QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page | ||||||||
2 | ||||||||
Condensed Consolidated Financial Statements (Unaudited) | ||||||||
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 | ||||||||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 | ||||||||
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2022 and 2021 | ||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 | ||||||||
September 30, 2022 | December 31, 2021 | |||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Goodwill | ||||||||||||||
Intangible assets, net | ||||||||||||||
Right-of-use assets | ||||||||||||||
Deferred tax assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | $ | ||||||||||||
Deferred revenue | ||||||||||||||
Operating lease liabilities, current | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Operating lease liabilities, non-current | ||||||||||||||
Tax Receivable Agreement liability | ||||||||||||||
Warrant liability | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 3) | ||||||||||||||
Stockholders’ equity | ||||||||||||||
Preferred Stock - $ | ||||||||||||||
Class A Common Stock - $ | ||||||||||||||
Class V Common Stock - $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Total WM Technology, Inc. stockholders’ equity | ||||||||||||||
Noncontrolling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of revenues | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating (loss) income | ( | ( | ( | ||||||||||||||||||||
Other income (expenses) | |||||||||||||||||||||||
Change in fair value of warrant liability | |||||||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
(Loss) income before income taxes | ( | ( | |||||||||||||||||||||
(Benefit from) provision for income taxes | ( | ( | |||||||||||||||||||||
Net (loss) income | ( | ( | |||||||||||||||||||||
Net (loss) income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
Net (loss) income attributable to WM Technology, Inc. | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Class A Common Stock: | |||||||||||||||||||||||
Basic (loss) income per share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Diluted (loss) income per share | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Class A Common Stock: | |||||||||||||||||||||||
Weighted average basic shares outstanding | |||||||||||||||||||||||
Weighted average diluted shares outstanding |
Three and Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Class A | Common Stock Class V | Additional Paid-in Capital | Retained Earnings | Total WM Technology, Inc. Stockholders’ Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | ||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for acquisition (Note 6) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - Class A Unit exchange | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - Class P Unit exchange | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock - warrants exercised | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Impact of Tax Receivable Agreement due to exchanges of Class A Units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
As of March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Impact of Tax Receivable Agreement due to exchanges of Class A Units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Class A Common shares issued - Class A Unit exchange | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Class A Common shares issued - Class P Unit exchange | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
As of June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for employee taxes | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Impact of Tax Receivable Agreement due to exchanges of Class A Units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Class A Common shares issued - Class A Unit exchange | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Class A Common shares issued - Class P Unit exchange | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
As of September 30, 2022 | $ | $ | $ | $ | $ | $ | $ |
Three and Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Class A | Common Stock Class V | Additional Paid-in Capital | Retained Earnings | Total WM Technology, Inc. Stockholders’ Equity | Non-controlling Interests | Members’ Equity | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to members | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Repurchase of Class B Units | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
As of March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to members | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Repurchase of Class B Units | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Proceeds and shares issued in the Business Combination (Note 5) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
As of June 30, 2021 | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Transaction costs related to the Business Combination (Note 5) | — | — | — | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for acquisitions (Note 6) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2021 | $ | $ | $ | ( | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Change in fair value of warrant liability | ( | ( | |||||||||
Impairment loss | |||||||||||
Stock-based compensation | |||||||||||
Deferred income taxes | ( | ||||||||||
Provision for doubtful accounts | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Prepaid expenses and other current assets | |||||||||||
Other assets | ( | ||||||||||
Accounts payable and accrued expenses | |||||||||||
Deferred revenue | ( | ||||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
Cash paid for acquisition holdback release | ( | ||||||||||
Cash paid for other investments | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Taxes paid related to net share settlement of equity awards | ( | ||||||||||
Proceeds from the Business Combination | |||||||||||
Repayment of note payable | ( | ||||||||||
Distributions | ( | ( | |||||||||
Repurchase of Class B Units | ( | ||||||||||
Repayments of insurance premium financing | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net (decrease) increase in cash | ( | ||||||||||
Cash – beginning of period | |||||||||||
Cash – end of period | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Supplemental disclosures of noncash activities | |||||||||||
Issuance of equity for acquisitions | $ | $ | |||||||||
Insurance premium financing | $ | $ | |||||||||
Stock-based compensation capitalized for software development | $ | $ | |||||||||
Accrued liabilities assumed in connection with acquisition | $ | $ | |||||||||
Holdback liability recognized in connection with acquisition | $ | $ | |||||||||
Capitalized assets included in accounts payable and accrued expenses | $ | $ | |||||||||
Warranty liability assumed from the Business Combination | $ | $ | |||||||||
Tax receivable agreement liability recognized in connection with the Business Combination | $ | $ | |||||||||
Deferred tax assets recognized in connection with the Business Combination | $ | $ | |||||||||
Other assets assumed from the Business Combination | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Allowance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Addition to allowance | |||||||||||||||||||||||
Write-offs, net of recoveries | ( | ( | ( | ( | |||||||||||||||||||
Allowance, end of period | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Weedmaps for Business and other SaaS solutions | $ | $ | $ | $ | |||||||||||||||||||
Featured and deal listings | |||||||||||||||||||||||
Subtotal | |||||||||||||||||||||||
Other ad solutions | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
Level | September 30, 2022 | December 31, 2021 | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Warrant liability – Public Warrants | 1 | $ | $ | |||||||||||||||||
Warrant liability – Private Placement Warrants | 3 | |||||||||||||||||||
Total warrant liability | $ | $ |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||
Public Warrants | Private Placement Warrants | Warrant Liabilities | Public Warrants | Private Placement Warrants | Warrant Liabilities | |||||||||||||||||||||||||||||||||
Fair value, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Change in valuation inputs or other assumptions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Fair value, end of period | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||
Public Warrants | Private Placement Warrants | Warrant Liabilities | Public Warrants | Private Placement Warrants | Warrant Liabilities | |||||||||||||||||||||||||||||||||
Fair value, beginning of period | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Warrant liability acquired | ||||||||||||||||||||||||||||||||||||||
Change in valuation inputs or other assumptions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Fair value, end of period | $ | $ | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||
Exercise price | $ | $ | ||||||||||||
Stock price | $ | $ | ||||||||||||
Volatility | % | % | ||||||||||||
Term (years) | ||||||||||||||
Risk-free interest rate | % | % |
Consideration Transferred: | ||||||||
Cash consideration (1) | $ | |||||||
Share consideration (2) | ||||||||
Total consideration | $ |
Estimated Assets Acquired and Liabilities Assumed: | ||||||||
Assets acquired: | ||||||||
Cash | $ | |||||||
Accounts receivable | ||||||||
Other current assets | ||||||||
Fixed assets | ||||||||
Software technology | ||||||||
Trade name | ||||||||
Customer relationships | ||||||||
Order Backlog | ||||||||
Goodwill | ||||||||
Total assets acquired | ||||||||
Liabilities assumed: | ||||||||
Accounts payable | $ | ( | ||||||
Other current liabilities | ( | |||||||
Deferred revenue | ( | |||||||
Other liabilities | ( | |||||||
Total liabilities assumed | ( | |||||||
Total net assets acquired | $ |
Consideration Transferred: | ||||||||
Cash consideration | $ | |||||||
Share consideration(1) | ||||||||
Total consideration | $ |
Estimated Assets Acquired and Liabilities Assumed: | ||||||||
Assets acquired: | ||||||||
Software technology | $ | |||||||
Trade name | ||||||||
Customer relationships | ||||||||
Goodwill | ||||||||
Total assets acquired | ||||||||
Liabilities assumed: | ||||||||
Other current liabilities | ( | |||||||
Total net assets acquired | $ |
Consideration Transferred: | ||||||||
Cash consideration (1) | $ | |||||||
Share consideration(2) | ||||||||
Total consideration | $ |
Estimated Assets Acquired: | ||||||||
Software technology | $ | |||||||
Trade name | ||||||||
Customer relationships | ||||||||
Goodwill | ||||||||
Total asset acquired | $ |
Goodwill | ||||||||
Balance at December 31, 2021 | $ | |||||||
Acquisition of Eyechronic | ||||||||
Balance at September 30, 2022 | $ |
September 30, 2022 | |||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Intangible Assets | Accumulated Amortization | Net Intangible Assets | ||||||||||||||||||||
Trade and domain names | $ | $ | ( | $ | |||||||||||||||||||
Software technology | ( | ||||||||||||||||||||||
Customer relationships | ( | ||||||||||||||||||||||
Order backlog | ( | ||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ |
December 31, 2021 | |||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Intangible Assets | Accumulated Amortization | Net Intangible Assets | ||||||||||||||||||||
Trade and domain names | $ | $ | ( | $ | |||||||||||||||||||
Software technology | ( | ||||||||||||||||||||||
Customer relationships | ( | ||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ |
Remaining period in 2022 (three months) | $ | |||||||
