alk-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2021

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

For the transition period from ___________ to ___________

Commission File Number 001-40321

ALKAMI TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		45-3060776
State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.

5601 Granite Parkway,	Suite 120
Plano,	TX	75204
Address of Principal Executive Offices		Zip Code

(877) 725-5264

Registrant’s Telephone Number, Including Area Code

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	ALKT	The Nasdaq Stock Market LLC

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

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

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


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

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

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

The number of shares of registrant’s common stock outstanding as of April 30, 2021 was 85,936,693.

Table of Contents


TABLE OF CONTENTS


PART I ‑ FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Operations	2
	Unaudited Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28

PART II ‑ OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30

Signatures		31

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(UNAUDITED)


	March 31,		December 31,
	2021		2020
Assets
Current assets
Cash and cash equivalents	$	162,075	$	166,790
Accounts receivable, net	14,614		14,103
Deferred implementation costs, current	5,063		4,745
Prepaid expenses and other current assets	9,742		7,598
Total current assets	191,494		193,236
Property and equipment, net	10,308		10,461
Deferred implementation costs, net of current portion	15,096		14,858
Intangibles, net	8,057		8,266
Goodwill	16,542		16,218
Other assets	6,522		6,127
Total assets	$	248,019	$	249,166
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Current liabilities
Current portion of long-term debt	$	625	$	313
Accounts payable	4,725		360
Accrued liabilities	16,125		13,099
Deferred rent and tenant allowance, current	661		596
Deferred revenues, current portion	6,715		6,116
Total current liabilities	28,851		20,484
Long-term debt, net	24,267		24,566
Warrant liability	4,336		2,692
Deferred revenues, net of current portion	13,835		14,424
Deferred rent and tenant allowance, net of current portion	5,726		5,867
Other non-current liabilities	1,393		1,393
Total liabilities	78,408		69,426
Commitments and contingencies (Note 13)
Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock, $0.001 par, 72,799,602 shares authorized and 72,225,916 and 72,225,916 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	443,540		443,263
Stockholders’ Equity (Deficit)
Common stock, $0.001 par, 101,671,156 shares authorized and 6,755,179 and 4,909,529 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	7		5
Additional paid-in capital	3,974		—
Accumulated deficit	(277,910)		(263,528)
Total stockholders’ equity (deficit)	(273,929)		(263,523)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	$	248,019	$	249,166

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ALKAMI TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(UNAUDITED)


	Three months ended March 31,
		2021		2020
Revenues		$	33,262	$	23,210
Cost of revenues		15,497		11,902
Gross profit		17,765		11,308
Operating expenses:
Research and development		10,913		9,689
Sales and marketing		5,406		4,640
General and administrative		10,385		7,158
Total operating expenses		26,704		21,487
Loss from operations		(8,939)		(10,179)
Non-operating income (expense):
Interest income		14		29
Interest expense		(310)		(104)
Loss on financial instruments		(1,644)		(1)
Loss before income taxes		(10,879)		(10,255)
Provision for income taxes		—		—
Net loss		$	(10,879)	$	(10,255)
Less: cumulative dividends and adjustments to redeemable convertible preferred stock		(277)		(277)

SEC Form 10-Q filed by Alkami Technology Inc.