45	%	N/A		N/A		4.45	%	4.15	%	3.16	%	3.80	%
Rate of compensation increase	N/A		N/A		N/A		N/A		3.50	%	3.50	%	N/A		N/A

Schedule of weighted average allocation of plan assets by asset category


	Year Ended December 31,
	2023		2022
U.K. and other international equities	27.3	%	27.1	%
U.K. government and corporate bonds	5.1		5.5
Diversified growth fund	15.1		18.4
Liability driven investments	50.9		44.3
Multi-asset credit fund	1.6		4.7
Total	100.0	%	100.0	%

Schedule of fair value of pension assets


	December 31, 2023
(dollars in thousands)	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	941	$	941	$	—	$	—
Equity funds:
U.K.		13,297		—		13,297		—
Fixed income securities:
Corporate bonds/U.K. Gilts		2,671		—		2,671		—
Other investments:
Diversified growth fund		7,846		—		7,846		—
Liability driven investments		26,488		—		26,488		—
Multi-asset credit fund		838		—		838		—
Total fair value	$	52,081	$	941	$	51,140	$	—


	December 31, 2022
(dollars in thousands)	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	932	$	932	$	—	$	—
Equity funds:
U.K.		11,400		—		11,400		—
Fixed income securities:
Corporate bonds/U.K. Gilts		2,529		—		2,529		—
Other investments:
Diversified growth fund		8,417		—		8,417		—
Liability driven investments		20,258		—		20,258		—
Multi-asset credit fund		2,158		—		2,158		—
Total fair value	$	45,694	$	932	$	44,762	$	—

Schedule of estimated future pension benefit payments


	Estimated
	Benefit
(dollars in thousands)	Payments
Year ended December 31,
2024	$	2,161
2025		2,781
2026		2,800
2027		3,122
2028		3,537
2029 – 2033		18,062
Total	$	32,463

Fair Value Measurement - Schedule of Beginning And Ending Balances of Net Assets And Liabilities (Details) - Private Warrants $ in Thousands	1 Months Ended
	Dec. 31, 2023 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at of November 29, 2023	$ 647
Reduction in the fair value of the private warrants liability	$ (597)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Fair Value Adjustment of Warrants
Balance at of December 31, 2023	$ 50

Basis of Presentation and Summary of Significant Accounting Policies - Advertising (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Advertising costs	$ 0.2	$ 0.3

Segment Information (Tables)

12 Months Ended

Dec. 31, 2023

Segment Information

Reconciliation of segment profit to net loss before income taxes


	Year ended December 31, 2023
	Bills & Payments		Technology		Total
Revenue, net (including related party revenue of $0.2 million)	$	121,851	$	44,719	$	166,570
Cost of revenue (including related party cost of revenue of $0.1 million, exclusive of depreciation and amortization)		107,794		19,738		127,532
Segment profit		14,057		24,981		39,038
Selling, general and administrative expenses (exclusive of depreciation and amortization)						34,683
Related party expense						4,683
Depreciation and amortization						3,851
Related party interest income, net						1,971
Interest expense, net						5,224
Foreign exchange losses, net						593
Changes in fair value of warrant liability						(597)
Other income, net						(929)
Net loss before income taxes					$	(10,441)


	Year ended December 31, 2022
	Bills & Payments		Technology		Total
Revenue, net (including related party revenue of $0.1 million)	$	136,858	$	43,634	$	180,492
Cost of revenue (including related party cost of revenue of $0.5 million, exclusive of depreciation and amortization)		114,297		22,490		136,787
Segment profit		22,561		21,144		43,705
Selling, general and administrative expenses (exclusive of depreciation and amortization)						32,956
Related party expense						8,309
Depreciation and amortization						4,390
Related party interest income, net						(25)
Interest expense, net						3,062
Foreign exchange losses, net						1,184
Other income, net						(804)
Net loss before income taxes					$	(5,367)

Basis of Presentation and Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total	$ 6,004
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation - Period of satisfaction (in years)	1 year
Total	$ 5,822
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation - Period of satisfaction (in years)	1 year
Total	$ 53
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation - Period of satisfaction (in years)	1 year
Total	$ 32
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation - Period of satisfaction (in years)	3 years
Total	$ 97

Warrants

12 Months Ended

Dec. 31, 2023

Warrants

Warrants

16.Warrants

As of December 31, 2023, the Company had the following common stock warrants outstanding:


	Warrants	Exercise Price	Issuance Date	Expiration
Private Placement Warrants	135,000	11.50	3/11/2021	11/29/2028
Forward Purchase Warrants	250,000	11.50	3/11/2021	11/29/2028
Public Warrants	6,249,980	11.50	3/11/2021	11/29/2028
Total	6,634,980

Public Warrants

The Public Warrants qualify for the derivative scope exception under ASC 815 and are therefore classified as equity on the consolidated balance sheets. They may only be exercised for a whole number of shares at a price of $11.50. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants are currently exercisable and will expire five years from the completion of the Business Combination or earlier upon redemption or liquidation.

The Company may redeem the outstanding Public Warrants if the price per share of common stock equals or exceeds $18.00 (except as described with respect to the Private Placement Warrants and Forward Purchase Warrants):

●

in whole and not in part;

●

at a price of $0.01 per Warrant;

●

upon not less than 30 days’ prior written notice of redemption to each warrantholder; and

●

if, and only if, the closing price of the Common stock equals or exceeds $18.00 per share (as adjusted) for any of 20 trading days within a 30-trading day period commencing once the Warrants become exercisable and ending three trading days before the Company sends the notice of redemption to the warrantholders.

If and when the Public Warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of Common Stock upon exercise of the Public Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.

Private Warrants

The Private Warrants are identical to the Public Warrants, except that so long as they are held by Cantor or any Permitted Transferees, as applicable, the Private Warrants (i) may be exercised for cash or on a cashless basis, (ii) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business Combination, and (iii) shall not be redeemable by the Company,

Upon exercise of each of the Public Warrants and Private Warrants, the exercise price and number of shares of Common Stock issuable may be adjusted in certain circumstances including in the event of a stock dividend, a consolidation, combination, reverse stock split or reclassification of shares of Common Stock.

Employee Benefit Plans - Funded Status (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Change in Benefit Obligation:
Service cost	$ 37	$ 53
Interest cost	3,050	1,910
Change in Plan Assets:
Fair value of plan assets at beginning of period	45,694
Fair value of plan assets at end of year	52,081	45,694
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial gain	200	(3,300)
Net amount recognized in accumulated comprehensive loss, net of tax	(157)	3,298
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate fair value of plan assets	52,081	45,694
Pension Plan
Change in Benefit Obligation:
Benefit obligation at beginning of period	61,770	117,582
Service cost	37	53
Interest cost	3,050	1,910
Actuarial gain	(1,019)	(44,748)
Plan curtailment		149
Benefits paid	(2,577)	(1,915)
Foreign-exchange rate changes	3,028	(11,261)
Benefit obligation at end of year	64,289	61,770
Change in Plan Assets:
Fair value of plan assets at beginning of period	45,694	90,225
Actual (loss) return on plan assets	3,559	(36,818)
Employer contributions	2,993	2,862
Benefits paid	2,473	1,818
Foreign-exchange rate changes	2,308	(8,757)
Fair value of plan assets at end of year	52,081	45,694
Funded status at end of year	(12,208)	(16,076)
Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net	(12,208)	(16,076)
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial gain	(3,331)	(6,959)
Net prior service costs	(124)	(124)
Net amount recognized in accumulated comprehensive loss, net of tax	(3,455)	(7,083)
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	64,289	61,770
Aggregate accumulated benefit obligation	64,289	61,770
Aggregate fair value of plan assets	$ 52,081	$ 45,694

Lease - ROU assets and lease liabilities (Details) $ in Thousands	Dec. 31, 2023 USD ($) location	Dec. 31, 2022 USD ($)
Leases
Owned facilities \| location	2
Operating Lease
Operating lease right-of-use assets, net	$ 6,865	$ 5,848
Current portion of operating lease liabilities	1,941	1,796
Operating lease liabilities, net of current portion	5,065	3,963
Finance Lease
Finance lease right-of-use assets, net (included in Property, plant and equipment, net)	694	1,345
Current portion of finance lease liabilities	638	757
Finance lease liabilities, net of current portion	$ 23	$ 658

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net Income (Loss)	$ (11,047)	$ (7,929)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	3,467	3,779
Amortization of intangible assets	384	616
Credit loss expense	343	181
Changes in fair value of warrant liability	(597)
Unrealized foreign currency (gains) losses	(616)	1,550
Loss on sale of property, plant and equipment		82
Change in deferred income taxes	(422)	1,668
Change in operating assets and liabilities
Accounts receivable	5,990	(3,369)
Inventories	(58)	(688)
Prepaid expense and other assets	2,123	4,253
Accounts payable	(2,417)	3,834
Related parties payable	(843)	14,073
Accrued expenses and other liabilities	2,629	(7,727)
Deferred revenue	67	510
Customer deposits	(538)	(943)
Net cash provided by (used in) operating activities	(1,535)	9,890
Cash flows from investing activities
Purchase of property, plant and equipment	(2,330)	(6,366)
Cash paid for costs of fulfilling a contract	(339)
Net cash used in investing activities	(2,669)	(6,366)
Cash flows from financing activities
Borrowings under secured borrowing facility	87,635	123,079
Principal repayment on borrowings under secured borrowing facility	(91,662)	(124,291)
Principal payments on Secured Credit Facility	(920)	(829)
Proceeds from Secured Credit Facility	223	1,732
Principal payments on finance leases	(786)	(1,021)
Proceeds from Business Combination, net of transaction expenses	5,205
Net cash used in financing activities	(305)	(1,329)
Effect of exchange rates on cash and cash equivalents	3,941	2,369
Net increase (decrease) in cash and cash equivalents	(568)	4,562
Cash and equivalents, beginning of period	7,473	2,910
Cash and equivalents, end of period	6,905	7,473
Supplemental cash flow data:
Income tax payments, net of refunds received	1,059	1,288
Interest paid	$ 1,798	$ 3,028