Year ended December 31, 2023 | ||||||||
Year ended December 31, 2024 | ||||||||
Year ended December 31, 2025 | ||||||||
Year ended December 31, 2026 | ||||||||
Thereafter | ||||||||
$ |
September 30, 2022 | December 31, 2021 | |||||||||||||
Prepaid insurance | $ | $ | ||||||||||||
Prepaid marketing | ||||||||||||||
Prepaid software | ||||||||||||||
Other prepaid expenses and other current assets | ||||||||||||||
$ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued employee expenses | ||||||||||||||
Other accrued liabilities | ||||||||||||||
$ | $ |
Number of Units | ||||||||
Outstanding Class P Units, December 31, 2021 | ||||||||
Cancellations | ( | |||||||
Exchanged for Class A Common Stock | ( | |||||||
Outstanding, Class P Units, September 30, 2022 | ||||||||
Vested, September 30, 2022 |
Number of RSUs | Weighted-average Grant Date Fair Value | |||||||||||||
Non-vested at December 31, 2021 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Non-vested at September 30, 2022 | $ |
Number of PRSUs | Weighted-average Grant Date Fair Value | |||||||||||||
Non-vested at December 31, 2021 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | $ | |||||||||||||
Forfeited | $ | |||||||||||||
Non-vested at September 30, 2022 | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Sales and marketing | $ | $ | $ | $ | |||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | ( | ||||||||||||||||||||||
Total stock-based compensation expense | |||||||||||||||||||||||
Amount capitalized to software development | |||||||||||||||||||||||
Total stock-based compensation cost | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Less: net income attributable to WMH prior to the Business Combination | |||||||||||||||||||||||
Less: net (loss) income attributable to noncontrolling interests after the Business Combination | ( | ( | |||||||||||||||||||||
Net (loss) income attributable to WM Technology, Inc. Class A Common Stock - basic | ( | ( | |||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Less: fair value change of Public and Private Placement Warrants, net of amounts attributable to noncontrolling interests | |||||||||||||||||||||||
Net (loss) income attributable to WM Technology, Inc. Class A Common Stock - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average of shares of Class A Common Stock outstanding - basic | |||||||||||||||||||||||
Weighted average effect of dilutive securities: | |||||||||||||||||||||||
Public warrants1 | |||||||||||||||||||||||
Private warrants1 | |||||||||||||||||||||||
Restricted stock units1 | |||||||||||||||||||||||
Weighted average of shares of Class A Common Stock outstanding - diluted | |||||||||||||||||||||||
Net (loss) income per share of Class A Common Stock - basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Net (loss) income per share of Class A Common Stock - diluted | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Class A Units | |||||||||||||||||||||||
Class P Units | |||||||||||||||||||||||
RSUs | — | ||||||||||||||||||||||
PRSUs | |||||||||||||||||||||||
Public Warrants | |||||||||||||||||||||||
Private Placement Warrants | |||||||||||||||||||||||
Acquisition holdback shares |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(dollars in thousands, except for revenue per paying client) | |||||||||||||||||||||||
Revenues | $ | 50,500 | $ | 50,884 | $ | 166,246 | $ | 138,969 | |||||||||||||||
Net (loss) income | $ | (10,464) | $ | 49,205 | $ | (21,849) | $ | 73,773 | |||||||||||||||
EBITDA(1) | $ | (10,592) | $ | 50,578 | $ | (18,632) | $ | 76,985 | |||||||||||||||
Adjusted EBITDA(1) | $ | (9,630) | $ | 10,424 | $ | (11,178) | $ | 27,901 | |||||||||||||||
Average monthly revenue per paying client(2) | $ | 3,019 | $ | 3,817 | $ | 3,433 | $ | 3,682 | |||||||||||||||
Average monthly paying clients(3) | 5,576 | 4,444 | 5,380 | 4,194 | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net (loss) income | $ | (10,464) | $ | 49,205 | $ | (21,849) | $ | 73,773 | |||||||||||||||
(Benefit from) provision for income taxes | (2,641) | 393 | (5,699) | 242 | |||||||||||||||||||
Depreciation and amortization expenses | 2,513 | 980 | 8,916 | 2,970 | |||||||||||||||||||
EBITDA | (10,592) | 50,578 | (18,632) | 76,985 | |||||||||||||||||||
Stock-based compensation | 1,639 | 4,192 | 17,250 | 23,625 | |||||||||||||||||||
Change in fair value of warrant liability | (6,590) | (45,837) | (20,605) | (83,628) | |||||||||||||||||||
Transaction related bonuses | 1,039 | — | 4,069 | 1,550 | |||||||||||||||||||
Legal settlements and other legal costs | 2,148 | — | 3,212 | — | |||||||||||||||||||
Reduction in force | 1,960 | — | 1,960 | — | |||||||||||||||||||
Impairment loss | 766 | — | 1,317 | 2,372 | |||||||||||||||||||
Transaction costs | — | 1,450 | 251 | 1,450 | |||||||||||||||||||
Warrant transaction costs | — | 41 | — | 5,547 | |||||||||||||||||||
Adjusted EBITDA | $ | (9,630) | $ | 10,424 | $ | (11,178) | $ | 27,901 | |||||||||||||||
Provision for doubtful accounts | 10,176 | 2,355 | 14,867 | 3,015 | |||||||||||||||||||
Adjusted EBITDA before Provision for Doubtful Accounts | $ | 546 | $ | 12,779 | $ | 3,689 | $ | 30,916 | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Average monthly revenue per paying client | $ | 3,019 | $ | 3,817 | $ | 3,433 | $ | 3,682 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Average monthly paying clients | 5,576 | 4,444 | 5,380 | 4,194 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenues | $ | 50,500 | $ | 50,884 | $ | 166,246 | $ | 138,969 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of revenues | 4,272 | 2,035 | 11,870 | 5,800 | |||||||||||||||||||
Sales and marketing | 17,882 | 12,806 | 61,887 | 37,194 | |||||||||||||||||||
Product development | 11,988 | 7,782 | 38,341 | 25,921 | |||||||||||||||||||
General and administrative | 33,490 | 23,220 | 92,155 | 70,356 | |||||||||||||||||||
Depreciation and amortization | 2,513 | 980 | 8,916 | 2,970 | |||||||||||||||||||
Total operating expenses | 70,145 | 46,823 | 213,169 | 142,241 | |||||||||||||||||||
Operating (loss) income | (19,645) | 4,061 | (46,923) | (3,272) | |||||||||||||||||||
Other income (expenses) | |||||||||||||||||||||||
Change in fair value of warrant liability | 6,590 | 45,837 | 20,605 | 83,628 | |||||||||||||||||||
Other expense, net | (50) | (300) | (1,230) | (6,341) | |||||||||||||||||||
(Loss) income before income taxes | (13,105) | 49,598 | (27,548) | 74,015 | |||||||||||||||||||
(Benefit from) provision for income taxes | (2,641) | 393 | (5,699) | 242 | |||||||||||||||||||
Net (loss) income | (10,464) | 49,205 | (21,849) | 73,773 | |||||||||||||||||||
Net (loss) income attributable to noncontrolling interests | (5,300) | 28,370 | (14,484) | 48,675 | |||||||||||||||||||
Net (loss) income attributable to WM Technology, Inc. | $ | (5,164) | $ | 20,835 | $ | (7,365) | $ | 25,098 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of revenues | 8 | % | 4 | % | 7 | % | 4 | % | |||||||||||||||
Sales and marketing | 35 | % | 25 | % | 37 | % | 27 | % | |||||||||||||||
Product development | 24 | % | 15 | % | 23 | % | 19 | % | |||||||||||||||
General and administrative | 66 | % | 46 | % | 55 | % | 51 | % | |||||||||||||||
Depreciation and amortization | 5 | % | 2 | % | 5 | % | 2 | % | |||||||||||||||
Total operating expenses | 139 | % | 92 | % | 128 | % | 102 | % | |||||||||||||||
Operating (loss) income | (39) | % | 8 | % | (28) | % | (2) | % | |||||||||||||||
Other income (expenses) | |||||||||||||||||||||||
Change in fair value of warrant liability | 13 | % | 90 | % | 12 | % | 60 | % | |||||||||||||||
Other expense, net | 0 | % | (1) | % | (1) | % | (5) | % | |||||||||||||||
(Loss) income before income taxes | (26) | % | 97 | % | (17) | % | 53 | % | |||||||||||||||
(Benefit from) provision for income taxes | (5) | % | 1 | % | (3) | % | 0 | % | |||||||||||||||
Net (loss) income | (21) | % | 97 | % | (13) | % | 53 | % | |||||||||||||||
Net (loss) income attributable to noncontrolling interests | (10) | % | 56 | % | (9) | % | 35 | % | |||||||||||||||
Net (loss) income attributable to WM Technology, Inc. | (10) | % | 41 | % | (4) | % | 18 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenues | $ | 50,500 | $ | 50,884 | $ | (384) | (1) |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Cost of revenues | $ | 4,272 | $ | 2,035 | $ | 2,237 | 110 | ||||||||||||||||
Gross margin | 92 | % | 96 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Sales and marketing expenses | $ | 17,882 | $ | 12,806 | $ | 5,076 | 40 | ||||||||||||||||
Percentage of revenue | 35 | % | 25 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Product development expenses | $ | 11,988 | $ | 7,782 | $ | 4,206 | 54 | ||||||||||||||||
Percentage of revenue | 24 | % | 15 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
General and administrative expenses | $ | 33,490 | $ | 23,220 | $ | 10,270 | 44 | ||||||||||||||||
Percentage of revenue | 66 | % | 46 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Depreciation and amortization expenses | $ | 2,513 | $ | 980 | $ | 1,533 | 156 | ||||||||||||||||
Percentage of revenue | 5 | % | 2 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Change in fair value of warrant liability | $ | 6,590 | $ | 45,837 | (39,247) | (86) | |||||||||||||||||
Other expense, net | (50) | (300) | 250 | (83) | |||||||||||||||||||
Other income, net | $ | 6,540 | $ | 45,537 | (38,997) | (86) | |||||||||||||||||
Percentage of revenue | 13 | % | 89 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenues | $ | 166,246 | $ | 138,969 | $ | 27,277 | 20 |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Cost of revenues | $ | 11,870 | $ | 5,800 | $ | 6,070 | 105 | ||||||||||||||||
Gross margin | 93 | % | 96 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Sales and marketing expenses | $ | 61,887 | $ | 37,194 | $ | 24,693 | 66 | ||||||||||||||||
Percentage of revenue | 37 | % | 27 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Product development expenses | $ | 38,341 | $ | 25,921 | $ | 12,420 | 48 | ||||||||||||||||
Percentage of revenue | 23 | % | 19 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
General and administrative expenses | $ | 92,155 | $ | 70,356 | $ | 21,799 | 31 | ||||||||||||||||
Percentage of revenue | 55 | % | 51 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Depreciation and amortization expenses | $ | 8,916 | $ | 2,970 | $ | 5,946 | 200 | ||||||||||||||||
Percentage of revenue | 5 | % | 2 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
2022 | 2021 | ($) | (%) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Change in fair value of warrant liability | $ | 20,605 | $ | 83,628 | (63,023) | (75) | |||||||||||||||||
Other expense, net | (1,230) | (6,341) | 5,111 | (81) | |||||||||||||||||||
Other income, net | $ | 19,375 | $ | 77,287 | (57,912) | (75) | |||||||||||||||||
Percentage of revenue | 12 | % | 56 | % |
September 30, 2022 | December 31, 2021 | ||||||||||
(in thousands) | |||||||||||
Cash | $ | 34,170 | $ | 67,777 | |||||||
Accounts receivable, net | 16,642 | 17,550 | |||||||||
Working capital | 24,937 | 61,134 | |||||||||
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net cash (used in) provided by operating activities | $ | (10,466) | $ | 28,880 | |||||||
Net cash used in investing activities | $ | (14,848) | $ | (23,246) | |||||||
Net cash (used in) provided by financing activities | $ | (8,293) | $ | 52,382 |
Exhibit No. | Description | |||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
