EX-99.1 2 a2023_q1xnuveicorporationx.htm EX-99.1 Document


EXHIBIT 99.1
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Condensed Interim Consolidated Financial Statements
Nuvei Corporation
(Unaudited)
For the three months ended March 31, 2023 and 2022
(in thousands of US dollars)



Table of Contents
Pages
Condensed Interim Consolidated Financial Statements
Notes to Condensed Interim Consolidated Financial Statements
1 Reporting entity
2 Basis of preparation and consolidation
3 Significant accounting policies and new accounting standards
4 Business combinations
5 Trade and other receivables
6 Trade and other payables
7 Loans and borrowings
8 Share capital
9 Revenue and expenses by nature
10 Net finance cost
11 Share-based payment arrangements
12 Net income (loss) per share
13 Determination of fair values
14 Related party transactions
15 Supplementary cash flow disclosure
16 Contingencies




Nuvei Corporation
Consolidated Statements of Financial Position
(Unaudited)
(in thousands of US dollars)
Notes
March 31,
2023		December 31,
2022
$$
Assets





Current assets


Cash and cash equivalents

132,829 751,686 
Trade and other receivables588,396 61,228 
Inventory2,543 2,117 
Prepaid expenses

22,492 12,254 
Income taxes receivable
 
2,394 3,126 
Current portion of advances to third parties146 579 
Current portion of contract assets

1,418 1,215 



Total current assets before segregated funds

250,218 832,205 
Segregated funds

872,476 823,666 


Total current assets

1,122,694 1,655,871 



Non-current assets


Advances to third parties— 1,721 
Property and equipment37,719 31,881 
Intangible assets41,364,850 694,995 
Goodwill41,979,436 1,114,593 
Deferred tax assets41,224 17,172 
Contract assets

750 997 
Processor and other deposits

5,185 4,757 
Other non-current assets
13
28,560 2,682 



Total Assets

4,540,418 3,524,669 
3

Nuvei Corporation
Consolidated Statements of Financial Position
(Unaudited)
(in thousands of US dollars)
Notes
March 31,
2023		December 31,
2022
$$
Liabilities





Current liabilities


Trade and other payables6166,260 125,533 
Income taxes payable
 
27,540 16,864 
Current portion of loans and borrowings740,755 8,652 
Other current liabilities6,420 4,224 
Total current liabilities before due to merchants

240,975 155,273 
Due to merchants

872,476 823,666 
Total current liabilities

1,113,451 978,939 
Non-current liabilities


Loans and borrowings71,289,162 502,102 
Deferred tax liabilities4166,972 61,704 
Other non-current liabilities2,428 2,434 
Total Liabilities

2,572,013 1,545,179 



Equity





Equity attributable to shareholders


Share capital81,948,196 1,972,592 
Contributed surplus

241,070 202,435 
Deficit

(198,748)(166,877)
Accumulated other comprehensive loss

(34,361)(39,419)


1,956,157 1,968,731 
Non-controlling interest
12,248 10,759 
Total Equity

1,968,405 1,979,490 


Total Liabilities and Equity

4,540,418 3,524,669 
Contingencies
16
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
4

Nuvei Corporation
Consolidated Statements of Profit or Loss and Comprehensive Income or Loss
(Unaudited)
For the three months ended March 31
(in thousands of US dollars, except for per share amounts)

20232022
Notes$$
Revenue9256,498 214,544 
Cost of revenue954,596 46,916 
Gross profit201,902 167,628 
Selling, general and administrative expenses9194,618 146,812 
Operating profit7,284 20,816 
Finance income10(5,375)(631)
Finance cost1018,468 7,741 
Net finance cost13,093 7,110 
Loss (gain) on foreign currency exchange(1,398)580 
Income (loss) before income tax(4,411)13,126 
Income tax expense3,878 8,612 
Net income (loss)(8,289)4,514 
Other comprehensive loss, net of tax
Item that may be reclassified subsequently to profit and loss
Foreign operations – foreign currency translation differences5,058 (4,862)
Comprehensive loss(3,231)(348)
Net income (loss) attributable to:
Common shareholders of the Company(9,778)3,003 
Non-controlling interest1,489 1,511 
(8,289)4,514 
Comprehensive loss attributable to:
Common shareholders of the Company(4,720)(1,859)
Non-controlling interest1,489 1,511 
(3,231)(348)
Net income (loss) per share12
Net income (loss) per share attributable to common shareholders of the Company
Basic(0.07)0.02 
Diluted(0.07)0.02 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
5

