lov-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the Quarterly Period Ended June 30, 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 001-38252

Spark Networks SE

(Exact name of Registrant as specified in its Charter)


Germany			N/A
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
Kohlfurter Straße 41/43 Berlin Germany			10999
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (+49) 30 868000

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

American Depository Shares each representing one-tenth of an ordinary share

LOV

New York Stock Exchange

Ordinary shares, €1.00 nominal value per share*

LOV

New York Stock Exchange

* Not for trading purposes, but only in connection with the registration of American Depository Shares pursuant to the requirements of the Securities and Exchange Commission.

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

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

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. ☐

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 ordinary shares outstanding as of August 6, 2021 was 2,613,258.

Table of Contents


		Page
PART I
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30 , 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30 , 2021 and 2020	5
	Condensed Consolidated Statements of Shareholder s ' Equity for the three and six months ended June 30 , 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements	8
	Note 1 - Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 - Revenue	9
	Note 3 - Income Taxes	9
	Note 4 - Goodwill and Intangible Assets	10
	Note 5 - Accrued Expenses and Other Liabilities	12
	Note 6 - Long-term Debt	12
	Note 7 - Contingencies	13
	Note 8 - Financial Instruments and Fair Value Measurements	15
	Note 9 - Stock-based Compensation	15


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

PART II
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	Signatures	29

PART I

Financial Information

Item 1. Financial Statements

Spark Networks SE

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)


	June 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	11,054	$	19,267
Accounts receivable, net of allowance of $447 and $93, respectively	9,340		5,507
Prepaid expenses	4,757		4,366
Other current assets	973		2,140
Total current assets	26,124		31,280
Property and equipment, net of accumulated depreciation of $5,751 and $6,252, respectively	10,576		11,418
Goodwill	134,775		156,582
Intangible assets, net of accumulated amortization of $18,563 and $18,631, respectively	45,296		58,999
Deferred tax assets	7,326		23,522
Other assets	7,486		8,642
Total assets	$	231,583	$	290,443
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt	$	12,600	$	19,037
Accounts payable	12,450		11,127
Deferred revenue	39,597		38,304
Accrued expenses and other current liabilities	26,600		28,429
Total current liabilities	91,247		96,897
Long-term debt, net of current portion	74,600		80,109
Deferred tax liabilities	6,263		993
Other liabilities	17,309		17,541
Total liabilities	189,419		195,540
Contingencies (Note 7)
Shareholders' Equity:
Common stock, €1.00 nominal value; 2,661,386 shares issued as of June 30, 2021 and December 31, 2020; 2,613,258 and 2,605,689 shares outstanding as of June 30, 2021 and December 31, 2020, respectively	3,064		3,064
Treasury stock, at nominal value; 48,128 and 55,697 shares as of June 30, 2021 and December 31, 2020, respectively	(53)		(61)
Additional paid-in capital	222,082		220,852
Accumulated deficit	(187,779)		(132,248)
Accumulated other comprehensive income	4,850		3,296
Total shareholders' equity	42,164		94,903
Total liabilities and shareholders' equity	$	231,583	$	290,443

The accompanying notes are an integral part of these consolidated financial statements.

Spark Networks SE

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	55,253	$	56,527	$	111,632	$	114,184
Operating costs and expenses:
Cost of revenue, exclusive of depreciation and amortization	32,881		33,223		69,799		69,764




Sales and marketing expenses	1,152		1,185		2,203		2,240
Customer service expenses	1,902		1,938		3,763		4,013
Technical operations and development expenses	4,774		4,189		9,694		9,659
General and administrative expenses	7,096		8,340		15,415		15,223
Depreciation and amortization	2,298		2,332		4,588		4,653
Impairment of intangible assets and goodwill

SEC Form 10-Q filed by Spark Networks, Inc.