# | Indicates management contract or compensatory plan, contract or agreement. | |||||||
* | The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. |
WM TECHNOLOGY, INC. | |||||||||||||||||
Date: | November 7, 2022 | By: | /s/ Douglas Francis | ||||||||||||||
Name: | Douglas Francis | ||||||||||||||||
Title: | Executive Chair | ||||||||||||||||
(Principal Executive Officer) | |||||||||||||||||
Date: | November 7, 2022 | By: | /s/ Arden Lee | ||||||||||||||
Name: | Arden Lee | ||||||||||||||||
Title: | Chief Financial Officer | ||||||||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
Date: | November 7, 2022 | By: | /s/ Douglas Francis | ||||||||||||||||||||||||||||||||
Douglas Francis | |||||||||||||||||||||||||||||||||||
Executive Chair | |||||||||||||||||||||||||||||||||||
(Principal Executive Officer) |
Date: | November 7, 2022 | By: | /s/ Arden Lee | ||||||||||||||||||||||||||||||||
Arden Lee | |||||||||||||||||||||||||||||||||||
Chief Financial Officer | |||||||||||||||||||||||||||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
Date: | November 7, 2022 | By: | /s/ Douglas Francis | ||||||||||||||||||||||||||||||||
Douglas Francis | |||||||||||||||||||||||||||||||||||
Executive Chair | |||||||||||||||||||||||||||||||||||
(Principal Executive Officer) |
Date: | November 7, 2022 | By: | /s/ Arden Lee | ||||||||||||||||||||||||||||||||
Arden Lee | |||||||||||||||||||||||||||||||||||
Chief Financial Officer | |||||||||||||||||||||||||||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 90,372,205 | 65,677,361 |
Common stock, shares outstanding (in shares) | 90,372,205 | 65,677,361 |
Class V Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 56,066,624 | 65,502,347 |
Common stock, shares outstanding (in shares) | 56,066,624 | 65,502,347 |
Business and Organization |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Founded in 2008, WM Technology, Inc. (the “Company”) operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to retailers and brands in the United States state-legal and Canadian cannabis markets. The Company’s comprehensive business-to-consumer (“B2C”) and business-to-business (“B2B”) suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. The Company’s business primarily consists of its commerce-driven marketplace, Weedmaps, and its fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering, Weedmaps for Business. The Weedmaps marketplace provides cannabis consumers with information regarding cannabis retailers and brands. In addition, the Weedmaps marketplace aggregates data from a variety of sources including retailer point-of-sale solutions to provide consumers with the ability to browse by strain, pricing, cannibinoids and other information regarding locally available cannabis products, through the Company’s website and mobile apps. The marketplace provides consumers with product discovery, access to deals and discounts, and reservation of products for pickup by consumers or delivery to consumers by participating retailers. The marketplace also provides education and learning information to help newer consumers learn about the types of products to purchase. It also provides information on the cannabis plant and the industry and advocates for legalization. The Company believes the size, loyalty and engagement of our user base and the frequency of consumption of cannabis of that user base is highly valuable to the Company’s clients and results in its clients paying for its services. Weedmaps for Business, the Company’s SaaS offering, is a comprehensive set of eCommerce and compliance software solutions catered towards cannabis retailers, delivery services and brands. These solutions support cannabis businesses at every stage in the consumer funnel, enabling them to: •Strategically reach prospective cannabis consumers; •Manage pick-up, delivery and inventory in compliance with local regulations; •Help improve the customer experience by creating online browsing and ordering functionality on a brand, retailer or delivery operator’s website and by extending that functionality in-store with kiosks; •Foster customer loyalty and re-engage with segments of consumers; •Leverage the Weedmaps for Business products in conjunction with any other preferred software solutions via integrations and application programming interfaces (“APIs”); and •Make informed marketing and merchandising decisions using performance analytics and consumer and brand insights to promote products to specific consumer groups. The Company charges a monthly fee to retailer and brand clients for access to its WM Pages subscription package which includes: •WM Listings: A listing page for a retailer, delivery service or brand on the Weedmaps marketplace, enabling our clients to be discovered by the marketplace’s consumers; •WM Orders: Software for retailers to receive pick-up and delivery orders directly from a WM listing and have the orders be connected directly with a client’s point-of-sale (“PoS”) system (for certain PoS systems). The marketplace also enables brands to route customer purchase interest to a retailer that carries the brand’s product; •WM Store: Customizable menus for brands, retailers and delivery operators to embed on their website that facilitate customer pick-up or delivery orders and reach to more customers by bringing the breadth of the Weedmaps marketplace to a client’s own website; •WM Connectors: Centralized integration tool that allows for easier menu management, automatic inventory updates and streamlined order fulfillment workflows to enable clients to save time and integrate disparate software systems; and •WM Insights: An insights and analytics platform for clients leveraging data across the Weedmaps marketplace and software solutions. The Company also offers other add-on products for additional fees, including: •Featured Listings: Premium Placement ad solutions on high visibility locations on the Weedmaps marketplace to maximize clients’ listing and deal presence; •WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion; •WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey; •WM AdSuite: Omni-channel (on and off platform) marketing solution with access to the Weedmaps marketplace and off marketplace outlets including certain publishers, out-of-home units in addition to other media solutions; •WM CRM: Customer relationship management software allowing clients to reach new consumers, build loyalty, and grow revenue with the Company’s compliant app, text and marketing tools; •WM Dispatch: Compliant, automated, and optimized last-mile delivery software that helps clients manage their delivery fleets and logistics. This product streamlines the delivery experience from in-store to front-door; and •WM Screens: In-store digital menu signage and kiosk solution and media management tool enabling clients to enhance the in-store experience, impact omnichannel retail and centralize operations with revenue-driving and customizable digital signage. The Company sells its Weedmaps for Business suite in the United States, currently offers some of its Weedmaps for Business solutions in Canada and has a limited number of non-monetized listings in several other countries including Austria, Germany, the Netherlands, Spain and Switzerland. The Company operates in the United States, Canada, and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or applicable national law. The Company is headquartered in Irvine, California. The Company’s mission is to power a transparent and inclusive global cannabis economy. The Company’s technology addresses the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion. Over the past 14 years, the Weedmaps marketplace has become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies, and manage compliance needs. The Company holds a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide. The Company believes it offers the only comprehensive software platform that allows cannabis retailers to reach their target audience, quickly and cost effectively, addressing a wide range of needs. The Company is committed to building the software solutions that power cannabis businesses compliantly in the industry, to advocating for legalization, licensing and social equity of cannabis, and to facilitating further learning through partnership with subject matter experts on providing detailed, accurate information about cannabis. WM Technology, Inc. was initially incorporated in the Cayman Islands on June 7, 2019 under the name “Silver Spike Acquisition Corp” (“Silver Spike”). Silver Spike was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On June 16, 2021 (the “Closing Date”), Silver Spike consummated the business combination (the “Business Combination”), pursuant to that certain Agreement and Plan of Merger, dated December 10, 2020 (the “Merger Agreement”), by and among Silver Spike, Silver Spike Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Silver Spike Acquisition Corp. (“Merger Sub”), WM Holding Company, LLC, a Delaware limited liability company (when referred to in its pre-Business Combination capacity, “Legacy WMH” and following the Business Combination, “WMH LLC”), and Ghost Media Group, LLC, a Nevada limited liability company, solely in its capacity as the initial holder representative (the “Holder Representative”). On the Closing Date, and in connection with the closing of the Business Combination (the “Closing”), Silver Spike was domesticated and continues as a Delaware corporation, changing its name to WM Technology, Inc. The Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by WMH LLC and continue to operate through WMH LLC and its subsidiaries, and WM Technology, Inc.’s material assets are the equity interests of WMH LLC indirectly held by it. Legacy WMH was determined to be the accounting acquirer in the Business Combination, which was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
|