Nuvei Corporation
Consolidated Statements of Cash Flows
(Unaudited)
For the three months ended March 31
(in thousands of US dollars)
20232022
Notes$$
Cash flow from operating activities
Net income (loss) (8,289)4,514 
Adjustments for:
Depreciation of property and equipment3,110 1,793 
Amortization of intangible assets24,546 24,650 
Amortization of contract assets368 427 
Share-based payments
9
35,573 37,187 
Net finance cost1013,093 7,110 
Loss (gain) on foreign currency exchange(1,398)580 
Income tax expense3,878 8,612 
Changes in non-cash working capital items15(9,126)(13,934)
Interest paid(9,275)(4,266)
Interest received6,868316 
Income taxes paid - net(2,566)(1,255)

56,782 65,734 
Cash flow used in investing activities
Business acquisitions, net of cash acquired
4
(1,378,763)— 
Acquisition of property and equipment(2,816)(1,083)
Acquisition of intangible assets(9,863)(7,978)
Acquisition of distributor commissions(20,224)— 
Increase in other non-current assets13(25,925)(1,080)
Net decrease in advances to third parties135 993 

(1,437,456)(9,148)
Cash flow from (used in) financing activities
Shares repurchased and cancelled
8
(56,042)(74,754)
Transaction costs from issuance of shares— (15)
Proceeds from exercise of stock options82,961 742 
Repayment of loans and borrowings7(21,280)(1,280)
Proceeds from loans and borrowings7852,000 — 
Transaction costs related to loans and borrowings7(14,650)— 
Payment of lease liabilities(1,215)(770)
Dividend paid by subsidiary to non-controlling interest— (260)

761,774 (76,337)
Effect of movements in exchange rates on cash43 6,213 
Net decrease in cash and cash equivalents(618,857)(13,538)
Cash and cash equivalents – Beginning of period751,686 748,576 
Cash and cash equivalents – End of period132,829 735,038 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
6

Nuvei Corporation
Consolidated Statements of Changes in Equity
(Unaudited)
For the three months ended March 31
(in thousands of US dollars)
Attributable to shareholders of the CompanyNon-
Controlling interest		Total equity
NotesShare
capital		Contributed
surplus		DeficitAccumulated
other
comprehensive
 loss
$$$$$$
Balance as at January 1, 20222,057,105 69,943 (108,749)(8,561)12,102 2,021,840 

Contributions and distributions
Exercise of equity-settled share-based payments890 (148)— — — 742 
Equity-settled share-based payments— 37,187 — — — 37,187 
Tax effect - equity-settled share-based payments— 886 — — — 886 
Shares repurchased and cancelled(29,094)— (43,290)— — (72,384)
Effect of share repurchase liability(15,169)— (28,754)— — (43,923)
Dividend paid by subsidiary to non-controlling interest— — — — (260)(260)
Effect of purchase of non-controlling interest, net of tax— — (33,445)— (6,306)(39,751)
Net income and comprehensive loss

— — 3,003 (4,862)1,511 (348)
Balance as at March 31, 2022

2,013,732 107,868 (211,235)(13,423)7,047 1,903,989 

Balance as at January 1, 20231,972,592 202,435 (166,877)(39,419)10,759 1,979,490 

Contributions and distributions
Exercise of equity-settled share-based payments
8, 11
8,982 (6,021)— — — 2,961 
Equity-settled share-based payments
4, 11
— 42,618 — — — 42,618 
Tax effect - equity-settled share-based payments— 2,038 — — — 2,038 
Effect of share repurchase liability
8
(33,378)— (22,093)— — (55,471)
Net loss and comprehensive loss

— — (9,778)5,058 1,489 (3,231)
Balance as at March 31, 2023

1,948,196 241,070 (198,748)(34,361)12,248 1,968,405 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
7

Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)