Related Parties (Tables)

12 Months Ended

Dec. 31, 2023


	Years ended December 31,
(dollars in thousands)	2023		2022
Related party shared services	$	3,515	$	4,051
Related party royalty		631		631
Related party service fee		537		3,627
Total related party expense	$	4,683	$	8,309

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Unrecognized tax benefits, income tax penalties and interest expense	$ 0
Unrecognized tax benefits	$ 684	$ 0

Basis of Presentation and Summary of Significant Accounting Policies - Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	11 Months Ended	12 Months Ended
	Dec. 31, 2023	Nov. 29, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Basis of Presentation and Summary of Significant Accounting Policies
Common Stock excluded in calculation of diluted net-loss per share (in shares)			6,634,980	6,634,980	6,634,980
Exercise of warrants sold in IPO and Private Placement (in shares)			6,634,980	6,634,980	6,634,980
Net income (loss) attributable to common stockholders	$ 2,073	$ (13,120)	$ (11,047)	$ (7,929)
Weighted average common shares outstanding - basic (in shares)			22,535,920	21,802,689
Weighted average common shares outstanding - diluted (in shares)			22,535,920	21,802,689
Loss Per Share - basic (in $ per share)			$ (0.49)	$ (0.36)
Loss Per Share - diluted (in $ per share)			$ (0.49)	$ (0.36)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 3
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Income Taxes reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes
Tax expense at statutory rate	$ (2,193)	$ (1,128)
Foreign rate difference	(474)	428
Return to provision adjustments	(624)	399
Rate change	(924)	(561)
Change in valuation allowance	4,116	2,296
Permanent differences	(75)	1,129
Unrecognized tax benefits	684
Other	96
Income tax expense	$ 606	$ 2,562

Basis of Presentation and Summary of Significant Accounting Policies - Restructuring Charges (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Restructuring charges	$ 4,484	$ 267

Inventories

12 Months Ended

Dec. 31, 2023

Inventories

Inventories

4.Inventories

Inventories, net consist of the following:


	December 31,
(dollars in thousands)	2023		2022
Finished goods	$	7,182	$	6,607
Allowance for obsolescence		(2,442)		(2,081)
Total inventories, net	$	4,740	$	4,526

Finished goods inventory includes of $2.4 million and $2.1 million of allowance for obsolescence as of December 31, 2023 and 2022, respectively. Our allowance for obsolescence is based on a policy developed by historical experience and management judgment.

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases

Schedule of ROU assets and lease liabilities


	December 31,
Consolidated balance sheets location (dollars in thousands)	2023		2022
Operating Lease
Operating lease right-of-use assets, net	$	6,865	$	5,848
Current portion of operating lease liabilities		1,941		1,796
Operating lease liabilities, net of current position		5,065		3,963
Finance Lease
Finance lease right-of-use assets, net (included in Property, plant and equipment, net)		694		1,345
Current portion of finance lease liabilities		638		757
Finance lease liabilities, net of current portion		23		658

Schedule of supplemental consolidated balance sheet information related to leases


	December 31,
	2023		2022
Weighted-average remaining lease term
Operating Leases	3.47		4.16
Finance leases	0.71		1.38

Weighted-average discount rate
Operating Leases	13.5	%	8.5	%
Finance leases	6.9	%	8.0	%

Schedule of maturities of finance and operating lease liabilities


	Finance		Operating
(dollars in thousands)	Leases		Leases
2024	$	691	$	2,733
2025		15		2,433
2026		—		1,854
2027		—		1,621
2028		—		126
Total lease payments		706		8,767
Less: Imputed interest		(45)		(1,761)
Present value of lease liabilities	$	661	$	7,006

Schedule of cash paid and related right-of-use operating finance or operating lease recognized


(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,166	$	4,347
Financing cash flows from finance leases		786		1,021
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases	$	4,786	$	34
Finance leases		—		104

Inventories (Tables)

12 Months Ended

Dec. 31, 2023

Inventories

Schedule of Inventories, Net


	December 31,
(dollars in thousands)	2023		2022
Finished goods	$	7,182	$	6,607
Allowance for obsolescence		(2,442)		(2,081)
Total inventories, net	$	4,740	$	4,526

General (Details) $ in Thousands	Dec. 31, 2023 USD ($) client location country	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
General
Number of clients served \| client	2,000
Number of Countries \| country	15
Number of Locations \| location	32
Reduction in the Net Parent Investment due to reclassification			$ (5,845)
Increase to foreign currency translation adjustment	$ (1,416)		$ (17,789)
Classification Adjustment
General
Reduction in the Net Parent Investment due to reclassification		$ (18,900)
Increase to foreign currency translation adjustment		$ (18,900)

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2023

Prepaid Expenses and Other Current Assets

Schedule of Prepaid Expenses and Other Current Assets


	December 31,
(dollars in thousands)	2023		2022
Prepaid postage	$	1,924	$	2,048
Government receivables		1,600		3,496
Advance to suppliers		620		493
Prepaid maintenance		589		390
Deposits		492		340
Deferred stock issuance costs		—		478
Other prepaids		2,202		1,528
Total prepaid expenses and other current assets	$	7,427	$	8,773

Accrued Liabilities

12 Months Ended

Dec. 31, 2023

Accrued Liabilities

Accrued Liabilities

10.Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,
(dollars in thousands)	2023		2022
Accrued taxes (exclusive of income taxes)	$	5,892	$	10,691
Accrued employee related expenses		3,883		377
Accrued legal reserve for pending litigation		3,097		3,977
Accrued professional and legal fees		4,171		3,006
Accrued postage and shipping		2,635		1,980
Accrued facility related expenses		797		421
Other accruals		4,267		4,272
Total accrued liabilities	$	24,742	$	24,724

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Inventories
Finished goods	$ 7,182	$ 6,607
Allowance for obsolescence	(2,442)	(2,081)
Total inventories, net	4,740	4,526
Allowance for obsolescence finished goods	$ 2,400	$ 2,100

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Consolidated Statements of Comprehensive Loss
Net Income (Loss)	$ (11,047)	$ (7,929)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(2,995)	444
Unrealized pension actuarial gain, net of tax	3,455	7,083
Total other comprehensive loss, net of tax	$ (10,587)	$ (402)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Basis of Presentation and Summary of Significant Accounting Policies - Allowance for expected credit losses (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Changes in allowance for expected credit losses:
Balance at January 1, 2023 of the allowance for expected credit losses	$ 929
Change in the provision for expected credit losses for the period	343
Balance at December 31, 2023 of the allowance for expected credit losses	$ 1,272

Commitments and Contingencies - Company Subsidiary Litigation (Details) - Claim brought by former employees for their dismissal $ in Millions			1 Months Ended
	Nov. 10, 2023 USD ($)	May 09, 2023 USD ($)	Mar. 31, 2023 USD ($) claim	Apr. 30, 2020 location employee	Dec. 31, 2023 USD ($)
Loss Contingencies [Line Items]
Number of plaintiff employees \| employee				71
Number Of Production Sites Closed \| location				2
Accrued Liabilities					$ 2.2
Number of claimants who filed an application for summary proceedings \| claim			67
Principle settlement \| claim			4
Amount claimed by the claimants who filed an application for summary proceedings			$ 1.1
Settlement value decided by the court		$ 1.1
Settlement paid by the company	$ 1.1

Warrants (Tables)

12 Months Ended

Dec. 31, 2023

Warrants

Schedule of common stock warrants outstanding


	Warrants	Exercise Price	Issuance Date	Expiration
Private Placement Warrants	135,000	11.50	3/11/2021	11/29/2028
Forward Purchase Warrants	250,000	11.50	3/11/2021	11/29/2028
Public Warrants	6,249,980	11.50	3/11/2021	11/29/2028
Total	6,634,980

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Basis of Presentation and Summary of Significant Accounting Policies

Schedule of disaggregation of revenue


	Year ended December 31,
(dollars in thousands)	2023		2022
France	$	57,746	$	66,054
Germany		45,093		55,668
United Kingdom		35,579		32,061
Sweden		17,575		17,640
Other		10,343		8,926
Total Revenue, net	$	166,336	$	180,349

Schedule of contract balances


	December 31,		December 31,		January 1,
(dollars in thousands)	2023		2022		2022
Accounts receivable, net	$	30,795	$	35,977	$	35,109
Deferred revenues		6,004		5,660		5,760
Customer deposits		536		1,061		2,147
Costs to obtain and fulfill a contract		350		44		60

Schedule of remaining performance obligations to be satisfied in future periods


(dollars in thousands)
2024	$	5,822
2025		53
2026		32
2027 and thereafter		97
Total	$	6,004

Schedule of components of basic and diluted earnings per share


	Year Ended December 31,
	2023		2022
Net loss attributable to common stockholders (A)	$	(11,047)	$	(7,929)
Weighted average common shares outstanding – basic and diluted (B)		22,535,920		21,802,689
Loss Per Share:
Basic and diluted (A/B)	$	(0.49)	$	(0.36)

Schedule of changes in allowance for expected credit losses

The following table describes the changes in the allowance for expected credit losses for the year ended December 31, 2023 (all related to accounts receivables):


(dollars in thousands)
Balance at January 1, 2023 of the allowance for expected credit losses	$	929
Change in the provision for expected credit losses for the period		343
Balance at December 31, 2023 of the allowance for expected credit losses	$	1,272

Segment Information

12 Months Ended

Dec. 31, 2023

Segment Information

Segment Information

21.Segment Information

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with its clients. The Company is organized into two segments: Bills and Payments and Technology.