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. Management believes that these accounting policies conform to GAAP in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, certain information and footnotes required by GAAP in annual financial statements have been omitted or condensed and these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022. The condensed financial statements of the Company include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Company’s financial position as of September 30, 2022, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year. There have been no significant changes in the Company’s accounting policies from those described in the Company’s audited consolidated financial statements and the related notes to those statements. Pursuant to the Merger Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, Silver Spike was treated as the acquired company and Legacy WMH was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy WMH issuing stock for the net assets of Silver Spike, accompanied by a recapitalization. Legacy WMH was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: •Legacy WMH Class A Unit holders, through their ownership of the Class V Common Stock, had the greatest voting interest in the Company with over 50% of the voting interest; •Legacy WMH selected the majority of the new board of directors of the Company; •Legacy WMH senior management was the senior management of the Company; and •Legacy WMH was the larger entity based on historical operating activity and had the larger employee base. Thus, the financial statements included in this quarterly report reflect (i) the historical operating results of Legacy WMH prior to the Business Combination; (ii) the combined results of the WMH LLC and Silver Spike following the Business Combination; and (iii) the acquired assets and liabilities of Silver Spike stated at historical cost, with no goodwill or other intangible assets recorded. Principles of Consolidation The condensed consolidated financial statements include the accounts of WM Technology, Inc. and WM Holding Company, LLC, including their wholly and majority owned subsidiaries. In conformity with GAAP, all significant intercompany accounts and transactions have been eliminated. Foreign Currency Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the average exchange rates during the periods. The impact of exchange rate fluctuations from translation of assets and liabilities is insignificant for the three and nine months ended September 30, 2022 and 2021. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, among others, the valuation of accounts receivable, the useful lives of long-lived assets, income taxes, website and internal-use software development costs, leases, valuation of goodwill and other intangible assets, valuation of warrant liability, deferred tax asset, tax receivable agreement liability, revenue recognition, stock-based compensation, and the recognition and disclosure of contingent liabilities. Risks and Uncertainties The Company operates in a relatively new industry where laws and regulations vary significantly by jurisdiction. Currently, the majority of U.S. states permit medical cannabis, and several permit adult use. Additionally, while a number of U.S. legislators have introduced various bills to legalize cannabis at the federal level, none of these bills has become law. Currently, under federal law, cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is still a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines, and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. If any of the states that permit use of cannabis were to change their laws or the federal government was to actively enforce the CSA or other laws related to the federal prohibition on cannabis, the Company’s business could be adversely affected. In addition, the Company’s ability to grow and meet its operating objectives depends largely on the continued legalization and regulation of cannabis on a widespread basis. There can be no assurance that such legalization will occur on a timely basis, or at all. The geographic concentration of the Company’s clients makes the Company vulnerable to a downturn in the local market area. Historically, the Company’s business operations have been located primarily in the State of California, and for the nine months ended September 30, 2022, approximately 56% of the Company’s revenue originated in California. Fair Value Measurements The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: •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 the Company assessment of the assumptions that market participants would use in pricing the asset or liability. Accounts Receivable Accounts receivable is recorded at the invoiced amount and does not bear interest. The Company measures credit losses on its trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses, which is based on the expected losses rather than incurred losses. Under the credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information. The Company calculates the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include balance of customer account and aging status. Account balances are written off against the allowance when it is determined that it is probable that the receivable will not be recovered. The Company recorded an allowance for doubtful accounts of $13.9 million and $5.2 million as of September 30, 2022 and December 31, 2021, respectively. The increase in allowance for doubtful accounts included a higher reserve for at-risk customers that indicated financial difficulties and the impact from macroeconomic factors. As of September 30, 2022, a receivable due from one single customer accounted for approximately 11% of the total gross accounts receivable outstanding. The following table summarizes the changes in the allowance for doubtful accounts:
Investments in Equity Securities Investments in equity securities that do not have a readily determinable fair value and qualify for the measurement alternative for equity investments provided in ASC 321, Investments – Equity Securities are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of September 30, 2022 and December 31, 2021, the carrying value of the Company’s investments in equity securities without a readily determinable fair value was $6.5 million, which is recorded within Other assets on the Company’s condensed consolidated balance sheets. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and consist of internally developed software, computer equipment, furniture and fixtures and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and generally over five years for computer equipment, seven years for furniture and fixtures and five years for leasehold improvements. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s condensed consolidated statements of operations. Capitalized website and internal-use software development costs are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalizes certain costs related to the development and enhancement of the Weedmaps marketplace and SaaS solutions. The Company began to capitalize these costs when preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Capitalization ceases upon completion of all substantial testing. Maintenance and training costs are expensed as incurred. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred for enhancements that were expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements, generally three years. Product development costs that do not meet the criteria for capitalization are expensed as incurred. The Company assess impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable. If an event and a change in circumstance indicates that the carrying amount of an asset (or asset group) may not be recoverable and the expected undiscounted cash flows attributable to the asset are less than its carrying value, an impairment loss, if any, equals to the excess of the asset’s carrying value over its fair value is recognized. Leases The Company classifies arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated balance sheet as both a right-of-use asset (“ROU”) and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. The Company assess impairment of ROU assets when an event and change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event and a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable to the ROU asset is less than its carrying value, an impairment loss, if any, equals to the excess of the ROU asset’s carrying value over its fair value is recognized. Total net lease costs for the three months ended September 30, 2022 and 2021 were $2.3 million and $2.9 million, respectively. Total net lease costs for the nine months ended September 30, 2022 and 2021 were $7.1 million and $8.9 million, respectively. Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. For the three and nine months ended September 30, 2022, the Company recorded contra rent expense of $0.5 million and $1.3 million, respectively. The Company recognized impairment charges of $0.6 million and $2.4 million during the nine months ended September 30, 2022 and 2021, related to certain ROU assets reducing the carrying values of the lease assets to their estimated fair values. The fair values were estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on the sublease market rent. The impairment charges are included in general and administrative expenses in the consolidated statements of operations. Warrant Liability The Company assumed 12,499,993 public warrants originally issued in the initial public offering of Silver Spike (the “Public Warrants”) and 7,000,000 Private Placement Warrants that were originally issued in a private placement by Silver Spike (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) upon the Closing, all of which were issued in connection with Silver Spike’s initial public offering and entitle the holder to purchase one share of Class A Common Stock at an exercise price of at $11.50 per share. As of September 30, 2022, 12,499,973 Public Warrants and 7,000,000 Private Placement Warrants remained outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants. The Company evaluated the Warrants under ASC 815-40 - Derivatives and Hedging - Contracts in Entity’s Own Equity, and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A equity holders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in change in fair value of warrant liabilities within the condensed consolidated statements of operations at each reporting date. Tax Receivable Agreement In connection with the Business Combination, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with continuing members that provides for a payment to the continuing Class A Unit holders of 85% of the amount of tax benefits, if any, that the Company realizes, or is deemed to realize, as a result of redemptions or exchanges of Units. In connection with such potential future tax benefits resulting from the Business Combination, the Company has established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded to additional paid-in capital. Revenue Recognition The Company’s revenues are derived primarily from monthly subscriptions and additional offerings for access to the Company’s Weedmaps marketplace and SaaS solutions. The Company recognizes revenue when the fundamental criteria for revenue recognition are met. The Company recognizes revenue by applying the following steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company excludes sales taxes and other similar taxes from the measurement of the transaction price. For clients that pay in advance for listing and other services, the Company records deferred revenue and recognizes revenue over the applicable subscription term. The Company offers Weedmaps for Business subscriptions, which include access to the Weedmaps marketplace and certain SaaS solutions. As add-ons for additional fees, the Company offers other products, including featured listings, placements, promoted deals, nearby listings, other display advertising, client relationship management, digital menu, and delivery and logistics services. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception. Disaggregation of revenue Weedmaps for Business and other SaaS subscriptions include the Company's WM Pages subscription package as well subscriptions to the Company's other SaaS products. The WM Pages subscription package includes access to WM Listings, WM Orders, WM Store, WM Connectors and WM Insights. Additional SaaS subscriptions include WM CRM, WM Dispatch and WM Screens. These subscriptions are typically monthly in nature. Featured and deal listings include the Featured Listings and WM Deals products. Other ad solutions include certain advertising products on and off the Weedmaps marketplace, including WM AdSuite. For a description of these solutions, see the "Business and Organization" section. The following table presents the Company’s revenues disaggregated by major source:
Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription offerings, as described above, and is recognized as the revenue recognition criteria are met. Deferred revenue as of December 31, 2021 of $8.1 million was fully recognized in the first quarter of fiscal year 2022, and the deferred revenue balance as of September 30, 2022 of $6.6 million is expected to be fully recognized within the next twelve months. The Company generally invoices customers and receives payment on an upfront basis and payments do not include significant financing components or variable consideration and there are generally no rights of return or refunds after the subscription period has passed. All revenues during the periods presented were recognized over time, as opposed to at a point in time. Substantially all of the revenue has been generated in the United States during the periods presented. Cost of Revenues The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and inventory costs related to multi-media offerings. Product Development Costs Product development costs include salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. Advertising The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.3 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and $12.6 million and $11.9 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations. Stock-Based Compensation The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the performance period. The Company accounts for non-employee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. Income Taxes The Company uses the asset and liability method of accounting for income taxes under ASC 740 - Income Taxes. Under the guidance, deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more-likely-than-not the deferred tax assets will not be realized. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), revaluations of the warrant liability, changes in flow-through income not subject to tax and tax law developments. As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. following the Business Combination, on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions. For the three and nine months ended September 30, 2022, the Company recorded an income tax benefit of $2.6 million and $5.7 million, respectively, and for the three and nine months ended September 30, 2021, an income tax expense of $0.4 million and $0.2 million, respectively. The income tax benefit for the three and nine months ended September 30, 2022 was the result of the tax benefit of the Company's pro rata share of losses and tax credits flowing through from WM Holding LLC. The tax benefit related to U.S. federal and state tax benefits from certain Business Combination-related expenses offset, in part, by income taxes recorded during the period ended March 31, 2021 as a result of an audit performed by the Canada Revenue Agency on prior years income taxes paid by the Company’s subsidiary, WM Canada Holdings, Inc. The effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of warrant valuations, non-controlling interests represented by the portion of the flow-through income not subject to tax, permanent stock-based compensation and state taxes. During the nine months ended September 30, 2022, the Company acquired additional interest in WM Holding Company LLC (“LLC Interests”) in connection with the exchange of LLC Interests, and activity relating to its stock compensation plan. The Company recognized a deferred tax asset in the amount of $28.5 million associated with the basis difference in its investment in WM Holding Company LLC upon acquisition of these LLC Interests, some of which are related to the additional tax basis increases generated from expected future payments under the Tax Receivable Agreement (“TRA”), some of which are partially offset by the TRA liability amount of $14.3 million, and these amounts were recorded through equity. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company does not believe it has any uncertain income tax positions that are more-likely-than-not to materially affect its condensed consolidated financial statements. Segment Reporting The Company and its subsidiaries operate in one business segment. Earnings Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if-converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 13 for additional information on dilutive securities. Concentrations of Credit Risk The Company’s financial instruments are potentially subject to concentrations of credit risk. The Company places its cash with high quality credit institutions. From time to time, the Company maintains cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Management believes that the risk of loss is not significant and has not experienced any losses in such accounts. Reclassifications Repayments of insurance premium financing in the amount of $3.7 million for the nine months ended September 30, 2021 was previously classified on the consolidated statements of cash flows under cash used in the operating activities in the prior year. During the nine month ended September 30, 2022, the Company reclassified the repayments to cash used in financing activities in accordance with ASC 230 - Statement of Cash Flows. There is no impact to the total cash flow activities from this reclassification. Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments in ASU 2021-08 require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts from Customers (“ASC 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree financial statements were prepared in accordance with generally accepted accounting principles). For public business entities, the amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of ASU 2021-08 is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company adopted this new guidance as of January 1, 2022. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation During the ordinary course of the Company’s business, it is subject to various claims and litigation. Management believes that the outcome of such claims or litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flow.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):
The following tables summarize the changes in the fair value of the warrant liabilities (in thousands):
Public Warrants The Company determined the fair value of the Public Warrants, based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The fair value of the Public Warrants was $4.1 million and $16.8 million as of September 30, 2022 and December 31, 2021, respectively. Private Placement Warrants The estimated fair value of the Private Placement Warrants is determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Placement Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the date the Business Combination closed, or June 16, 2026. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
Significant changes in the volatility would result in a significant lower or higher fair value measurement, respectively. The fair value of the Private Placement Warrants was $2.7 million and $10.7 million as of September 30, 2022 and December 31, 2021, respectively. The Warrants were accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are presented within warrant liability on the accompanying condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy.
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Business Combination |
9 Months Ended |
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Sep. 30, 2022 | |
Reverse Recapitalization [Abstract] | |
Business Combination | Business Combination As previously discussed in Note 1, on June 16, 2021, the Company consummated the Business Combination pursuant to the Merger Agreement. In connection with the Closing, the following occurred: •Silver Spike was domesticated and continues as a Delaware corporation, changing its name to “WM Technology, Inc.” •The Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by WMH LLC and continue to operate through WMH LLC and its subsidiaries, and WM Technology, Inc.’s material assets are the equity interests of WMH LLC indirectly held by it. •The Company consummated the sale of 32,500,000 shares of Class A Common Stock for a purchase price of $10.00 per share (together, the “PIPE Financing”) pursuant to certain subscription agreements dated as of December 10, 2020, for an aggregate price of $325.0 million. •The Company contributed approximately $80.3 million of cash to WMH LLC, representing (a) the net amount held in the Company’s trust account following the redemption of 10,012 shares of Class A Common Stock originally sold in the Silver Spike’s initial public offering, less (b) cash consideration of $455.2 million paid to Legacy WMH Class A equity holders, plus (c) $325.0 million in aggregate proceeds from the PIPE Financing, less (d) the aggregate amount of transaction expenses incurred by the parties to the Business Combination Agreement. •The Company transferred $455.2 million to the Legacy WMH equity holders as cash consideration. •The Legacy WMH equity holders retained an aggregate of 65,502,347 Class A Units and 25,896,042 Class P Units. •The Company issued 65,502,347 shares of Class V Common Stock to Class A Unit holders, representing the same number of Class A Units retained by the Legacy WMH equity holders. •The Company, the Holder Representative and the Class A Unit holders entered into the Tax Receivable Agreement, pursuant to which WM Technology, Inc. will pay to WMH LLC Class A equity holders 85% of the net income tax savings that WM Technology, Inc. actually realizes as a result of increases in the tax basis of WMH LLC’s assets as a result of the exchange of Units for cash in the Business Combination and future exchanges of the Class A Units for shares of Class A Common Stock or cash pursuant to the Exchange Agreement, and certain other tax attributes of WMH LLC and tax benefits related to the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. Concurrently with the closing of the Business Combination, the Unit holders entered into the Exchange Agreement. The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Eyechronic On January 14, 2022, the Company acquired all the equity interests of Eyechronic LLC (“Eyechronic”) d/b/a Enlighten and rebranded as WM Screens, a Delaware limited liability company and a provider of software, digital signage services and multi-media offerings to dispensaries and brands, for total consideration of approximately $29.4 million. The Company accounted for the Eyechronic acquisition as an acquisition of a business under ASC 805. The acquired assets and liabilities of Eyechronic were recorded at their preliminary acquisition date fair values. The purchase price allocations are subject to change as the Company continues to gather information relevant to its determination of the fair value of the assets and liabilities acquired primarily related to, but not limited to, intangible assets. Any adjustments to the purchase price allocations will be made as soon as practicable but no later than one year from the acquisition date. The following table summarizes the components of consideration and the preliminary estimated fair value of assets acquired (in thousands):
(1)Includes $0.2 million settlement of pre-existing accounts payable with Eyechronic and holdback of $0.1 million recorded within other current liabilities on the Company’s condensed consolidated balance sheets. (2)The fair value of share consideration was calculated based on 5,399,553 shares of Class A common stock multiplied by the share price on the closing date of $5.32. This includes 677,847 of holdback shares to be issued subject to customary indemnification obligations.