1. Reporting entity
Nuvei Corporation (“Nuvei” or the “Company”) is a global payment technology provider to businesses across North America, Europe, Middle East and Africa, Latin America and Asia Pacific and is domiciled in Canada with its registered office located at 1100 René-Lévesque Blvd., 9th floor, Montreal, Quebec, Canada. Nuvei is the ultimate parent of the group and was incorporated on September 1, 2017 under the Canada Business Corporations Act (“CBCA”).
The Company's Subordinate Voting Shares are listed on the Toronto Stock Exchange ("TSX") and on the Nasdaq Global Select Market ("Nasdaq") both under the symbol "NVEI".
2. Basis of preparation and consolidation
Statement of compliance
These Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). Certain information and disclosures have been omitted or condensed. The accounting policies and methods of computation described in the annual audited consolidated financial statements were applied consistently in the preparation of these condensed interim consolidated financial statements. Accordingly, these Condensed Interim Consolidated Financial Statements should be read together with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022.
The Condensed Interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 were authorized for issue by the Company’s Board of Directors on May 10, 2023.
Operating segment
The Company has one reportable segment for the provision of payment technology solutions to merchants and partners.
Seasonality of interim operations
The operations of the Company can be seasonal, and the results of operations for any interim period are not necessarily indicative of operations for the full year or any future period.
Estimates, judgments and assumptions
The preparation of these Condensed Interim Consolidated Financial Statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The significant estimates, judgments and assumptions made by management are the same as those applied and described in the Company's audited annual consolidated financial statements for the year ended December 31, 2022.
3. Significant accounting policies and new accounting standards
The accounting policies used in these interim financial statements are consistent with those applied by the Company in its December 31, 2022 audited annual consolidated financial statements.
8

Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
New accounting standards and interpretations adopted
There was no new accounting standards and interpretations adopted for the three months ended March 31, 2023.
New accounting standards and interpretations issued but not yet adopted
The IASB has issued new standards and amendments to existing standards which are applicable to the Company in future periods. There were no significant updates to the standards and interpretations issued but not yet adopted described in the December 31, 2022 annual audited consolidated financial statements.
4. Business combinations
Transactions for the three months ended March 31, 2023
Paya Holdings Inc.
On February 22, 2023, the Company acquired 100% of the shares of Paya Holdings Inc. ("Paya"), a leading U.S. provider of integrated payment and frictionless commerce solutions, for a total consideration of $1,398,480, comprised of $1,391,435 in cash and $7,045 of the portion of replacement share-based awards that was considered part of the consideration transferred. The cash consideration included the settlement by the Company of seller-related payments of $51,876 paid by Paya immediately prior to closing and thereby increased the calculated purchase price. The Company determined that the transaction met the definition of a business combination. Acquisition costs of $15,470 have been expensed during the three months ended March 31, 2023. For the period from the acquisition date to March 31, 2023, Paya contributed revenue of $30,286 and net income of $1,396. The net income includes the amortization of identifiable intangible assets acquired.
Assuming this business combination would have been completed on January 1, 2023, Paya would have contributed pro forma revenue of approximately $70,204 and pro forma net income of approximately $2,116 for the three months ended March 31, 2023. In determining these amounts, the Company assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2023. In order to align with the Company's presentation, Paya's revenue contribution amounts are presented net of interchange fees, which was not the case for a small portion of fees prior to its acquisition by the Company.
Paya is expected to become part of the Company's United States federal consolidated tax group. During the three months ended March 31, 2023, this resulted in the set-off of deferred tax assets of the Company with the deferred tax liabilities of Paya.
Other
On March 1, 2023, the Company acquired certain assets of a service provider. The Company determined that the transaction met the definition of a business combination. The total cash consideration for this acquisition was $10,000. Acquisition costs of $129 have been expensed during the three months ended March 31, 2023. For the period from the acquisition date to March 31, 2023, those assets contributed revenue of $136 and net loss of $368. The net loss includes the amortization of identifiable intangible assets acquired.
Assuming this business combination would have been completed on January 1, 2023, the Company estimates that those assets would have contributed pro forma revenue of $408 and pro forma net loss of $1,104 for the three months ended March 31, 2023. In determining these amounts, the Company has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2023.