Bills and Payments

The Bills & Payments business unit primarily focuses on optimizing how bills and payments are processed by businesses of all sizes and industries. It offers automation of Accounts Payable (“AP”) and Accounts Receivables (“AR”) processes and through its platform, XBP, seeks to integrate buyers and suppliers across Europe. This business unit also includes our digital transformation revenue, which is both project based and recurring.

Technology

The Technology business unit primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services.

The chief operating decision maker reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate Selling, general, and administrative expenses, depreciation and amortization, interest expense and foreign exchange losses, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented. A reconciliation of segment profit to net loss before income taxes is presented below.


	Year ended December 31, 2023
	Bills & Payments		Technology		Total
Revenue, net (including related party revenue of $0.2 million)	$	121,851	$	44,719	$	166,570
Cost of revenue (including related party cost of revenue of $0.1 million, exclusive of depreciation and amortization)		107,794		19,738		127,532
Segment profit		14,057		24,981		39,038
Selling, general and administrative expenses (exclusive of depreciation and amortization)						34,683
Related party expense						4,683
Depreciation and amortization						3,851
Related party interest income, net						1,971
Interest expense, net						5,224
Foreign exchange losses, net						593
Changes in fair value of warrant liability						(597)
Other income, net						(929)
Net loss before income taxes					$	(10,441)


	Year ended December 31, 2022
	Bills & Payments		Technology		Total
Revenue, net (including related party revenue of $0.1 million)	$	136,858	$	43,634	$	180,492
Cost of revenue (including related party cost of revenue of $0.5 million, exclusive of depreciation and amortization)		114,297		22,490		136,787
Segment profit		22,561		21,144		43,705
Selling, general and administrative expenses (exclusive of depreciation and amortization)						32,956
Related party expense						8,309
Depreciation and amortization						4,390
Related party interest income, net						(25)
Interest expense, net						3,062
Foreign exchange losses, net						1,184
Other income, net						(804)
Net loss before income taxes					$	(5,367)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

General

12 Months Ended

Dec. 31, 2023

General

General

XBP Europe Holdings, Inc.

Notes to the Consolidated Financial Statements

(in thousands of United States dollars except share and per share amounts)

1.General

XBP Europe Holdings, Inc. (the “Company”, “XBP Europe”, or “our”) is a pan-European integrator of bills, payments and related solutions and services seeking to enable digital transformation of businesses. The Company’s name — “XBP” — stands for “exchange for bills and payments” and reflects the Company’s strategy to facilitate connections between buyers and suppliers to optimize clients’ bills and payments and related digitization processes. XBP believes its business ultimately advances digital transformation, improves market-wide liquidity, and encourages sustainable business practices.

The Company provides business process management solutions with proprietary software suites and deep domain expertise, serving as a technology and operations partner for its clients’ strategic journeys and streamlining their complex, disconnected payment processes. The Company serves over 2,000 clients across Europe, the Middle East and Africa (“EMEA”). The Company’s client relationships span multiple industries, including banking, healthcare, insurance, and the public sector. The Company is able to deploy its solutions to clients in any EMEA market due to its cloud-based structure. Its physical footprint spans 15 countries with 32 locations.

Classification Adjustment

In preparing the condensed combined and consolidated financial statements for the three and six months ended June 30, 2023, the Company determined that net parent investment should be reduced by $18.9 million with an offsetting increase to foreign currency translation adjustment in the same amount, in order to conform carve-out financial statements of XBP Europe, Inc. to the transaction parameters of the Merger Agreement. Accordingly, the consolidated balance sheets as of December 31, 2023 and statement of stockholders’ deficit for the year ended December 31, 2023 were adjusted for this reclass.

Merger/Business Combination with CF Acquisition Corp. VIII

On October 9, 2022, XBP Europe, Inc. entered into an Agreement and Plan of Merger (“Merger Agreement”) with CF Acquisition Corp. VIII, a special purpose acquisition company (“CF VIII”), whereby the business combination will be accounted for as a reverse capitalization in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, CF VIII will be treated as the “acquired” company for financial reporting purposes with XBP Europe surviving as a direct wholly-owned subsidiary of CF VIII.

On November 29, 2023 (the “Closing Date”), the Company consummated the Business Combination pursuant to the Merger Agreement. On the Closing Date, the registrant changed its name from CF Acquisition Corp. VIII to XBP Europe Holdings, Inc.

Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable
Less: Allowance for credit losses	$ (1,272)	$ (929)
Total accounts receivable, net	30,795	35,977	$ 35,109
Billed receivables
Accounts Receivable
Accounts receivables, gross	20,885	27,267
Unbilled receivables
Accounts Receivable
Accounts receivables, gross	$ 11,182	$ 9,639

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Actual costs that would have been incurred if XBP Europe had been a stand-alone Company would depend on multiple factors, including organizational structure and strategic decisions.

Use of Estimates in Preparation of the Consolidated Financial Statements

Segment Reporting

The Company consists of two segments:

The Technology business unit primarily focuses on sales of recurring software licenses and related maintenance, hardware solutions and related maintenance and professional services.

Cash and Cash Equivalents

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable and Allowance for Expected Credit Losses

Inventories

Property, Plant and Equipment

Intangible Assets

Customer Relationships

Developed Technology

Capitalized Software Costs

Outsourced Contract Costs

represent the enhancement of resources that will be used in satisfying a future performance obligation (the services under the anticipated contract); and are expected to be recovered.

Impairment of Long-Lived Assets

Goodwill

Benefit Plan Accruals

Leases

Warrants

Revenue Recognition

Nature of Services

Revenue from the sale of hardware solutions is recognized on a point in time basis and related maintenance are recognized ratably over the contractual term.

Disaggregation of Revenues

The following tables disaggregate revenue from contracts by geographic region for the years ended December 31, 2023 and 2022:


	Year ended December 31,
(dollars in thousands)	2023		2022
France	$	57,746	$	66,054
Germany		45,093		55,668
United Kingdom		35,579		32,061
Sweden		17,575		17,640
Other		10,343		8,926
Total Revenue, net	$	166,336	$	180,349

Contract Balances

The following table presents contract assets, contract liabilities and contract costs recognized at December 31, 2023 and 2022:


	December 31,		December 31,		January 1,
(dollars in thousands)	2023		2022		2022
Accounts receivable, net	$	30,795	$	35,977	$	35,109
Deferred revenues		6,004		5,660		5,760
Customer deposits		536		1,061		2,147
Costs to obtain and fulfill a contract		350		44		60

Performance Obligations

Reimbursements from customers, such as postage costs, are included in revenue, while the related costs are included in cost of revenue.

Transaction Price Allocated to the Remaining Performance Obligations


(dollars in thousands)
2024	$	5,822
2025		53
2026		32
2027 and thereafter		97
Total	$	6,004

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2023 and 2022 were $0.2 million and $0.3 million, respectively.

Research and Development

Research and development costs are expensed as incurred. Research and development expenses for the years ended December 31, 2023 and 2022 were $0.9 million and $1.1 million, respectively.

Restructuring Charges

Income Taxes

Loss Contingencies

Foreign Currency Translation

Net Loss per Share

The components of basic and diluted EPS are as follows:


	Year Ended December 31,
	2023		2022
Net loss attributable to common stockholders (A)	$	(11,047)	$	(7,929)
Weighted average common shares outstanding – basic and diluted (B)		22,535,920		21,802,689
Loss Per Share:
Basic and diluted (A/B)	$	(0.49)	$	(0.36)

Fair Value Measurements

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Refer to Note 13 — Employee Benefit Plans and Note 15 — Fair Value Measurement for further discussion.

Concentration of Credit Risk

Recently Adopted Accounting Pronouncements

The following table describes the changes in the allowance for expected credit losses for the year ended December 31, 2023 (all related to accounts receivables):


(dollars in thousands)
Balance at January 1, 2023 of the allowance for expected credit losses	$	929
Change in the provision for expected credit losses for the period		343
Balance at December 31, 2023 of the allowance for expected credit losses	$	1,272

Recently Issued Accounting Pronouncements

Commitments and Contingencies - Adverse Arbitration Order (Details) - Breach of contract and other damages by the customer € in Millions, $ in Millions		1 Months Ended
	May 28, 2021 USD ($)	Nov. 30, 2020 USD ($)	Sep. 30, 2020 EUR (€)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Counterclaims against the company by the customer \| €			€ 10.0
Amount awarded to the customer by the arbitrator		$ 13.0
Amount agreed to pay in settlement agreement	$ 8.9
Outstanding balance				$ 0.9	$ 1.6

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

14.Commitments and Contingencies

Litigation

The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe these actions will have a material, adverse effect on our consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.