During the nine months ended September 30, 2022, the Company incurred transaction expenses associated with the Eyechronic acquisition of $0.1 million, which is included in general and administrative expenses in the condensed consolidated statements of operations. The revenue and operating loss from Eyechronic included the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2022 were not material. Pro forma revenue and earnings amounts on a combined basis have not been presented as they are not material to the Company’s historical pre-acquisition financial statements. For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes. The fair values of the trade name and software technology intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of these assets. Owning these intangible assets means that the underlying entity wouldn’t have to pay for the privilege of deploying those assets. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the assets, can be attributed to the firm’s ownership. The fair values of the customer relationships and customer backlog assets were also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time. Sprout On September 3, 2021, the Company acquired certain assets and liabilities of the Sprout business (“Sprout") now d/b/a WM CRM, a leading, cloud-based customer relationship management (“CRM”) and marketing platform for the cannabis industry, for total consideration of approximately $31.2 million. The Company accounted for the Sprout acquisition as an acquisition of a business under ASC 805- Business Combinations. The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
___________________________________ (1)The fair value of share consideration issued in connection with the Spout acquisition was calculated based on 1,244,258 shares of Class A common stock issued multiplied by the share price on the closing date of $15.42. For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes. The fair values of the trade name intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Owning that intangible asset means that the underlying entity wouldn’t have to pay for the privilege of deploying that asset. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The fair value of the software technology intangible asset was also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time. The fair value of the customer relationships are determined using an “income approach”, specifically, the With-and-Without method, which is a commonly accepted valuation approach. This method estimates the value of customer-related assets by quantifying the impact on cash flows under a scenario in which the customer-related assets must be replaced and assuming all of the existing assets are in place except the customer-related assets. Essentially, it estimates the intangible asset’s value by calculating the difference between the two discounted cash-flow models. One that represents the status quo for the business enterprise with the asset in place and the second that represents the business enterprise with everything in place besides the customer-related asset. The projected cash flow period is the time-period it takes to build back up to that status quo. The difference between the two cash flows represents the calculated value of the customer-related asset. Transport Logistics Holding On September 29, 2021, the Company acquired all of the equity interests of Transport Logistics Holding Company, LLC (“TLH”), which is the parent company of Cannveya & CannCurrent (now d/b/a WM Dispatch & WM Connectors), for total consideration of approximately $15.1 million. WM Dispatch is a logistics platform that enables the compliant delivery of cannabis and WM Connectors is a technology integrations and connectors platform facilitating custom integrations with third party technology providers. The Company accounted for the TLH acquisition as an acquisition of a business under ASC 805- Business Combinations. The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
____________________________________ (1)Includes holdback of $1.0 million, which was paid during the second quarter of 2022. (2)The fair value of share consideration issued in connection with the TLH acquisition was calculated based on 694,540 shares of Class A common stock issued multiplied by the share price on the closing date of $14.58. For acquisitions, the excess of the purchase price over the estimated fair values of the net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill is primarily attributable to the expected synergies from combining operations. Goodwill recognized was allocated to the Company’s one operating segment and is generally deductible for tax purposes. The fair values of the trade name intangible assets are determined using an “income approach”, specifically, the relief-from royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Owning that intangible asset means that the underlying entity wouldn’t have to pay for the privilege of deploying that asset. Therefore, a portion of the acquired entity’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The fair value of the software technology intangible asset was also determined using an “income approach”, specifically a multi-period excess earnings approach, which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are a “wasting” asset and are expected to decline over time. The fair value of the customer relationships are determined using an “income approach”, specifically, the With-and-Without method, which is a commonly accepted valuation approach. This method estimates the value of customer-related assets by quantifying the impact on cash flows under a scenario in which the customer-related assets must be replaced and assuming all of the existing assets are in place except the customer-related assets. Essentially, it estimates the intangible asset’s value by calculating the difference between the two discounted cash-flow models. One that represents the status quo for the business enterprise with the asset in place and the second that represents the business enterprise with everything in place besides the customer-related asset. The projected cash flow period is the time-period it takes to build back up to that status quo. The difference between the two cash flows represents the calculated value of the customer-related asset.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets A summary of changes in goodwill for the nine months ended September 30, 2022 is as follows (in thousands):
Intangible assets consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):
Amortization expense for intangible assets was $0.7 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively, and $2.0 million and $0.7 million for the nine months months ended September 30, 2022 and 2021, respectively. The estimated future amortization expense of intangible assets as of September 30, 2022 is as follows (in thousands):
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Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
The Company capitalizes implementation costs incurred in cloud computing arrangements that are service contracts if they meet certain requirements. Those requirements are similar to the requirements for capitalizing implementation costs incurred to develop internal-use software. Amortization is computed using the straight-line method over the term of the associated hosting arrangement. These implementation costs are classified on the balance sheet in prepaid and other current assets, and the related cash flows are presented as cash outflows from operations. Impairment is recognized and measured when it is no longer probable that the computer software project will be completed and placed in service. The Company recognized an impairment charge of $0.8 million during the three and nine months ended September 30, 2022, related to certain capitalized implementation costs for a cloud computing arrangement that was abandoned.
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Accounts Payable and Accrued Expenses |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
As of September 30, 2022 and December 31, 2021, other accrued liabilities included short-term insurance premium financing of $3.0 million and $4.2 million, respectively.
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Warrant Liability |
9 Months Ended |
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Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrant Liability | Warrant Liability At September 30, 2022, there were 12,499,973 Public Warrants outstanding and 7,000,000 Private Placement Warrants outstanding. As part of Silver Spike’s initial public offering, 12,500,000 Public Warrants were sold. The Public Warrants entitle the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares will be issued upon exercise of the warrants. The Public Warrants will expire at 5:00 p.m. New York City time on June 16, 2026, or earlier upon redemption or liquidation. The Public Warrants are listed on the NYSE under the symbol “MAPSW.” The Company may redeem the Public Warrants starting July 16, 2021, in whole and not in part, at a price of $0.01 per Public Warrant, upon not less than 30 days’ prior written notice of redemption to each holder of Public Warrants, and if, and only if, the reported last sales price of the Company’s Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalization and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the holders of Public Warrants. Simultaneously with Silver Spike’s initial public offering, Silver Spike consummated a private placement of 7,000,000 Private Placement Warrants with Silver Spike’s sponsor (“Silver Spike Sponsor”). Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants (including the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain exceptions, and they are nonredeemable as long as they are held by Silver Spike Sponsor or its permitted transferees. Silver Spike Sponsor, as well as its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis and will have certain registration rights related to such Private Placement Warrants. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than Silver Spike Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. The Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A Common Stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. The Private Placement Warrants are identical to the Public Warrants underlying the units sold in the initial public offering, except that the Private Placement Warrants and the Class A Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company concluded the Public Warrants and Private Placement Warrants, or the Warrants, meet the definition of a derivative under ASC 815- Derivatives and Hedging (as described in Note 2) and are recorded as liabilities. Upon the Closing, the fair value of the Warrants was recorded on the balance sheet. The fair value of the Warrants are remeasured as of each balance sheet date, which resulted in non-cash gains of $6.6 million and $45.8 million for the three months ended September 30, 2022 and 2021, respectively, and non-cash gains of $20.6 million and $83.6 million for the nine months ended September 30, 2022 and 2021, respectively
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Equity |
9 Months Ended |
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Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | Equity Class A Common Stock Voting Rights Each holder of the shares of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of the shares of Class A Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class A Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class V Common Stock. Dividend Rights Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available therefor. Rights upon Liquidation, Dissolution and Winding-Up In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the shares of Class A Common Stock, then outstanding, if any. Preemptive or Other Rights The holders of shares of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the shares of Class A Common Stock. The rights, preferences and privileges of holders of shares of Class A Common Stock will be subject to those of the holders of any shares of the preferred stock that the Company may issue in the future. Class V Common Stock Voting Rights Each holder of the shares of Class V Common Stock is entitled to one vote for each share of Class V Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of shares of Class V Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, the holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class A Common Stock. Dividend Rights The holders of the Class V Common Stock will not participate in any dividends declared by the Company’s board of directors. Rights upon Liquidation, Dissolution and Winding-Up In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class V Common Stock are not entitled to receive any of the Company’s assets. Preemptive or Other Rights The holders of shares of Class V Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class V Common Stock. Issuance and Retirement of Class V Common Stock In the event that any outstanding share of Class V Common Stock ceases to be held directly or indirectly by a holder of Class A Units, such share will automatically be transferred to us for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V Common Stock other than in connection with the valid issuance or transfer of Units in accordance with the governing documents of WMH LLC. Preferred Stock Pursuant to the amended and restated certificate of incorporation in effect as of June 15, 2021, the Company was authorized to issue 75,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2022, there were no shares of preferred stock issued or outstanding. Noncontrolling InterestsThe noncontrolling interest represents the Units held by holders other than the Company. As of September 30, 2022, the noncontrolling interests owned 39.9% of the Units outstanding. The noncontrolling interests’ ownership percentage can fluctuate over time, including as the WMH LLC equity holders elect to exchange Units for Class A Common Stock. The Company has consolidated the financial position and results of operations of WMH LLC and reflected the proportionate interest held by the WMH LLC Unit equity holders as noncontrolling interests.