9


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Preliminary Purchase Price Allocation
The following table summarizes the preliminary amounts of assets acquired and liabilities assumed at the acquisition date for acquisitions in the three months ended March 31, 2023:
Paya
$		Other
$		Total
$
Assets acquired
Cash22,672 — 22,672 
Segregated funds243,783 — 243,783 
Trade and other receivables23,555 — 23,555 
Inventory293 — 293 
Prepaid expenses3,808 — 3,808 
Property and equipment5,419 12 5,431 
Processor deposits385 — 385 
Intangible assets
Software3,131 — 3,131 
Trademarks16,607 — 16,607 
Technologies178,173 6,908 185,081 
Partner and merchant relationships455,364 — 455,364 
Goodwill1
858,717 3,193 861,910 
1,811,907 10,113 1,822,020 
Liabilities assumed
Trade and other payables(30,037)(113)(30,150)
Current portion of loans and borrowings(1,142)— (1,142)
Other current liabilities(2,842)— (2,842)
Due to merchants(243,783)— (243,783)
Income taxes payable(2,652)— (2,652)
Loans and borrowings(2,492)— (2,492)
Deferred tax liabilities(130,479)— (130,479)
(413,427)(113)(413,540)
Total consideration
Cash paid1,391,435 10,000 1,401,435 
Share-based payments (note 11)7,045 — 7,045 
1,398,480 10,000 1,408,480 
1 Goodwill mainly consists of future growth, assembled workforce and expected synergies, which were not recorded separately since they did not meet the recognition criteria for identifiable intangible assets. Goodwill arising from the Paya acquisition is not deductible for income tax purposes.
10


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
5. Trade and other receivables
March 31,
2023		December 31,
2022
$
$
Trade receivables62,272 36,298 
Due from processing banks19,054 19,133 
Other receivables7,070 5,797 
Total88,396 61,228 
6. Trade and other payables
Trade and other payables comprise the following:
March 31, 2023December 31, 2022
$$
Trade payables78,183 43,813 
Accrued bonuses and other compensation-related liabilities40,613 36,379 
Sales tax payable6,538 8,007 
Interest payable7,546 458 
Due to processors7,323 6,923 
Due to merchants not related to segregated funds16,290 20,076 
Other accrued liabilities9,767 9,877 

166,260 125,533 
11


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
7. Loans and borrowings
The terms and conditions of the Company’s loans and borrowings are as follows:
March 31,
2023		December 31,
2022
NotesFacilityCarrying
amount		FacilityCarrying
amount
$$$$
Amended and restated credit facility(a)
Term loan facilities503,012 497,515 504,292 498,199 
Revolving credit facility385,000 32,000 385,000 — 
New reducing revolving credit facility(b)800,000 784,574 — — 
Total credit facilities1,314,089 498,199 

Lease liabilities15,828 12,555 

1,329,917 510,754 
Current portion of loans and borrowings(40,755)(8,652)
Loans and borrowings1,289,162 502,102 
Loans and borrowings are presented net of unamortized transaction costs. Transaction costs relating to the issuance of loans and borrowings are amortized over the term of the debt using the effective interest rate method.
a)Amended and restated credit facility
The outstanding principal of the term loan is payable quarterly at an annual rate of 1.00% and the remaining balance is payable at maturity on September 28, 2025. The revolving facility matures on September 28, 2024. The Amended and restated credit facility is secured by all current and future assets of the Company and its existing and future subsidiaries.
i)Loans drawn in US dollars under the First Lien Credit facilities bear interest at the ABR1 plus 1.50% or the adjusted eurocurrency2 rate plus 2.50%. As at March 31, 2023, the outstanding Term loan facilities interest rate was 7.34% (December 31, 2022 – 6.89%).
ii)Loans drawn in Canadian dollars under the First Lien Credit facilities bear interest at the Canadian prime rate plus 1.50% or banker’s acceptance rate plus 2.50%. As at March 31, 2023 and December 31, 2022 there was no loan denominated in Canadian dollars.
iii)LIBOR is no longer available following the benchmark reform. After the quarter, LIBOR was replaced by the Term Secured Overnight Financing Rate (“SOFR”). For the term loan facilities, LIBOR for the interest computation was replaced by the sums of: a) Term SOFR; and b) 0.11% for interest period of one-month, 0.26% for interest period of three months or 0.43% for interest period of six months. For the revolving credit facility, LIBOR was replaced by the sums of: a) Term SOFR; and b) 0.10%.
1 The Alternate Base Rate is defined as a rate per annum equal to the higher of a) Federal funds effective rate + 0.5%; b) LIBOR plus 1%; c) Prime rate; and d) 1.50%.
2 The adjusted Eurocurrency rate is defined as an interest rate per annum equal to the greater of: a) the Eurocurrency rate multiplied by the Statutory Reserve rate and b) 0.50%.