Adverse Arbitration Order

In April 2020, one of the Company’s Nordic subsidiaries commenced an arbitration in Finland against a customer alleging breach of contract and other damages in connection with an outsourcing services agreement and transition services agreement executed in 2017. In September 2020, the customer submitted counterclaims against the Company in an aggregate amount in excess of €10.0 million. Following an expedited arbitration, in late November 2020, the arbitrator awarded the customer approximately $13.0 million in the aggregate for the counterclaimed damages and costs. The Company filed an application to annul the award in late January 2021 with the relevant court asserting, among other bases, that the arbitrator violated due process and procedural rules by disallowing the Company’s witness and expert testimony and maintaining the expedited format following the assertion of significant counterclaims which would ordinarily have required the application of normal rather than expedited rules. On May 28, 2021, the parties entered into a settlement agreement resolving this dispute for a total of $8.9 million including the reimbursement of certain third party charges. As of December 31, 2023 and 2022, there was a net outstanding balance of $0.9 million and $1.6 million, respectively, for this matter included in accrued liabilities on the consolidated balance sheets.

Company Subsidiary Litigation

A group of 71 former employees brought a claim against a subsidiary of XBP Europe related to their dismissal resulting from the closure of two production sites in France in 2020. The employees filed complaints with the Labor Court on June 9, 2022. Conciliation hearings at the Labor Court were held on September 27, 2022, December 13, 2022, March 7, 2023, September 5, 2023 and November 14, 2023.

In March 2023, 67 claimants (after the in principle settlement was agreed with the first 4 claimants) filed an application for summary proceedings in respect of part of the claim for a total claim of $1.1 million. The summary proceedings hearing was held on April 11, 2023 and the court issued its decision on May 9, 2023 upholding all of the plaintiffs’ claims for a total amount of $1.1 million, however the court’s decision does not increase the Company’s anticipated exposure for the overall claim.

The Company has appealed against the decision (and paid the amount of $1.1 million on November 10, 2023 pending the appeal), the appeal hearing was scheduled for March 7, 2024 and has been rescheduled for April 8, 2024.

The substantive hearing was held on February 16, 2024 and a decision is expected at the end of June 2024.

The Company is in settlement discussions with plaintiff’s counsel. As of March 22, 2024, the Company reached a number of in principle settlements with a certain number of claimants. The settlement negotiations for the remaining claimants are ongoing simultaneously with the court proceedings although there is no certainty the in principle settlements or ongoing negotiations will result in settlement agreements. The Company accrued $2.2 million in accrued liabilities on the consolidated balance sheets as of December 31, 2023 and 2022, based on the estimate of the range of possible losses.

Contract-Related Contingencies

The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations, consolidated statement of comprehensive loss or consolidated statements of cash flows.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Employee Benefit Plans

Employee Benefit Plans

13.Employee Benefit Plans

U.K. Pension Plan

Two of our subsidiaries in the United Kingdom provide pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company or December 31, 2015. The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (15 to 20 years) encompassing many business and economic cycles.

German Pension Plan

XBP Europe’s subsidiary in Germany, Exela Technologies ECM Solutions GmbH, provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company.

Norway Pension Plan

Our subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company or April 30, 2018.

Asterion Pension Plan

In 2018, Exela Technologies Holding GmbH (through the Asterion Business Combination), acquired the obligation to provide pension benefits to eligible retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an

actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants at the earlier of two dates, the participants leaving the Company or April 10, 2018.

Funded Status

The change in benefit obligations, the change in the fair value of the plan assets and the funded status of our pension plans (except for the German pension plan which is unfunded) and the amounts recognized in our consolidated financial statements are as follows:


	Year Ended December 31,
(dollars in thousands)	2023		2022
Change in Benefit Obligation:
Benefit obligation at beginning of period	$	61,770	$	117,582
Service cost		37		53
Interest cost		3,050		1,910
Actuarial gain		(1,019)		(44,748)
Plan curtailment		—		149
Benefits paid		(2,577)		(1,915)
Foreign-exchange rate changes		3,028		(11,261)
Benefit obligation at end of year	$	64,289	$	61,770

Change in Plan Assets:
Fair value of plan assets at beginning of period	$	45,694	$	90,225
Actual (loss) return on plan assets		3,559		(36,818)
Employer contributions		2,993		2,862
Benefits paid		(2,473)		(1,818)
Foreign-exchange rate changes		2,308		(8,757)
Fair value of plan assets at end of year		52,081		45,694
Funded status at end of year	$	(12,208)	$	(16,076)

Net amount recognized in the Consolidated Balance Sheets:
Pension liability, net^(a)	$	(12,208)	$	(16,076)
Amounts recognized in accumulated other comprehensive loss, net of tax consist of:
Net actuarial gain		(3,331)		(6,959)
Net prior service costs		(124)		(124)
Net amount recognized in accumulated comprehensive loss, net of tax	$	(3,455)	$	(7,083)

Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate projected benefit obligation	$	64,289	$	61,770
Aggregate accumulated benefit obligation	$	64,289	$	61,770
Aggregate fair value of plan assets	$	52,081	$	45,694

(a)

Tax Effect on Accumulated Other Comprehensive Loss

As of December 31, 2023, and 2022, the Company had actuarial (gain) loss of $(0.2) million and $3.3 million, respectively, which is net of a deferred tax benefit of $1.3 million and $1.9 million for December 31, 2023, and 2022, respectively.

Pension and Postretirement Expense

The components of the net periodic benefit cost are as follows:


	Year ended December 31,
(dollars in thousands)	2023		2022
Service cost	$	37	$	53
Interest cost		3,050		1,910
Expected return on plan assets		(2,717)		(2,856)
Amortization
Amortization of prior service cost		124		273
Amortization of net loss		1,664		1,768
Net periodic benefit cost	$	2,158	$	1,148

The Company records pension interest cost within Interest expense, net. Expected return on plan assets, amortization of prior service costs, and amortization of net losses are recorded within Other income, net. Service cost is recorded within Cost of revenue.

Valuation

The Company uses the corridor approach and projected unit credit method in the valuation of its defined benefit plans for the UK, Germany, and Norway respectively. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. For defined benefit pension plans, these unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over 15 years. Similarly, the Company used the Projected Unit Credit Method for the German Plan, and evaluated the assumptions used to derive the related benefit obligations consisting primarily of financial and demographic assumptions including commencement of employment, biometric decrement tables, retirement age, staff turnover. The projected unit credit method determines the present value of our defined benefit obligations and related service costs by taking into account each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately in building up the final obligation. Benefit is attributed to periods of service using the plan’s benefit formula, unless an employee’s service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight-line basis is used.

The following tables set forth the principal actuarial assumptions used to determine benefit obligation and net periodic benefit costs:


	December 31,
	2023		2022		2023		2022		2023		2022		2023		2022

(dollars in thousands)	UK				Germany				Norway				Asterion
Weighted-average assumptions used to determine benefit obligations:
Discount rate	4.80	%	5.00	%	3.16	%	3.80	%	3.10	%	3.00	%	3.16	%	3.80	%
Rate of compensation increase	N/A		N/A		N/A		N/A		3.50	%	3.50	%	N/A		N/A
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	5.00	%	1.80	%	3.16	%	3.80	%	3.00	%	3.00	%	3.16	%	3.80	%
Expected asset return	5.87	%	3.45	%	N/A		N/A		4.45	%	4.15	%	3.16	%	3.80	%
Rate of compensation increase	N/A		N/A		N/A		N/A		3.50	%	3.50	%	N/A		N/A

The Germany plan is an unfunded plan and therefore has no plan assets. The expected rate of return assumptions for plan assets are based mainly on historical performance achieved over a long period of time (10 to 20 years) encompassing many business and economic cycles. Adjustments, upward and downward, may be made to

those historical returns to reflect future capital market expectations; these expectations are typically derived from expert advice from the investment community and surveys of peer company assumptions.

The Company assumed a weighted average expected long-term rate of return on plan assets for the UK scheme of 5.79%. Our long-term expected rate of return on cash is determined by reference to UK government 10 year bond yields at the balance sheet dates. The long-term expected return on bonds is determined by reference to corporate bond yields at the balance sheet dates. The long-term expected rate of return on equities and diversified growth funds is based on the rate of return on UK long dated government bonds with an allowance for out-performance. The long-term expected rate of return on the liability driven investments holdings is determined by reference to UK government 20 year bond yields at the balance sheet dates.

The discount rate assumption was developed considering the current yield on an investment grade non-gilt index with an adjustment to the yield to match the average duration of the index with the average duration of the plan’s liabilities. The index utilized reflected the market’s yield requirements for these types of investments.

The inflation rate assumption was developed considering the difference in yields between a long-term government stocks index and a long-term index-linked stocks index. This difference was modified to consider the depression of the yield on index-linked stocks due to the shortage of supply and high demand, the premium for inflation above the expectation built into the yield on fixed-interest stocks and the government’s target rate for inflation (CPI) at 2.3%. The assumptions used are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered, may not necessarily be borne out in practice.

Plan Assets

The investment objective for the UK plan is to earn, over moving fifteen to twenty year periods, the long-term expected rate of return, net of investment fees and transaction costs, to satisfy the benefit obligations of the plan, while at the same time maintaining sufficient liquidity to pay benefit obligations and proper expenses, and meet any other cash needs, in the short-to medium-term.