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Stock-based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation WM Holding Company, LLC Equity Incentive Plan The Company has accounted for the issuance of Class A-3 and Class B Units issued under WM Holding Company, LLC’s Equity Incentive Plan in accordance with ASC 718 - Stock Based Compensation. The Company considers the limitation on the exercisability of the Class A-3 and Class B Units to be a performance condition and records compensation cost when it becomes probable that the performance condition will be met. In connection with the Business Combination, each of the Class A-3 Units outstanding prior to the Business Combination were cancelled, and the holder thereof received a number of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) and an equivalent number of shares of Class V Common Stock, par value $0.0001 per share (together with the Class A Units, the “Paired Interests”), and each of the Class B Units outstanding prior to the Business Combination were cancelled and holders thereof received a number of Class P units representing limited liability company interests of WMH LLC (the “Class P Units” and together with the Class A Units, the “Units”), each in accordance with the Merger Agreement. Concurrently with the closing of the Business Combination, the Unit holders entered into an exchange agreement (the “Exchange Agreement”). The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock. A summary of the Class P Unit activity for the nine months ended September 30, 2022 is as follows:
As of September 30, 2022, unrecognized stock-based compensation expense for non-vested Class P Units was $2.2 million, which is expected to be recognized over a weighted-average period of 1.6 years. For the three months ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense for the Class P Units of $0.6 million and $0.7 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense for the Class P Units of $1.8 million and $20.1 million, respectively. Due to the Business Combination completed in the second quarter of 2021, certain limitations on exercisability related to the Company’s Class P equity awards issued to employees and consultants were removed and as a result, the Company recognized the life-to-date expense on units vested through the Business Combination date on those equity awards during the 2021 period. The stock-based compensation in the nine months ended September 30, 2021 also included a one-time incremental expense of $4.1 million related to an award modification as a result of an advisory agreement entered into with a former executive. WM Technology, Inc. Equity Incentive Plan In connection with the Business Combination, the Company adopted the WM Technology, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the granting of incentive stock options to employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants. As of September 30, 2022, 25,768,971 shares of Class A Common Stock are authorized for issuance pursuant to awards under the 2021 Plan. The number of shares of Class A Common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to five percent (5%) of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding year; provided, however that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. As of September 30, 2022, 12,127,760 shares of Class A Common Stock are available for future issuance. A summary of the restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 is as follows:
As of September 30, 2022, unrecognized stock-based compensation expense for non-vested RSUs was $63.0 million, which is expected to be recognized over a weighted-average period of 2.8 years. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense for the RSUs of $5.3 million and $15.8 million, respectively. The Company grants performance-based restricted stock units (“PRSUs”) with performance and service-based vesting conditions. The level of achievement of such goals may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. The Company recognizes expense ratably over the vesting period for the PRSUs when it is probable that the performance criteria specified will be achieved. The fair value is equal to the market price of the Company’s common stock on the date of grant. A summary of the PRSU activity for the nine months ended September 30, 2022 is as follows:
During the second quarter of 2022, management determined that the achievement of the minimum thresholds of the performance criteria of its PRSUs is not probable. As a result, the Company recorded an adjustment to reverse all stock compensation expense previously recorded for these awards. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation credits for the PRSUs of $4.2 million and $0.4 million, respectively. As of September 30, 2022, the unrecognized compensation expense related to these PRUs was $15.6 million, which will be amortized over the remaining requisite service period if and when the Company determines that vesting is probable. The Company recorded stock-based compensation cost (credit) related to the Class P Units, RSUs and PRSUs in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands):
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per ShareBasic income (loss) per share of Class A Common Stock is computed by dividing net earnings (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share of Class A Common Stock adjusts basic net income (loss) per share of Class A Common Stock for the potentially dilutive impact of securities. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability, net of the portion attributable to non-controlling interests, and adjusts the denominator to include the dilutive shares calculated using the treasury stock method. The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands, except for share and per share amounts):
____________________________________ ¹Calculated using the treasury stock method. Shares of the Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive:
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsDuring the second quarter of 2022, the Company entered into a sublease agreement with an affiliate to a member of the board of directors. The sublease commenced on June 1, 2022, and the term is for the remainder of the original lease and will expire on February 28, 2025, or sooner in the event that the original lease is cancelled prior to the expiration date. The monthly base rent, after the rent abatement period for the first four months, is $69,000. As of September 30, 2022, the security deposit for the sublease of approximately $0.1 million is included in other long-term liabilities on the accompanying condensed balance sheets. For the three and nine months ended September 30, 2022, income on the sublease was approximately $0.2 million and this amount is netted with rent expense and included in general and administrative expenses on the accompanying condensed statements of operations. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, certain information and footnotes required by GAAP in annual financial statements have been omitted or condensed and these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022. The condensed financial statements of the Company include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Company’s financial position as of September 30, 2022, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year. There have been no significant changes in the Company’s accounting policies from those described in the Company’s audited consolidated financial statements and the related notes to those statements. Pursuant to the Merger Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, Silver Spike was treated as the acquired company and Legacy WMH was treated as the acquirer for financial statement reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy WMH issuing stock for the net assets of Silver Spike, accompanied by a recapitalization. Legacy WMH was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: •Legacy WMH Class A Unit holders, through their ownership of the Class V Common Stock, had the greatest voting interest in the Company with over 50% of the voting interest; •Legacy WMH selected the majority of the new board of directors of the Company; •Legacy WMH senior management was the senior management of the Company; and •Legacy WMH was the larger entity based on historical operating activity and had the larger employee base. Thus, the financial statements included in this quarterly report reflect (i) the historical operating results of Legacy WMH prior to the Business Combination; (ii) the combined results of the WMH LLC and Silver Spike following the Business Combination; and (iii) the acquired assets and liabilities of Silver Spike stated at historical cost, with no goodwill or other intangible assets recorded.
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Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of WM Technology, Inc. and WM Holding Company, LLC, including their wholly and majority owned subsidiaries. In conformity with GAAP, all significant intercompany accounts and transactions have been eliminated.
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Foreign Currency | Foreign Currency Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the average exchange rates during the periods. The impact of exchange rate fluctuations from translation of assets and liabilities is insignificant for the three and nine months ended September 30, 2022 and 2021.
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, among others, the valuation of accounts receivable, the useful lives of long-lived assets, income taxes, website and internal-use software development costs, leases, valuation of goodwill and other intangible assets, valuation of warrant liability, deferred tax asset, tax receivable agreement liability, revenue recognition, stock-based compensation, and the recognition and disclosure of contingent liabilities.
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Risks and Uncertainties | Risks and Uncertainties The Company operates in a relatively new industry where laws and regulations vary significantly by jurisdiction. Currently, the majority of U.S. states permit medical cannabis, and several permit adult use. Additionally, while a number of U.S. legislators have introduced various bills to legalize cannabis at the federal level, none of these bills has become law. Currently, under federal law, cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is still a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines, and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. If any of the states that permit use of cannabis were to change their laws or the federal government was to actively enforce the CSA or other laws related to the federal prohibition on cannabis, the Company’s business could be adversely affected. In addition, the Company’s ability to grow and meet its operating objectives depends largely on the continued legalization and regulation of cannabis on a widespread basis. There can be no assurance that such legalization will occur on a timely basis, or at all. The geographic concentration of the Company’s clients makes the Company vulnerable to a downturn in the local market area. Historically, the Company’s business operations have been located primarily in the State of California, and for the nine months ended September 30, 2022, approximately 56% of the Company’s revenue originated in California.
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Fair Value Measurements | Fair Value Measurements The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: •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 the Company assessment of the assumptions that market participants would use in pricing the asset or liability.
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Accounts Receivable | Accounts Receivable Accounts receivable is recorded at the invoiced amount and does not bear interest. The Company measures credit losses on its trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses, which is based on the expected losses rather than incurred losses. Under the credit loss model, lifetime expected credit losses are measured and recognized at each reporting date based on historical, current and forecast information. The Company calculates the expected credit losses on a pool basis for those trade receivables that have similar risk characteristics. For those trade receivables that do not share similar risk characteristics, the allowance for doubtful accounts is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include balance of customer account and aging status. Account balances are written off against the allowance when it is determined that it is probable that the receivable will not be recovered. The Company recorded an allowance for doubtful accounts of $13.9 million and $5.2 million as of September 30, 2022 and December 31, 2021, respectively. The increase in allowance for doubtful accounts included a higher reserve for at-risk customers that indicated financial difficulties and the impact from macroeconomic factors.
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Investments in Equity Securities | Investments in Equity Securities Investments in equity securities that do not have a readily determinable fair value and qualify for the measurement alternative for equity investments provided in ASC 321, Investments – Equity Securities are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of September 30, 2022 and December 31, 2021, the carrying value of the Company’s investments in equity securities without a readily determinable fair value was $6.5 million, which is recorded within Other assets on the Company’s condensed consolidated balance sheets.
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Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and consist of internally developed software, computer equipment, furniture and fixtures and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and generally over five years for computer equipment, seven years for furniture and fixtures and five years for leasehold improvements. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s condensed consolidated statements of operations. Capitalized website and internal-use software development costs are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalizes certain costs related to the development and enhancement of the Weedmaps marketplace and SaaS solutions. The Company began to capitalize these costs when preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Capitalization ceases upon completion of all substantial testing. Maintenance and training costs are expensed as incurred. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred for enhancements that were expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements, generally three years. Product development costs that do not meet the criteria for capitalization are expensed as incurred. The Company assess impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable. If an event and a change in circumstance indicates that the carrying amount of an asset (or asset group) may not be recoverable and the expected undiscounted cash flows attributable to the asset are less than its carrying value, an impairment loss, if any, equals to the excess of the asset’s carrying value over its fair value is recognized.
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Leases | Leases The Company classifies arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the consolidated balance sheet as both a right-of-use asset (“ROU”) and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. The Company assess impairment of ROU assets when an event and change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event and a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable to the ROU asset is less than its carrying value, an impairment loss, if any, equals to the excess of the ROU asset’s carrying value over its fair value is recognized. Total net lease costs for the three months ended September 30, 2022 and 2021 were $2.3 million and $2.9 million, respectively. Total net lease costs for the nine months ended September 30, 2022 and 2021 were $7.1 million and $8.9 million, respectively. Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. For the three and nine months ended September 30, 2022, the Company recorded contra rent expense of $0.5 million and $1.3 million, respectively. The Company recognized impairment charges of $0.6 million and $2.4 million during the nine months ended September 30, 2022 and 2021, related to certain ROU assets reducing the carrying values of the lease assets to their estimated fair values. The fair values were estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on the sublease market rent. The impairment charges are included in general and administrative expenses in the consolidated statements of operations.