12


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
b) New reducing revolving credit facility
On February 22, 2023, concurrent with the completion of the Paya acquisition (Note 4), the Company entered into a new reducing revolving credit facility in an amount of $800,000. Commencing on June 30, 2023, the commitments in respect of this facility will automatically be permanently reduced by $10 million on the last day of each fiscal quarter. The maturity date of this facility is September 28, 2025. Until the delivery of the Company's financial statements for the quarter ending September 30, 2023, borrowings under the new reducing revolving credit facility bear interest, at the Company's option, at either (a) Term SOFR (including a 0.10% credit spread adjustment) plus a margin of 3.00% or (b) the Alternate base rate1 plus a margin of 2.00%. Thereafter, borrowings under the new reducing revolving credit facility will bear interest, at the Company's option, at either (a) Term SOFR (including a 0.10% credit spread adjustment) plus a margin ranging from 2.5% to 3.25% or (b) the Alternate base rate1 plus a margin ranging from 1.50% to 2.25%, in each case, based on a first lien leverage ratio. As at March 31, 2023, the new reducing revolving credit facility interest rate was 7.80%.
The new reducing revolving credit facility is secured by all current and future assets of the Company and its existing and future subsidiaries. The continued availability of the new reducing revolving facility is subject to the Company's ability to maintain a total leverage ratio of less than or equal to 4.50 : 1.00 for the test period before September 30, 2023, and with the ratio decreasing by 0.25 on October 1, 2023 and every six months thereafter, until it reaches 3.50 : 1.00 on March 31, 2025. The total leverage ratio considers the Company's consolidated net debt, calculated as long-term debt less unrestricted cash, to consolidated adjusted EBITDA, calculated in accordance with the terms of the agreement. The Company must also maintain its interest coverage ratio above 2.50 : 1.00. The interest coverage ratio considers the Company's consolidated adjusted EBITDA, calculated in accordance with the terms of the agreement, to consolidated cash interest expense. The Company was in compliance with all applicable covenants as at March 31, 2023.

1 The Alternate Base Rate is defined as a rate per annum equal to the higher of a) Federal funds effective rate + 0.5%; b) Adjusted Term Secured Overnight Financing Rate (“SOFR”) effective plus 1.00%; (c) Prime Rate; and (d) 1.00%.
8. Share capital
On March 20, 2023, the Board approved a normal-course issuer bid ("NCIB") to purchase for cancellation a maximum of 5,556,604 Subordinate Voting Shares, representing approximately 10% of the Company’s Subordinate Voting Shares as at March 8, 2023. The Company is authorized to make purchases under the NCIB during the period from March 22, 2023 to March 21, 2024 in accordance with the requirements of the Toronto Stock Exchange ("TSX") and the Nasdaq and applicable securities laws. During the three months ended March 31, 2023, the Company repurchased and cancelled 1,350,000 Subordinate Voting Shares for a total consideration, including transaction costs, of $56,042.
The Company also issued 451,291 Subordinate Voting Shares for a cash consideration of $2,961 during the three months ended March 31, 2023 following the exercise of stock options and the settlement of Restricted Share Units ("RSUs").
There were 76,064,619 Multiple Voting Shares and 62,562,899 Subordinate Voting Shares outstanding as at March 31, 2023.
13


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Share repurchase liability
In March 2023, the Company entered into an automatic share purchase plan ("ASPP") with a third-party broker for the Company to allow for the purchase of Subordinate Voting Shares under the NCIB during the Company's blackout periods. Under this agreement, the broker was authorized to repurchase Subordinate Voting Shares, without consultation with the Company, subject to predefined share price and other limitations imposed by the Company and subject to rules and policies of the TSX and the Nasdaq and applicable securities laws, such as a daily purchase restriction. The Company recognized a share repurchase liability on that date. The fair value of the share repurchase liability was determined using the Company's quoted share price.
During the three months ended March 31, 2023, shares were repurchased and cancelled under the ASPP for a cash consideration of $56,042. The change in fair value of share repurchase liability during the three months ended March 31, 2023 was a loss of $571.
9. Revenue and expenses by nature
Three months ended
March 31

20232022
$$
Revenue
Merchant transaction and processing services revenue254,513 212,412 
Other revenue1,985 2,132 