Our investment policy related to the UK defined benefit plan is to continue to maintain investments in government gilts and highly rated bonds as a means to reduce the overall risk of assets held in the fund. No specific targeted allocation percentages have been set by category, but are set at the direction and discretion of the plan trustees. The weighted average allocation of plan assets by asset category is as follows:


	Year Ended December 31,
	2023		2022
U.K. and other international equities	27.3	%	27.1	%
U.K. government and corporate bonds	5.1		5.5
Diversified growth fund	15.1		18.4
Liability driven investments	50.9		44.3
Multi-asset credit fund	1.6		4.7
Total	100.0	%	100.0	%

The following tables set forth, by category and within the fair value hierarchy, the fair value of our pension assets at December 31, 2023 and 2022:


	December 31, 2023
(dollars in thousands)	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	941	$	941	$	—	$	—
Equity funds:
U.K.		13,297		—		13,297		—
Fixed income securities:
Corporate bonds/U.K. Gilts		2,671		—		2,671		—
Other investments:
Diversified growth fund		7,846		—		7,846		—
Liability driven investments		26,488		—		26,488		—
Multi-asset credit fund		838		—		838		—
Total fair value	$	52,081	$	941	$	51,140	$	—


	December 31, 2022
(dollars in thousands)	Total		Level 1		Level 2		Level 3
Asset Category:
Cash	$	932	$	932	$	—	$	—
Equity funds:
U.K.		11,400		—		11,400		—
Fixed income securities:
Corporate bonds/U.K. Gilts		2,529		—		2,529		—
Other investments:
Diversified growth fund		8,417		—		8,417		—
Liability driven investments		20,258		—		20,258		—
Multi-asset credit fund		2,158		—		2,158		—
Total fair value	$	45,694	$	932	$	44,762	$	—

The plan assets are categorized as follows, as applicable:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Employer Contributions

XBP Europe’s funding of employer contributions is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $3.0 million and $2.9 million to its pension plans during the years ended December 31, 2023 and 2022, respectively. The Company has fully funded the pension plans for 2023 based on current plan provisions. The Company expects to contribute $2.7 million to the pension plans during 2024, based on current plan provisions.

Estimated Future Benefit Payments

The estimated future pension benefit payments expected to be paid to plan participants are as follow:


	Estimated
	Benefit
(dollars in thousands)	Payments
Year ended December 31,
2024	$	2,161
2025		2,781
2026		2,800
2027		3,122
2028		3,537
2029 – 2033		18,062
Total	$	32,463

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
-Section 55
-Paragraph 17
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-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (d)(i)
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

Fair Value Measurement (Details) $ in Thousands	12 Months Ended
Fair Value Measurement (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Fair Value Measurement
Changes in fair value of warrant liability	$ (597)
Level 3 \| Private Warrants
Fair Value Measurement
Value of private warrants	$ 100

Debt (Details) € in Millions, £ in Millions, $ in Millions					1 Months Ended			12 Months Ended
Debt (Details) € in Millions, £ in Millions, $ in Millions	Dec. 31, 2022 USD ($)	Dec. 31, 2021	Oct. 29, 2021	Aug. 25, 2020 EUR (€)	May 31, 2022 GBP (£)	Jun. 30, 2020 GBP (£)	Oct. 31, 2019 GBP (£)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 15, 2023 EUR (€)
Secured borrowing facility
Debt
Maximum borrowing facility amount \| €				€ 31.0
Cost of secured borrowing facility (in percent)				0.10%
Interest expenses								$ 0.6	$ 0.3
Outstanding balances payable under the Secured Borrowing Facility	$ 4.1							0.1	4.1
Secured borrowing facility \| Minimum
Debt
Annual fee \| €				€ 0.1
Secured borrowing facility \| Euro dollar
Debt
Spread on variable rate				0.70%
Amended factoring agreement
Debt
Maximum amount of accounts receivables under factoring \| €										€ 15.0
Amount of account receivables factored								6.8
Loss on sale of accounts receivables								0.3
2019 credit agreement
Debt
Outstanding balance of credit facility amount								11.4
2019 credit agreement \| Secured borrowings under Securitization Facility
Debt
Maximum borrowing facility amount \| £							£ 9.0
2019 credit agreement \| Secured Term loan A debt
Debt
Aggregate principal amount \| £							2.0
Outstanding balance of credit facility amount	1.9							1.9	1.9
2019 credit agreement \| Secured Term loan B debt
Debt
Aggregate principal amount \| £							2.0
Outstanding balance of credit facility amount	1.0							0.4	1.0
2019 credit agreement \| Revolvers
Debt
Aggregate principal amount \| £							£ 5.0
Outstanding balance of credit facility amount	6.0							6.4	6.0
2019 credit agreement \| Revolving working capital loan facility
Debt
Aggregate principal amount \| £						£ 4.0
Outstanding balance of credit facility amount	$ 4.8							6.4	4.8
2019 credit agreement \| Maximum
Debt
Available additional borrowings amount								0.1
2019 credit agreement \| LIBOR \| Secured Term loan A debt
Debt
Spread on variable rate							2.00%
2019 credit agreement \| LIBOR \| Secured Term loan B debt
Debt
Spread on variable rate							2.50%
2019 credit agreement \| LIBOR \| Revolvers
Debt
Spread on variable rate							3.00%
2019 credit agreement \| LIBOR \| Revolving working capital loan facility
Debt
Spread on variable rate						3.50%
2019 credit agreement \| SONIA \| Secured Term loan A debt
Debt
Spread on variable rate		2.00%
2019 credit agreement \| SONIA \| Secured Term loan B debt
Debt
Spread on variable rate		2.50%
2019 credit agreement \| SONIA \| Revolvers
Debt
Spread on variable rate			3.00%
2019 credit agreement \| SONIA \| Revolving working capital loan facility
Debt
Spread on variable rate	3.50%
2022 committed facility agreement
Debt
Outstanding balance of credit facility amount	$ 1.6							$ 1.5	$ 1.6
2022 committed facility agreement \| Term loan
Debt
Maximum borrowing facility amount \| £					£ 1.4
2022 committed facility agreement \| Base Rate of Bank of England \| Term loan
Debt
Spread on variable rate					3.50%

Intangible Assets and Goodwill - Schedule of goodwill (Details) $ in Thousands			12 Months Ended
	Oct. 01, 2023 USD ($)	Oct. 01, 2022 USD ($)	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Goodwill
Number of operating segments \| segment			2
Goodwill
Beginning balance			$ 22,062	$ 23,952
Impairments	$ 0	$ 0
Currency Translation Adjustments			848	(1,890)
Ending balance			22,910	22,062
Bills and payments
Goodwill
Beginning balance			9,689	10,447
Currency Translation Adjustments			369	(758)
Ending balance			10,058	9,689
Technology
Goodwill
Beginning balance			12,373	13,505
Currency Translation Adjustments			479	(1,132)
Ending balance			$ 12,852	$ 12,373

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Income Taxes - Deferred taxes assets (liabilities) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Deferred income tax assets:
Property, plant, and equipment	$ 638	$ 228
Defined benefit liability	3,431	4,214
Bad debt reserve	192	163
Inventories	168	160
Accrued liabilities	2,313	2,125
Accrued pension liabilities	716	699
Operating lease liabilities	1,183	258
Net operating loss	24,491	19,711
Total deferred income tax assets	33,132	27,558
Deferred income tax liabilities:
Operating lease right of use assets	(1,141)	(280)
Intangible assets	(550)	(777)
Total deferred income tax liabilities	(1,691)	(1,057)
Valuation allowance	(24,580)	(19,446)
Total net deferred income tax assets	6,861	7,055
Unrecognized tax benefits	684	$ 0
US NOL's
Deferred income tax liabilities:
Gross carrying amount	1,600
Tax-effected	300
Carryforwards of expiration	9,400
Operating loss carryforward subject to expiration	2,200
Unrecognized tax benefits	700
Foreign NOL's
Deferred income tax liabilities:
Gross carrying amount	98,200
Tax-effected	$ 24,600

Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands			12 Months Ended
	Oct. 01, 2023	Oct. 01, 2022	Dec. 31, 2023	Dec. 31, 2022
Intangibles, net
Gross Carrying Amount			$ 3,913	$ 3,498
Accumulated Amortization			(2,415)	(1,969)
Total intangibles, net			1,498	1,529
Goodwill impairment charges	$ 0	$ 0
Amortization of intangible assets			$ 384	$ 616
Customer relationships
Intangible Assets and Goodwill
Weighted Average Remaining Useful Life (in Years)			3 years	5 years
Intangibles, net
Gross Carrying Amount			$ 3,145	$ 3,049
Accumulated Amortization			(1,997)	(1,564)
Total intangibles, net			$ 1,148	$ 1,485
Outsource contract costs
Intangible Assets and Goodwill
Weighted Average Remaining Useful Life (in Years)			1 year	1 year 6 months
Intangibles, net
Gross Carrying Amount			$ 768	$ 449
Accumulated Amortization			(418)	(405)
Total intangibles, net			$ 350	$ 44

Restructuring - Schedule of restructuring activity and balance of restructuring liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Restructuring
Balance at January 1	$ 2,036	$ 4,237
Restructuring charges	4,484	267
Payment of benefits	(1,066)	(2,468)
Balance at December 31	5,454	2,036
Current portion of the restructuring liability included in Accrued compensation and benefits	$ 5,500	$ 2,000

