BTRS Holdings Inc. - Quarter Report: 2020 March (Form 10-Q)

Delaware		83-3780685
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one warrant		SMMCU		The Nasdaq Stock Market LLC
Shares of Class A common stock		SMMC		The Nasdaq Stock Market LLC
Warrants		SMMCW		The Nasdaq Stock Market LLC

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

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		Page
Part I. Financial Information		1
	Item 1. Financial Statements	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations (Unaudited)	2
	Condensed Statements of Changes in Stockholders’ Equity (Unaudited)	3
	Condensed Statements of Cash Flows (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	17
	Item 4. Controls and Procedures	17
Part II. Other Information		17
	Item 1. Legal Proceedings	17
	Item 1A. Risk Factors	17
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
	Item 3. Defaults Upon Senior Securities	18
	Item 4. Mine Safety Disclosures	18
	Item 5. Other Information	18
	Item 6. Exhibits	18
Part III. Signatures		19

		March 31, 2020				December 31, 2019
		(unaudited)
ASSETS
Current assets
Cash		$	1,539,161			$	1,606,261
Prepaid income taxes			—				41,921
Prepaid expenses			158,160				102,712
Total Current Assets			1,697,321				1,750,894
Marketable securities held in Trust Account			252,418,006				251,865,941
TOTAL ASSETS		$	254,115,327			$	253,616,835
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accrued expenses		$	365,691			$	366,561
Income taxes payable			71,748				—
			437,439				366,651
Deferred underwriting fee payable			7,970,375				7,970,375
Total Liabilities			8,407,814				8,336,936
Commitments (see Note 6)
Common stock subject to possible redemption, 23,851,672 and 23,861,949 shares at redemption value at March 31, 2020 and December 31, 2019, respectively			240,707,504				240,279,893
Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding			—				—
Class A Common stock, $0.0001 par value; 200,000,000 shares authorized; 1,148,328 and 1,138,051 shares issued and outstanding (excluding 23,851,672 and 23,861,949 shares subject to possible redemption) at March 31, 2020 and December 31, 2019, respectively.			115				114
Class B Common stock, $0.0001 par value; 20,000,000 shares authorized; 6,250,000 shares issued and outstanding at March 31, 2020 and December 31, 2019			625				625
Additional paid-in capital			3,168,168				3,595,780
Retained earnings			1,831,101				1,403,487
Total Stockholders’ Equity			5,000,009				5,000,006
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	254,115,327			$	253,616,835

		Three Months Ended March 31,				For the Period from February 28, 2019 (inception) through March 31,
		2020				2019
Operating and formation costs		$	245,851			$	1,000
Loss from operations			(245,851	)			(1,000	)
Other income:
Interest income on marketable securities held in Trust Account			787,134				—
Income (loss) before provision for income taxes			541,283				(1,000	)
Provision for income taxes			(113,669	)			—
Net income (loss)		$	427,614			$	(1,000	)
Weighted average shares outstanding, basic and diluted (1)			7,388,051				—
Basic and diluted net loss per common share (2)		$	(0.02	)		$	(0.00	)

		Class A Common Stock								Class B Common Stock								Additional Paid-in				Retained				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Earnings				Equity
Balance – January 1, 2020			1,138,051			$	114				6,250,000			$	625			$	3,595,780			$	1,403,487			$	5,000,006
Change in value of common stock subject to possible redemption			10,277				1				—				—				(427,612	)			—				(427,611	)
Net income			—				—				—				—				—				427,614				427,614
Balance – March 31, 2020			1,148,328			$	115				6,250,000			$	625			$	3,168,168			$	1,831,101			$	5,000,009

		Class A Common Stock								Class B Common Stock								Additional Paid-in				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Deficit
Balance – February 28, 2019 (inception)			—			$	—				—			$	—			$	—			$	—			$	—
Net loss											—				—				—				(1,000	)			(1,000	)
Balance – March 31, 2019			—			$	—				—			$	—			$	—			$	(1,000	)		$	(1,000	)

		Three Months Ended March 31,				For the Period from February 28, 2019 (Inception) Through March 31,
		2020				2019
Cash Flows from Operating Activities:
Net income (loss)		$	427,614			$	(1,000	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account			(787,134	)			—
Changes in operating assets and liabilities:
Prepaid expenses			(55,448	)			—
Prepaid income taxes			41,921				—
Accrued expenses			(870	)			1,000
Income taxes payable			71,748				—
Net cash used in operating activities			(302,169	)			—
Cash Flows from Investing Activities:
Cash withdrawn from Trust Account to pay taxes and regulatory compliance costs			235,069				—
Net cash provided by investing activities			235,069				—
Net Change in Cash			(67,100	)			—
Cash – Beginning			1,606,261				—
Cash – Ending		$	1,539,161			$	—
Non-cash investing and financing activities:
Change in value of common stock subject to possible redemption		$	427,611			$	—

		Three Months Ended March 31, 2020				For the Period from February 28, 2019 (inception) Through March 31, 2019
Net income (loss)		$	427,614			$	(1,000	)
Less: Income attributable to common stock subject to possible redemption			(594,848	)			—
Adjusted net loss		$	(167,234	)		$	(1,000	)
Weighted average shares outstanding, basic and diluted			7,388,051				—
Basic and diluted net loss per common share		$	(0.02	)		$	(0.00	)

•

in whole and not in part;

•

at a price of $0.01 per warrant;

•

upon a minimum of 30 days’ prior written notice of redemption; and

•

if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

Description		Level				March 31, 2020				December 31, 2019
Assets:
Marketable securities held in Trust Account			1			$	252,418,006			$	251,865,941

•

may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;

•

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

•

could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

•

may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

•

may adversely affect prevailing market prices for our Class A common stock and/or warrants.

•

default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;

•

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

•

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

•

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

•

our inability to pay dividends on our common stock;

•

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

•

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

•

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Item 1.

Legal Proceedings.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3.

Defaults Upon Senior Securities.

Item 4.

Mine Safety Disclosures.

Item 5.

Other Information.

Item 6.

Exhibits

Exhibit No.		Description of Exhibits
31.1		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	SOUTH MOUNTAIN MERGER CORP.
Date: May 8, 2020	By:	/s/ Charles B. Bernicker
	Name:	Charles B. Bernicker
	Title:	Chief Executive Officer
		(Principal Executive Officer)
Date: May 8, 2020	By:	/s/ Nicholas Dermatas
	Name:	Nicholas Dermatas
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

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