256,498 214,544 
Cost of revenue
Processing cost53,494 45,854 
Cost of goods sold1,102 1,062 

54,596 46,916 
Selling, general and administrative expenses
Commissions38,299 27,798 
Employee compensation45,721 37,799 
Share-based payments35,573 37,187 
Depreciation and amortization27,656 26,443 
Professional fees28,665 7,650 
Transaction losses (recovery) 1,693 (1,393)
Other17,011 11,328 

194,618 146,812 
14


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
10. Net finance cost
Three months ended
March 31

20232022
$$
Finance income

Interest on advances to third parties and interest income(5,375)(631)

Finance cost
Interest on loans and borrowings (excluding lease liabilities)17,607 4,893 
Change in fair value of share repurchase liability571 2,174 
Interest expense on lease liabilities172 106 
Other interest expense118 568 

18,468 7,741 
Net finance cost13,093 7,110 
11. Share-based payment arrangements
The Omnibus Incentive Plan permits the Board of Directors to grant awards of options, RSUs, Performance Share Units ("PSUs") and Deferred Share Units (“DSUs”) to eligible participants.
RSUs, PSUs and DSUs will be settled by the issuance of shares at the settlement date. DSUs vest immediately as they are granted for past services. The RSUs and PSUs vest over a period of up to three years.
Share-based payments continuity
The table below summarizes the changes in the outstanding RSUs, PSUs, DSUs, and stock options for the three months ended March 31:
Stock options
Restricted share unitsPerformance share unitsDeferred share unitsQuantityWeighted
average
exercise
price
$
Outstanding, beginning of period3,892,643 1,778,431 48,596 8,594,289 56.24 
Forfeited(42,722)(454,132)— (68,484)80.90 
Replacement awards in a business combination909,735 — — 414,606 19.71 
Granted723,051 — 9,360 — — 
Exercised(212,732)— — (238,559)12.41 
Outstanding, end of period5,269,975 1,324,299 57,956 8,701,852 55.50 
Exercisable, end of period377,321 141,122 57,956 3,685,258 23.27 
Granted - weighted average grant date fair value1
$27.09
— $42.01$18.30— 
1 Granted - weighted average grant date fair value includes units granted and replacement awards in a business combination.
15


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Share-based payments by exercise price
The table below summarizes the share-based payments units outstanding based on the greater of the exercise price and the share price to be reached under the market performance conditions:
As at March 31, 2023For the three months ended March 31, 2023
Units outstandingUnrecognized share-based paymentsShare-based payments
$$
$0.00 - $37.51
10,990,969 135,914 23,484 
$47.21 - $78.58
721,411 1,286 296 
$104.53 and above
3,641,706 59,726 11,793 
Total15,354,086 196,926 35,573 
As at March 31, 2023, unrecognized share-based payments expense was approximately $196,926. The period over which such expense will be recognized is 4.5 years (0.9 year on a weighted average basis).
Replacement awards in a business combination
In connection with the Paya acquisition, the Company granted 909,375 RSU and 414,606 stock options to replace awards held by Paya employees under a new plan ("Paya equity plan"). Under the Paya equity plan, 1,324,341 Subordinate Voting Shares of the Company are reserved for issuance and issuable upon the exercise or settlement of awards, which represents the replacement awards granted upon closing of the Paya acquisition. The Company does not expect to grant further awards under the Paya equity plan.
The portion of the replacement awards at the acquisition date relating to services rendered up to the acquisition date, representing an amount of $7,045 was included as part of the consideration transferred (note 4). The portion of the replacement awards' fair value relating to services to be rendered in the future of $14,868 will be recognized as compensation expense over the remaining vesting period.
The fair value of stock options granted as replacement awards was estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:
Replacement awards
Share price$31.49
Exercise price$19.71
Risk-free interest rate4.00%
Expected volatility35.5%
Dividend yield—
Expected term6.0 years
16


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
12. Net income (loss) per share
Diluted net income (loss) per share excludes all dilutive potential shares if their effect is anti-dilutive as well as all potential shares for which performance conditions have not yet been met as of the reporting date. For the three months ended March 31, 2023 and 2022, anti-dilutive stock options, RSUs and PSUs were excluded from the calculation of diluted net income (loss) per share because the effect was anti-dilutive.