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Mar. 28, 2024	Jun. 30, 2023
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-40206
Entity Registrant Name	XBP Europe Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-2002883
Entity Address, Address Line One	2701 East Grauwyler Road
Entity Address, City or Town	Irving
Entity Address State Or Province	TX
Entity Address, Postal Zip Code	75061
City Area Code	844
Local Phone Number	935-2832
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	true
Entity Public Float			$ 15,472,064
Entity Common Stock, Shares Outstanding		30,166,102
Entity Central Index Key	0001839530
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	UHY LLP
Auditor Firm ID	1195
Auditor Location	Sterling Heights, Michigan
Common Stock, Par Value $0.0001 per share
Title of 12(b) Security	Common Stock, Par Value $0.0001 per share
Trading Symbol	XBP
Security Exchange Name	NASDAQ
Redeemable warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50
Title of 12(b) Security	Redeemable warrants, each whole warrant exercisable for oneshare of common stock at an exercise price of $11.50
Trading Symbol	XBPEW
Security Exchange Name	NASDAQ

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes

Schedule of income tax provision


	Years ended December 31,
(In thousands)	2023		2022
Current income taxes
Federal	$	—	$	—
State		—		—
Foreign		1,028		1,653
Total Current	$	1,028	$	1,653

Deferred income taxes
Federal	$	—	$	—
State		—		—
Foreign		(422)		909
Total Deferred	$	(422)	$	909
Total income tax provision	$	606	$	2,562

Schedule of domestic and foreign components of loss before income tax provision


	Years ended December 31,
(In thousands)	2023		2022
U.S.	$	(3,199)	$	—
Foreign		(7,242)		(5,367)
Total	$	(10,441)	$	(5,367)

Schedule of components of our deferred taxes assets (liabilities)


	Years ended December 31,
(In thousands)	2023		2022
Deferred income tax assets:
Property, plant, and equipment	$	638	$	228
Defined benefit liability		3,431		4,214
Bad debt reserve		192		163
Inventories		168		160
Accrued liabilities		2,313		2,125
Accrued pension liabilities		716		699
Operating lease liabilities		1,183		258
Net operating loss		24,491		19,711
Total deferred income tax assets	$	33,132	$	27,558

Deferred income tax liabilities:
Operating lease right of use assets	$	(1,141)	$	(280)
Intangible assets		(550)		(777)
Total deferred income tax liabilities	$	(1,691)	$	(1,057)

Valuation allowance		(24,580)		(19,446)
Total net deferred income tax assets	$	6,861	$	7,055

Schedule of reconciliation of the significant differences between the federal statutory income tax and the effective income tax on pretax loss


	Years ended December 31,
(In thousands)	2023		2022
Tax expense at statutory rate	$	(2,193)	$	(1,128)
Foreign rate difference		(474)		428
Return to provision adjustments		(624)		399
Rate change		(924)		(561)
Change in valuation allowance		4,116		2,296
Permanent differences		(75)		1,129
Unrecognized tax benefits		684		—
Other		96		—
Income tax expense	$	606	$	2,562

Schedule of total amounts of unrecognized tax benefits

Total amounts of unrecognized tax benefits as of December 31, are as follows (in thousands):


	Years ended December 31,
(In thousands)	2023		2022
Unrecognized tax benefits—January 1	$	—	$	—
Gross increases—tax positions in prior period		684		—
Gross decreases—tax positions in prior period		—		—
Gross increases—tax positions in current period		—		—
Settlement		—		—
Lapse of statute of limitations		—		—
Unrecognized tax benefits—December 31	$	684	$	—

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Consolidated Balance Sheets
Allowance for credit losses	$ 1,272	$ 929
Accumulated Depreciation	$ 42,990	$ 44,629
Preferred stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock Authorized	10,000,000	10,000,000
Preferred stock Issued	0	0
Preferred stock Outstanding	0	0
Common stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock Authorized	160,000,000	160,000,000
Common stock Issued	30,166,102
Common stock Outstanding	30,166,102

Other Income, Net (Restated) (Tables)

12 Months Ended

Dec. 31, 2023

Other Income, Net (Restated)

Schedule of other income, net


	Years ended December 31,
(dollars in thousands)	2023		2022
Pension income, net	$	(929)	$	(804)
Total other income, net	$	(929)	$	(804)

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Selling, general and administrative expenses (exclusive of depreciation and amortization)	$ 34,683	$ 32,956
Related party expense	4,683	8,309
Depreciation and amortization	3,851	4,390
Operating loss	(4,179)	(1,950)
Other expense (income), net
Foreign exchange losses, net	593	1,184
Changes in fair value of warrant liability	(597)
Other (income) expense, net	(929)	(804)
Net loss before income taxes	(10,441)	(5,367)
Income tax expense	606	2,562
Net loss	$ (11,047)	$ (7,929)
Loss per share:
Basic (in dollars per share)	$ (0.49)	$ (0.36)
Diluted (in dollars per share)	$ (0.49)	$ (0.36)
Related Party
Revenue, net	$ 234	$ 143
Cost of revenue (exclusive of depreciation and amortization)	76	511
Related party expense	4,683	8,309
Other expense (income), net
Interest expense (income), net	1,971	(25)
Non-related party
Revenue, net	166,336	180,349
Cost of revenue (exclusive of depreciation and amortization)	127,456	136,276
Other expense (income), net
Interest expense (income), net	$ 5,224	$ 3,062

Debt - Debt Outstanding (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt
Total debt	$ 16,626	$ 19,416
Current portion of long-term debts	3,863	4,970
Long-term debt, net of current maturities	12,763	14,446
Term loan
Debt
Total debt	3,785	4,489
Revolvers
Debt
Total debt	12,767	10,852
Secured borrowings under Securitization Facility
Debt
Total debt	$ 74	$ 4,075

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
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Reference 6: http://www.xbrl.org/2003/role/exampleRef
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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Employee Benefit Plans - Actuarial assumptions used to determine benefit obligation and net periodic benefit costs (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
U.K. Pension Plan
Weighted-average assumptions used to determine net periodic benefit costs:
Expected asset return	5.79%
Pension Plan \| U.K. Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	4.80%	5.00%
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	5.00%	1.80%
Expected asset return	5.87%	3.45%
Pension Plan \| German Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	3.16%	3.80%
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	3.16%	3.80%
Pension Plan \| Norway Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	3.10%	3.00%
Rate of compensation increase	3.50%	3.50%
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	3.00%	3.00%
Expected asset return	4.45%	4.15%
Rate of compensation increase	3.50%	3.50%
Pension Plan \| Asterion Pension Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate	3.16%	3.80%
Weighted-average assumptions used to determine net periodic benefit costs:
Discount rate	3.16%	3.80%
Expected asset return	3.16%	3.80%

Basis of Presentation and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets
Impairment loss	$ 0	$ 0
Customer Relationships \| Minimum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	4 years
Customer Relationships \| Maximum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	16 years
Developed Technology \| Minimum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	5 years
Developed Technology \| Maximum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	8 years 6 months
Capitalized Software Costs
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	5 years
Outsourced Contract Costs \| Minimum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	3 years
Outsourced Contract Costs \| Maximum
Finite-Lived Intangible Assets
Intangible Assets - Useful Life (in years)	5 years

Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accrued Liabilities
Accrued taxes (exclusive of income taxes)	$ 5,892	$ 10,691
Accrued employee related expenses	3,883	377
Accrued legal reserve for pending litigation	3,097	3,977
Accrued professional and legal fees	4,171	3,006
Accrued postage and shipping	2,635	1,980
Accrued facility related expenses	797	421
Other accruals	4,267	4,272
Total accrued liabilities	$ 24,742	$ 24,724

Accounts Receivable

12 Months Ended

Dec. 31, 2023

Accounts Receivable

Accounts Receivable

5.Accounts Receivable

Accounts receivable, net consist of the following:


	December 31,
(dollars in thousands)	2023		2022
Billed receivables	$	20,885	$	27,267
Unbilled receivables		11,182		9,639
Less: Allowance for credit losses		(1,272)		(929)
Total accounts receivable, net	$	30,795	$	35,977

Unbilled receivables represent balances recognized as revenue that have not been billed to the customer. Our allowance for doubtful accounts is based on a policy developed by historical experience and management judgment. Adjustments to the allowance for credit losses may occur based on market conditions or specific client circumstances.

