UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K/A

(Amendment No. 1)

 

CURRENT REPORT

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

 

Date of Report (Date of earliest event reported): May 6, 2020

 

Benefytt Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-35811   46-1282634

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

3450 Buschwood Park Dr., Suite 200

Tampa, Florida

  33618
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (813) 397-1187

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A Common Stock, $0.001 par value   BFYT   Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company [  ]

 

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

 

 

 

   
 

 

EXPLANATORY NOTE

 

On May 6, 2020, Benefytt Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2020 (the “Earnings Release”) and furnished the required related Current Report on Form 8-K (the “Report”) to the Securities and Exchange Commission on May 7, 2020.

 

On May 7, 2020, the Company executed a Settlement Term Sheet for the previously reported legal action captioned In re Health Insurance Innovations Securities Litigation, Case No. 8:17-cv-02186-TPB-SPF (M.D. Fla.) (the “Legal Action”), whereunder the parties reached an agreement in principle to resolve the Legal Action without any admission of liability or fault on the part of the Company or any of its current or former personnel for a settlement payment of $2.8 million to be funded by the Company’s insurers. This resolution of the Legal Action, which was reported in the Form 10-Q filed by the Company on May 11, 2020 (the “Form 10-Q”), remains subject both to formal documentation of the terms of the parties’ agreement and to Court approval.

 

As a result of the foregoing agreement in principle to resolve the Legal Action, the Company revised its condensed consolidated balance sheets and condensed consolidated statements of cash flows previously included in the Earnings Release and Report to reflect the settlement, which was recorded within accounts payable and accrued expenses, and the related insurance recoverable was recorded in accounts receivable, net, prepaid expenses and other current assets on the condensed consolidated balance sheets and includes their related changes within the condensed consolidated statement of cash flows. The foregoing revision was reflected in the financial statements included in the Form 10-Q. No other changes were made to the Earnings Release, the Report or the financial statements included therein.

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 6, 2020, the Company issued a press release reporting its fiscal 2020 first quarter financial results. On May 11, 2020, the Company revised its Condensed Consolidated Balance Sheets (Unaudited) and Condensed Consolidated Statements of Cash Flows (Unaudited) originally issued on May 6, 2020, as described in the Explanatory Note above. A copy of the Company’s revised condensed consolidated financial statements for the three months ended March 31, 2020 is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by this reference.

 

The information furnished in this Item 2.02, including Exhibit 99.1 is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. This information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
99.1   Revised Condensed Consolidated Financial Statements

 

   
 

 

SIGNATURES

 

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

 

  BENEFYTT TECHNOLOGIES, INC.
   
  By: /s/ Erik M. Helding
  Name: Erik M. Helding
  Title: Chief Financial Officer

 

Date: May 13, 2020

 

   

 

 

Exhibit 99.1

 

BENEFYTT TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

($ in thousands, except share and per share data)

 

   March 31, 2020   December 31, 2019 
   (unaudited)     
Assets          
Current assets:          
Cash and cash equivalents  $5,051   $3,771 
Restricted cash   16,030    17,788 
Accounts receivable, net, prepaid expenses and other current assets   7,361    2,911 
Income taxes receivable   23,018    18,210 
Advanced commissions, net   40,524    45,250 
Contract asset   172,554    184,474 
Total current assets   264,538    272,404 
Long-term contract asset   207,675    209,239 
Property and equipment, net   5,494    5,415 
Deferred tax asset   645     
Right-of-use assets   16,568    496 
Goodwill   94,814    135,182 
Intangible assets, net   25,473    28,963 
Other assets   2,623    159 
Total assets  $617,830   $651,858 
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable and accrued expenses  $45,568   $51,477 
Commissions payable   92,833    97,785 
Contingent consideration, current   1,750     
Current portion of long-term debt, net   9,488    10,684 
Operating lease liabilities, current   1,466    237 
Other current liabilities   296    557 
Total current liabilities   151,401    160,740 
Commissions payable, long-term   79,287    82,369 
Contingent consideration, long-term   66,302    65,171 
Debt, net, long-term   183,470    167,947 
Due to member   34,142    29,121 
Deferred tax liability, net       5,722 
Operating lease liabilities, long-term   14,965    224 
Other liabilities   330    590 
Total liabilities   529,897    511,884 
Commitments and contingencies (Note 14)          
Stockholders’ equity:          
Class A common stock (par value $0.001 per share, 100,000,000 shares authorized; 17,119,217 and 16,219,217 shares issued as of March 31, 2020 and December 31, 2019, respectively; 13,203,527 and 12,273,630 shares outstanding as of March 31, 2020 and December 31, 2019, respectively)   17    16 
Class B common stock (par value $0.001 per share, 20,000,000 shares authorized; 1,016,667 and 1,916,667 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)   1    2 
Preferred stock (par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)        
Additional paid-in capital   131,943    118,465 
Treasury stock, at cost (3,915,690 and 3,945,587 shares as of March 31, 2020 and December 31, 2019, respectively)   (125,643)   (127,400)
Retained earnings   66,152    110,418 
Total Benefytt Technologies, Inc. stockholders’ equity   72,470    101,501 
Noncontrolling interests   15,463    38,473 
Total stockholders’ equity   87,933    139,974 
Total liabilities and stockholders’ equity  $617,830   $651,858 

 

 
 

 

BENEFYTT TECHNOLOGIES, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

($ in thousands)

 

   Three Months Ended March 31, 
   2020   2019 
Operating activities:          
Net (loss) income  $(49,815)  $2,182 
Adjustments to reconcile net (loss) income to net cash used in operating activities:          
Stock-based compensation   2,627    1,816 
Fair value adjustment to contingent acquisition consideration   2,881     
Loss on disposal of assets   73     
Provision for allowance for doubtful accounts   116    13 
Impairment of assets   41,076     
Depreciation and amortization   4,345    1,132 
Deferred financing costs   202     
Deferred income taxes   (4,838)   191 
Changes in operating assets and liabilities:          
(Increase) decrease in accounts receivable, prepaid expenses and other assets   (6,914)   275 
Decrease (increase) in advanced commissions   4,610    (196)
Increase in income taxes receivable   (4,808)    
Increase in right-of-use asset   (16,072)   (639)
Decrease (increase) in contract asset   12,776    (13,327)
Increase in lease liability   15,893    538 
Decrease in accounts payable, accrued expenses and other liabilities   (5,353)   (6,568)
(Decrease) increase in commission payable   (8,034)   6,387 
Increase in income taxes payable, net       2,452 
Net cash used in operating activities   (11,235)   (5,744)
Investing activities:          
Business acquisition: release of hold-back   (1,000)    
Capitalized internal-use software and website development costs   (501)   (315)
Purchases of property and equipment   (429)   (109)
Net cash used in investing activities   (1,930)   (424)
Financing activities:          
Proceeds from borrowings under credit agreement   18,000    50,000 
Payments on borrowings under credit agreement   (3,875)    
Payments related to tax withholding for share-based compensation   (1,526)   (918)
Purchases of Class A common stock pursuant to share repurchase plan       (45,272)
Contributions (distributions)   88    (677)
Net cash provided by financing activities   12,687    3,133 
Net decrease in cash and cash equivalents, and restricted cash   (478)   (3,035)
Cash and cash equivalents, and restricted cash at beginning of period   21,559    25,999 
Cash and cash equivalents, and restricted cash at end of period  $21,081   $22,964