Three months ended
March 31

20232022
$$
Net income (loss) attributable to common shareholders of the Company (basic and diluted)(9,778)3,003 
Weighted average number of common shares outstanding – basic139,655,258 142,862,946 
Effect of dilutive securities— 3,741,874 
Weighted average number of common shares outstanding – diluted139,655,258 146,604,820 
Net income (loss) per share attributable to common shareholders of the Company:
Basic(0.07)0.02 
Diluted(0.07)0.02 
13. Determination of fair values
Certain of the Company’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes using the following methods.
Financial assets and financial liabilities
In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below:
•Level 1: defined as observable inputs such as quoted prices in active markets.
•Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.
•Level 3: defined as inputs that are based on little or no observable market data, therefore requiring entities to develop their own assumptions.
The Company has determined that the carrying amounts of its current financial assets and financial liabilities approximate their fair value given the short-term nature of these instruments.
The fair value of the variable interest rate non-current liabilities approximates the carrying amount as the liabilities bear interest at a rate that varies according to the market rate.

17


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
As at March 31, 2023 and December 31, 2022, financial instruments measured at fair value in the Condensed Interim Consolidated Financial Statements statements of financial position were as follows:
NotesFair value hierarchyMarch 31,
2023		December 31,
2022
$$
Assets
Investments measured at fair value through profit or lossLevel 11,087 1,002 
Investments measured at fair value through profit or lossLevel 32,148 2,148 
Investment in equity instrument designated at fair value through other comprehensive incomeLevel 325,325 — 
Advances to a third party independent sales organizationLevel 3— 2,154 

The following table presents the changes in level 3 items for the three months ended March 31, 2023:
Advances to a
third party
independent
sales
organization		Investments measured at fair value through profit or lossInvestment measured at fair value through other comprehensive income
$$$
Balance as at December 31, 20222,154 2,148 — 
Acquisition— — 25,000 
Merchant residuals received, net of interest on advances to a third parties(108)— — 
Settlement of advances to a third party(2,046)— — 
Effect of movements in exchange rates— — 325 
Balance as at March 31, 2023— 2,148 25,325 
Fair value remeasurement of level 3 instruments is recognized in selling, general and administrative expenses. Investments measured at fair value through profit and loss and through other comprehensive income are recognized in other non-current assets. Below are the assumptions and valuation methods used in the level 3 fair value measurements:
•On March 15, 2023, the Company acquired an equity interest in a private company for a total cash consideration of $25,000. The company designated this equity investment at fair value through other comprehensive income.
•As at March 31, 2023, the fair value of the contingent consideration for the Mazooma acquisition is nil (nil for December 2022). The fair value of the contingent consideration is determined using a formula specified in the purchase agreement. The main assumption is the forecast of financial performance. The maximum contingent consideration that could be paid if the future financial targets are met is $331,658 thousands Canadian dollars ($245,146).
18


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
14. Related party transactions
Transactions with key management personnel
Key management personnel compensation comprises the following:

Three months ended
March 31

20232022
$$
Salaries and short-term employee benefits2,460 1,350 
Share-based payments18,633 17,866 

21,093 19,216 
Other related party transactions
Three months ended
March 31

20232022
$$
Expenses – Travel(i)478 287 
(i)In the normal course of operations, the Company receives services from a company owned by a shareholder of the Company. The services received consist of travel services.
15. Supplementary cash flow disclosure

Three months ended
March 31

20232022

$$
Changes in non-cash working capital items:
Trade and other receivables1
(5,171)(5,787)
Inventory(133)(126)
Prepaid expenses(6,430)(1,916)
Contract assets(319)(479)
Trade and other payables3,579 (3,298)
Other current and non-current liabilities(652)(2,328)

(9,126)(13,934)
1 Interest received on cash and cash equivalents has been presented separately within cash flows from operating activities (previously was presented within cash flow movements on trade and other receivables). Interest received that was reclassified from trade and other receivables was $316 for the three months ended March 31, 2022.
19


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
March 31, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
16. Contingencies
From time to time, the Company is involved in various litigation matters arising in the ordinary course of its business. The Company is also exposed to possible uncertain tax positions in certain jurisdictions. Management does not expect that the resolution of those matters, either individually or in the aggregate, will have a material effect on the Company’s Condensed Interim Consolidated Financial Statements.
20