Related Parties - Notes receivable and payables (Details)				12 Months Ended			120 Months Ended
	Sep. 15, 2023 loan	Sep. 04, 2023 loan	Jan. 01, 2016 EUR (€)	Dec. 31, 2023 USD ($) loan	Dec. 31, 2022 USD ($)	Dec. 31, 2013	Dec. 31, 2023 USD ($)	Dec. 31, 2012	May 31, 2010 EUR (€)	Sep. 30, 2009 EUR (€)
Related Parties
Related party note receivable					$ 13,266,000
Related party notes payable				$ 1,542,000	11,164,000		$ 1,542,000
Related Party
Related Parties
Maximum amount agreed to be lent to related party \| €			€ 20,000,000
Term of Notes Receivables			6 years
Number of years extendable			1 year
Annual Interest rate of Notes Receivable			9.50%
Related party note receivable				0	13,300,000		0
Related party interest income				$ 0	1,300,000
Related Party \| Related party notes payable
Related Parties
Number of intercompany loan agreements entered \| loan				3
Maximum amount agreed to be lent by related party \| €									€ 9,300,000	€ 9,300,000
Additional maturity period				1 year
Related party notes payable				$ 0	11,200,000		$ 0
Related party interest expense				$ 1,400,000	$ 1,500,000
Related Party \| Related party notes payable \| LIBOR
Related Parties
Spread on variable rate				4.00%		12.00%	13.50%
Original Maturity Period				1 year
Fixed interest rate								4.00%
Related Party \| New related party notes payable
Related Parties
Number of intercompany loan agreements entered \| loan	1	3		4
Original Maturity Period				10 years
Related party notes payable				$ 1,500,000			$ 1,500,000
Related party interest expense				$ 100,000
Related Party \| New related party notes payable \| LIBOR
Related Parties
Spread on variable rate				6.00%

Basis of Presentation and Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Basis of Presentation and Summary of Significant Accounting Policies
Accounts receivable, net	$ 30,795	$ 35,977	$ 35,109
Deferred revenues	6,004	5,660	5,760
Customer deposits	536	1,061	2,147
Costs to obtain and fulfill a contract	350	44	$ 60
Amounts not billed to customers (included in Accounts receivable)	11,200	$ 9,600
Deferred revenue recognized during the period	$ 6,300

Leases - Cash paid and related right-of-use asset (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases
Operating cash flows from operating leases	$ 3,166	$ 4,347
Financing cash flows from finance leases	786	1,021
Operating leases	$ 4,786	34
Finance leases		$ 104

Employee Benefit Plans - Weighted average allocation of plan assets by asset category (Details)	Dec. 31, 2023	Dec. 31, 2022
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	100.00%	100.00%
U.K. and other international equities
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	27.30%	27.10%
U.K. government and corporate bonds
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	5.10%	5.50%
Diversified growth fund
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	15.10%	18.40%
Liability driven investments
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	50.90%	44.30%
Multi-asset credit fund
Weighted average allocation of plan assets by asset category
Allocation of plan assets (in percentage)	1.60%	4.70%

Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2023

Intangible Assets and Goodwill

Intangible Assets and Goodwill

9.Intangible Assets and Goodwill

Intangible Assets

Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consists of the following:


	Weighted
	Average	December 31, 2023
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
	(in Years)	Amount (a)		Amortization		net
Customer relationships	3.0	$	3,145	$	(1,997)	$	1,148
Outsource contract costs	1.0		768		(418)		350
Total intangibles, net		$	3,913	$	(2,415)	$	1,498


	Weighted
	Average	December 31, 2022
	Remaining	Gross
	Useful Life	Carrying		Accumulated		Intangible Asset,
	(in Years)	Amount (a)		Amortization		net
Customer relationships	5.0	$	3,049	$	(1,564)	$	1,485
Outsource contract costs	1.5		449		(405)		44
Total intangibles, net		$	3,498	$	(1,969)	$	1,529

(a)	Amounts include intangibles acquired in business combinations and asset acquisitions

Aggregate amortization expense related to intangibles was $0.4 million and $0.6 million for the years ended December 31, 2023 and 2022, respectively.

Estimated intangibles amortization expense for the three years consists of the following:


	Estimated
	Amortization
(dollars in thousands)	Expenses
2024	$	734
2025		384
2026		380
	$	1,498

Goodwill

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approach the markets and interacts with customers. The Company is organized into two segments: Bills and Payments and Technology (See Note 21 – Segment Information).

Goodwill by reporting segment consists of the following:


	Balances at								Currency		Balances at
	January 1,								Translation		December 31,
(dollars in thousands)	2023		Additions		Disposals		Impairments		Adjustments		2023
Bills and Payments	$	9,689	$	—	$	—	$	—	$	369	$	10,058
Technology		12,373		—		—		—		479		12,852
Total	$	22,062	$	—	$	—	$	—	$	848	$	22,910


	Balances at								Currency		Balances at
	January 1,								Translation		December 31,
(dollars in thousands)	2022		Additions		Disposals		Impairments		Adjustments		2022
Bills and Payments	$	10,447	$	—	$	—	$	—	$	(758)	$	9,689
Technology		13,505		—		—		—		(1,132)		12,373
Total	$	23,952	$	—	$	—	$	—	$	(1,890)	$	22,062

The Company tests for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis.

In connection with the completion of the annual impairment tests as of October 1, 2023 and 2022, the Company recorded no impairment charge to goodwill.

Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Basis of Presentation and Summary of Significant Accounting Policies
Foreign exchange losses, net	$ 593	$ 1,184

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Prepaid Expenses and Other Current Assets
Prepaid postage	$ 1,924	$ 2,048
Government receivables	1,600	3,496
Advance to suppliers	620	493
Prepaid maintenance	589	390
Deposits	492	340
Deferred stock issuance costs		478
Other prepaids	2,202	1,528
Total prepaid expenses and other current assets	$ 7,427	$ 8,773

Other Income, Net (Restated)

12 Months Ended

Dec. 31, 2023

Other Income, Net (Restated)

Other Income, Net (Restated)

19.Other Income, Net

The components of other income, net in the consolidated statements of operations are summarized as follows:


	Years ended December 31,
(dollars in thousands)	2023		2022
Pension income, net	$	(929)	$	(804)
Total other income, net	$	(929)	$	(804)

Employee Benefit Plans - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) subsidiary employee	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Employee Benefit Plans
Aggregate fair value of plan assets	$ 52,081	$ 45,694
Actuarial (gain) loss	(200)	3,300
Deferred tax benefit	$ 1,300	1,900
Amortization period for unrecognized gains and losses in excess of corridor	15 years
U.K. Pension Plan
Employee Benefit Plans
Weighted average expected long-term rate of return on plan assets	5.79%
Pension Plan
Employee Benefit Plans
Aggregate fair value of plan assets	$ 52,081	45,694	$ 90,225
Pension liabilities (assets)	12,208	16,076
Actuarial (gain) loss	3,331	6,959
Employer contributions	2,993	2,862
Expected employer Contributions in 2024	$ 2,700
Pension Plan \| Maximum [Member]
Employee Benefit Plans
Period of historical performance achieved	20 years
Pension Plan \| Minimum [Member]
Employee Benefit Plans
Period of historical performance achieved	15 years
Pension Plan \| U.K. Pension Plan
Employee Benefit Plans
Number of subsidiaries which provide pension benefits \| subsidiary	2
Qualifying period for employees to be eligible for pension plan prior to threshold retirement date	3 years
Number of new employees registered under plan \| employee	0
Pension liabilities (assets)	$ 10,100	$ 13,700
Weighted average expected long-term rate of return on plan assets	5.87%	3.45%
Pension Plan \| Asterion Pension Plan
Employee Benefit Plans
Qualifying period for employees to be eligible for pension plan prior to threshold retirement date	3 years
Number of new employees registered under plan \| employee	0
Pension liabilities (assets)	$ 1,600	$ 1,700
Weighted average expected long-term rate of return on plan assets	3.16%	3.80%
Pension Plan \| German Pension Plan
Employee Benefit Plans
Qualifying period for employees to be eligible for pension plan prior to threshold retirement date	10 years
Number of new employees registered under plan \| employee	0
Aggregate fair value of plan assets	$ 0
Pension liabilities (assets)	$ 1,500	$ 1,200
Pension Plan \| German Pension Plan \| Maximum [Member]
Employee Benefit Plans
Period of historical performance achieved	20 years
Pension Plan \| German Pension Plan \| Minimum [Member]
Employee Benefit Plans
Period of historical performance achieved	10 years
Pension Plan \| Norway Pension Plan
Employee Benefit Plans
Qualifying period for employees to be eligible for pension plan prior to threshold retirement date	3 years
Number of new employees registered under plan \| employee	0
Pension liabilities (assets)	$ (1,000)	$ (500)
Weighted average expected long-term rate of return on plan assets	4.45%	4.15%

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Accrued Liabilities

Schedule of accrued liabilities


	December 31,
(dollars in thousands)	2023		2022
Accrued taxes (exclusive of income taxes)	$	5,892	$	10,691
Accrued employee related expenses		3,883		377
Accrued legal reserve for pending litigation		3,097		3,977
Accrued professional and legal fees		4,171		3,006
Accrued postage and shipping		2,635		1,980
Accrued facility related expenses		797		421
Other accruals		4,267		4,272
Total accrued liabilities	$	24,742	$	24,724

Income Taxes - Unrecognized tax benefits (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Unrecognized tax benefits
Unrecognized tax benefits, beginning balance	$ 0
Gross increases-tax positions in prior period	684
Unrecognized tax benefits, ending balance	$ 684

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2023

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

6.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	December 31,
(dollars in thousands)	2023		2022
Prepaid postage	$	1,924	$	2,048
Government receivables		1,600		3,496
Advance to suppliers		620		493
Prepaid maintenance		589		390
Deposits		492		340
Deferred stock issuance costs		—		478
Other prepaids		2,202		1,528
Total prepaid expenses and other current assets	$	7,427	$	8,773

Leases

12 Months Ended

Dec. 31, 2023

Leases

Lease

7.Leases

The Company leases numerous facilities in Europe. Our facilities house general offices, sales offices, service locations, and production facilities. Substantially all of our operations facilities are leased under long-term leases with varying expiration dates, except for the 2 owned locations. The Company regularly obtains various machinery, equipment, vehicles and furniture on leases. The machinery and equipment leases mainly include leasing of computers, servers, other IT equipment, mailing system, production equipment, generators, office equipment, printers, copiers and miscellaneous warehouse equipment.

Our ROU assets and lease liabilities as of December 31, 2023 and 2022 recorded on the consolidated balance sheets are as follows:


	December 31,
Consolidated balance sheets location (dollars in thousands)	2023		2022
Operating Lease
Operating lease right-of-use assets, net	$	6,865	$	5,848
Current portion of operating lease liabilities		1,941		1,796
Operating lease liabilities, net of current position		5,065		3,963
Finance Lease
Finance lease right-of-use assets, net (included in Property, plant and equipment, net)		694		1,345
Current portion of finance lease liabilities		638		757
Finance lease liabilities, net of current portion		23		658

Supplemental consolidated balance sheet information related to leases is as follows:


	December 31,
	2023		2022
Weighted-average remaining lease term
Operating Leases	3.47		4.16
Finance leases	0.71		1.38

Weighted-average discount rate
Operating Leases	13.5	%	8.5	%
Finance leases	6.9	%	8.0	%

The interest on financing lease liabilities was $0.1 million for each of the years ended December 31, 2023 and 2022, respectively. The amortization expense on finance lease ROU assets was $0.1 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively.

Maturities of finance and operating lease liabilities based on lease term for the next five years are as follows:


	Finance		Operating
(dollars in thousands)	Leases		Leases
2024	$	691	$	2,733
2025		15		2,433
2026		—		1,854
2027		—		1,621
2028		—		126
Total lease payments		706		8,767
Less: Imputed interest		(45)		(1,761)
Present value of lease liabilities	$	661	$	7,006

Combined rental expense for all operating leases was $6.1 million and $5.4 million for the years ended December 31, 2023 and 2022, respectively.

The following table summarizes the cash paid and related right-of-use operating finance or operating lease recognized for the years ended December 31, 2023 and 2022.


(dollars in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,166	$	4,347
Financing cash flows from finance leases		786		1,021
Right-of-use lease assets obtained in the exchange for lease liabilities:
Operating leases	$	4,786	$	34
Finance leases		—		104

Pay vs Performance Disclosure - USD ($) $ in Thousands	1 Months Ended	11 Months Ended	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Nov. 29, 2023	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 2,073	$ (13,120)	$ (11,047)	$ (7,929)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Fair Value Measurement

12 Months Ended

Dec. 31, 2023

Fair Value Measurement

Fair Value Measurement

15.Fair Value Measurement

Fair Value of Financial Instruments

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of December 31, 2023 and 2022, due to the relative short maturity of these instruments. The fair values of the Company’s loans and receivables under the factoring arrangement entered into by subsidiaries of the Company are equal to the carrying values. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value.

As of December 31, 2023, the Company determined the fair value of Private Warrants’ liability as less than $0.1 million, included in the other long-term liabilities in the consolidated balance sheets under Level 3 fair value measurement using the Black-Scholes option pricing model.

The significant unobservable inputs used in the fair value of the Private Warrants liability are assumptions related to the inputs of exercise price, fair value of the underlying common stock, risk-free interest rate, expected term, expected volatility, and expected dividend yield. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information would have resulted in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the fair value.

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3:

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Basis of Presentation and Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2023 segment
Basis of Presentation and Summary of Significant Accounting Policies
Number of operating segments	2

Related Parties - components of Related party expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Total related party expense	$ 4,683	$ 8,309
Operating Cost and Expense, Related Party, Type [Extensible Enumeration]	Related Party [Member]	Related Party [Member]
Related Party [Member]
Related Party Transaction [Line Items]
Shared service expenses and general corporate expenses	$ 3,515	$ 4,051
Royalty Expense	631	631
Management Fee	537	3,627
Total related party expense	$ 4,683	$ 8,309

Leases - Maturities of finance and operating lease liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Finance leases
2024	$ 691
2025	15
Total lease payments	706
Less: Imputed interest	(45)
Present value of lease liabilities	661
Operating leases
2024	2,733
2025	2,433
2026	1,854
2027	1,621
2028	126
Total lease payments	8,767
Less: Imputed interest	(1,761)
Present value of lease liabilities	7,006
Operating leases, rent expense	$ 6,100	$ 5,400

Restructuring

12 Months Ended

Dec. 31, 2023

Restructuring

Restructuring

18.Restructuring

The Company periodically takes actions to improve operating efficiencies, typically in connection with rationalizing the cost structure of the Company. The Company’s footprint and headcount reductions and organizational integration actions relate to discrete, unique restructuring events, primarily reflected in approved plans for reductions in force.

In the fourth quarter of 2023, the Company’s management approved a restructuring plan to realign the Company’s business and strategic priorities by rightsizing its workforce in certain regions.

The Company’s restructuring activity and balance of the restructuring liability is as follows:


	December 31,
(dollars in thousands)	2023		2022
Balance at January 1	$	2,036	$	4,237
Restructuring charges		4,484		267
Payment of benefits		(1,066)		(2,468)
Balance at December 31,	$	5,454	$	2,036

As of December 31, 2023 and 2022, the current portion of the restructuring liability was $5.5 million and $2.0 million respectively, and was included in accrued compensation and benefits in the consolidated balance sheets.

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Measurement

Schedule of beginning and ending balances of net assets and liabilities classified as Level 3

The following table reconciles the beginning and ending balances of net assets and liabilities classified as Level 3:

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment, Net.

Schedule of property, plant and equipment, net


	Expected Useful Lives	December 31,
(dollars in thousands)	(in Years)	2023		2022
Buildings and improvements	7 – 40	$	9,115	$	8,788
Leasehold improvements	Shorter of life of improvement or lease term		709		967
Machinery and equipment	5 – 15		8,256		6,986
Computer equipment and software	3 – 8		26,763		29,870
Furniture and Fixtures	5 – 15		7,766		7,805
Finance lease right-of use assets	Shorter of life of the asset or lease term		4,380		4,833
			56,989		59,249
Less: Accumulated depreciation and amortization			(42,990)		(44,629)
Total property, plant and equipment, net		$	13,999	$	14,620

Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt

Schedule of debt instruments outstanding


	December 31,
(dollars in thousands)	2023		2022
Term loan	$	3,785	$	4,489
Revolvers		12,767		10,852
Secured borrowings under Securitization Facility		74		4,075
Total debt		16,626		19,416
Less: Current portion of long-term debt		3,863		4,970
Long-term debt, net of current maturities	$	12,763	$	14,446

Schedule of maturities of long-term debt


(dollars in thousands)	Maturity
2024	$	3,863
2025		11,605
2026		178
2027		980
Total debt		16,626
Less: Unamortized discount and debt issuance costs		55
Total maturities of long-term debt	$	16,571

Segment Information (Details) $ in Thousands	12 Months Ended
Segment Information (Details) $ in Thousands	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Segment Information
Number of segments \| segment	2
Segment profit	$ 39,038	$ 43,705
Selling, general and administrative expenses (exclusive of depreciation and amortization)	34,683	32,956
Related party expense	$ 4,683	$ 8,309
Operating Cost and Expense, Related Party, Type [Extensible Enumeration]	Related Party	Related Party
Depreciation and amortization	$ 3,851	$ 4,390
Foreign exchange losses, net	593	1,184
Changes in fair value of warrant liability	(597)
Other (income) expense, net	(929)	(804)
Net loss before income taxes	(10,441)	(5,367)
Related and Nonrelated Part
Segment Information
Revenue, net (including related party revenue)	166,570	180,492
Cost of revenue (including related party cost of revenue, exclusive of depreciation and amortization)	127,532	136,787
Related Party
Segment Information
Revenue, net (including related party revenue)	200	100
Cost of revenue (including related party cost of revenue, exclusive of depreciation and amortization)	76	511
Related party expense	4,683	8,309
Interest expense (income), net	1,971	(25)
Non-related party
Segment Information
Cost of revenue (including related party cost of revenue, exclusive of depreciation and amortization)	127,456	136,276
Interest expense (income), net	5,224	3,062
Operating segment \| Bills & Payments
Segment Information
Segment profit	14,057	22,561
Operating segment \| Bills & Payments \| Related and Nonrelated Part
Segment Information
Revenue, net (including related party revenue)	121,851	136,858
Cost of revenue (including related party cost of revenue, exclusive of depreciation and amortization)	107,794	114,297
Operating segment \| Technology
Segment Information
Segment profit	24,981	21,144
Operating segment \| Technology \| Related and Nonrelated Part
Segment Information
Revenue, net (including related party revenue)	44,719	43,634
Cost of revenue (including related party cost of revenue, exclusive of depreciation and amortization)	$ 19,738	$ 22,490

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment, Net.

Property, Plant and equipment, Net

8.Property, Plant and Equipment, Net

Property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation, and amortization, and consist of the following:


	Expected Useful Lives	December 31,
(dollars in thousands)	(in Years)	2023		2022
Buildings and improvements	7 – 40	$	9,115	$	8,788
Leasehold improvements	Shorter of life of improvement or lease term		709		967
Machinery and equipment	5 – 15		8,256		6,986
Computer equipment and software	3 – 8		26,763		29,870
Furniture and Fixtures	5 – 15		7,766		7,805
Finance lease right-of use assets	Shorter of life of the asset or lease term		4,380		4,833
			56,989		59,249
Less: Accumulated depreciation and amortization			(42,990)		(44,629)
Total property, plant and equipment, net		$	13,999	$	14,620

Depreciation expense related to property, plant and equipment was $3.5 million and $3.7 million for the years ended December 31, 2023 and 2022, respectively.