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Warrant Liability | Warrant Liability The Company assumed 12,499,993 public warrants originally issued in the initial public offering of Silver Spike (the “Public Warrants”) and 7,000,000 Private Placement Warrants that were originally issued in a private placement by Silver Spike (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) upon the Closing, all of which were issued in connection with Silver Spike’s initial public offering and entitle the holder to purchase one share of Class A Common Stock at an exercise price of at $11.50 per share. As of September 30, 2022, 12,499,973 Public Warrants and 7,000,000 Private Placement Warrants remained outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants. The Company evaluated the Warrants under ASC 815-40 - Derivatives and Hedging - Contracts in Entity’s Own Equity, and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A equity holders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in change in fair value of warrant liabilities within the condensed consolidated statements of operations at each reporting date.
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Tax Receivable Agreement | Tax Receivable Agreement In connection with the Business Combination, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with continuing members that provides for a payment to the continuing Class A Unit holders of 85% of the amount of tax benefits, if any, that the Company realizes, or is deemed to realize, as a result of redemptions or exchanges of Units. In connection with such potential future tax benefits resulting from the Business Combination, the Company has established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded to additional paid-in capital.
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Revenue Recognition | Revenue Recognition The Company’s revenues are derived primarily from monthly subscriptions and additional offerings for access to the Company’s Weedmaps marketplace and SaaS solutions. The Company recognizes revenue when the fundamental criteria for revenue recognition are met. The Company recognizes revenue by applying the following steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company excludes sales taxes and other similar taxes from the measurement of the transaction price. For clients that pay in advance for listing and other services, the Company records deferred revenue and recognizes revenue over the applicable subscription term. The Company offers Weedmaps for Business subscriptions, which include access to the Weedmaps marketplace and certain SaaS solutions. As add-ons for additional fees, the Company offers other products, including featured listings, placements, promoted deals, nearby listings, other display advertising, client relationship management, digital menu, and delivery and logistics services. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception. Disaggregation of revenue Weedmaps for Business and other SaaS subscriptions include the Company's WM Pages subscription package as well subscriptions to the Company's other SaaS products. The WM Pages subscription package includes access to WM Listings, WM Orders, WM Store, WM Connectors and WM Insights. Additional SaaS subscriptions include WM CRM, WM Dispatch and WM Screens. These subscriptions are typically monthly in nature. Featured and deal listings include the Featured Listings and WM Deals products. Other ad solutions include certain advertising products on and off the Weedmaps marketplace, including WM AdSuite. For a description of these solutions, see the "Business and Organization" section. The following table presents the Company’s revenues disaggregated by major source:
Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription offerings, as described above, and is recognized as the revenue recognition criteria are met. Deferred revenue as of December 31, 2021 of $8.1 million was fully recognized in the first quarter of fiscal year 2022, and the deferred revenue balance as of September 30, 2022 of $6.6 million is expected to be fully recognized within the next twelve months. The Company generally invoices customers and receives payment on an upfront basis and payments do not include significant financing components or variable consideration and there are generally no rights of return or refunds after the subscription period has passed. All revenues during the periods presented were recognized over time, as opposed to at a point in time. Substantially all of the revenue has been generated in the United States during the periods presented.
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Cost of Revenues | Cost of Revenues The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and inventory costs related to multi-media offerings.
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Product Development Costs | Product Development Costs Product development costs include salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred.
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Advertising | Advertising The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.3 million and $4.1 million for the three months ended September 30, 2022 and 2021, respectively, and $12.6 million and $11.9 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations.
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Stock-Based Compensation | Stock-Based Compensation The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the performance period. The Company accounts for non-employee stock-based transactions using the fair value of the consideration received (i.e., the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable.
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Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes under ASC 740 - Income Taxes. Under the guidance, deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more-likely-than-not the deferred tax assets will not be realized. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), revaluations of the warrant liability, changes in flow-through income not subject to tax and tax law developments. As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. following the Business Combination, on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions. For the three and nine months ended September 30, 2022, the Company recorded an income tax benefit of $2.6 million and $5.7 million, respectively, and for the three and nine months ended September 30, 2021, an income tax expense of $0.4 million and $0.2 million, respectively. The income tax benefit for the three and nine months ended September 30, 2022 was the result of the tax benefit of the Company's pro rata share of losses and tax credits flowing through from WM Holding LLC. The tax benefit related to U.S. federal and state tax benefits from certain Business Combination-related expenses offset, in part, by income taxes recorded during the period ended March 31, 2021 as a result of an audit performed by the Canada Revenue Agency on prior years income taxes paid by the Company’s subsidiary, WM Canada Holdings, Inc. The effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of warrant valuations, non-controlling interests represented by the portion of the flow-through income not subject to tax, permanent stock-based compensation and state taxes. During the nine months ended September 30, 2022, the Company acquired additional interest in WM Holding Company LLC (“LLC Interests”) in connection with the exchange of LLC Interests, and activity relating to its stock compensation plan. The Company recognized a deferred tax asset in the amount of $28.5 million associated with the basis difference in its investment in WM Holding Company LLC upon acquisition of these LLC Interests, some of which are related to the additional tax basis increases generated from expected future payments under the Tax Receivable Agreement (“TRA”), some of which are partially offset by the TRA liability amount of $14.3 million, and these amounts were recorded through equity. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company does not believe it has any uncertain income tax positions that are more-likely-than-not to materially affect its condensed consolidated financial statements.
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Segment Reporting | Segment Reporting The Company and its subsidiaries operate in one business segment.
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Earnings Per Share | Earnings Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if-converted method, as applicable. Stock awards are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period.
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Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s financial instruments are potentially subject to concentrations of credit risk. The Company places its cash with high quality credit institutions. From time to time, the Company maintains cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Management believes that the risk of loss is not significant and has not experienced any losses in such accounts.
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Reclassifications | Reclassifications Repayments of insurance premium financing in the amount of $3.7 million for the nine months ended September 30, 2021 was previously classified on the consolidated statements of cash flows under cash used in the operating activities in the prior year. During the nine month ended September 30, 2022, the Company reclassified the repayments to cash used in financing activities in accordance with ASC 230 - Statement of Cash Flows. There is no impact to the total cash flow activities from this reclassification.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments in ASU 2021-08 require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts from Customers (“ASC 606”). At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree financial statements were prepared in accordance with generally accepted accounting principles). For public business entities, the amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of ASU 2021-08 is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company adopted this new guidance as of January 1, 2022. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Allowance for Credit Loss | The following table summarizes the changes in the allowance for doubtful accounts:
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Schedule of Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by major source:
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Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Liabilities Measured on Recurring Basis | The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):
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Schedule of Derivative Liabilities at Fair Value | The following tables summarize the changes in the fair value of the warrant liabilities (in thousands):
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Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions | The following table summarizes the components of consideration and the preliminary estimated fair value of assets acquired (in thousands):
(1)Includes $0.2 million settlement of pre-existing accounts payable with Eyechronic and holdback of $0.1 million recorded within other current liabilities on the Company’s condensed consolidated balance sheets. (2)The fair value of share consideration was calculated based on 5,399,553 shares of Class A common stock multiplied by the share price on the closing date of $5.32. This includes 677,847 of holdback shares to be issued subject to customary indemnification obligations.
The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
___________________________________ (1)The fair value of share consideration issued in connection with the Spout acquisition was calculated based on 1,244,258 shares of Class A common stock issued multiplied by the share price on the closing date of $15.42. The following table summarizes the components of consideration and the estimated fair value of assets acquired (in thousands):
____________________________________ (1)Includes holdback of $1.0 million, which was paid during the second quarter of 2022. (2)The fair value of share consideration issued in connection with the TLH acquisition was calculated based on 694,540 shares of Class A common stock issued multiplied by the share price on the closing date of $14.58.
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | A summary of changes in goodwill for the nine months ended September 30, 2022 is as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense of intangible assets as of September 30, 2022 is as follows (in thousands):
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Prepaid Expenses and Other Current Assets (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
|
Accounts Payable and Accrued Expenses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses as of September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
|
Stock-based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Class P Unit Activities | A summary of the Class P Unit activity for the nine months ended September 30, 2022 is as follows:
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Schedule of Restricted Stock Units Activity | A summary of the restricted stock unit (“RSU”) activity for the nine months ended September 30, 2022 is as follows:
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Schedule of Performance Shares Activity | A summary of the PRSU activity for the nine months ended September 30, 2022 is as follows:
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Schedule of Stock-based Payment Arrangement | The Company recorded stock-based compensation cost (credit) related to the Class P Units, RSUs and PRSUs in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands):
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands, except for share and per share amounts):
____________________________________ ¹Calculated using the treasury stock method.
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive:
|
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance, beginning of year | $ 7,971 | $ 719 | $ 5,169 | $ 914 |
Addition to allowance | 10,176 | 2,355 | 14,867 | 3,015 |
Write-offs, net of recoveries | (4,273) | (49) | (6,162) | (904) |
Allowance, end of year | $ 13,874 | $ 3,025 | $ 13,874 | $ 3,025 |
Accounts Receivable | Customer Concentration Risk | Customer One | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.00% |
Summary of Significant Accounting Policies - Warrant Liabilities (Details) - $ / shares |
Sep. 30, 2022 |
Jun. 16, 2021 |
---|---|---|
Class A Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Right to purchase shares (in shares) | 1 | |
Exercise price of warrant (in dollars per share) | $ 11.50 | $ 11.50 |
Minimum requirement for cash settlement as percent of stockholders | 50.00% | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 12,499,973 | 12,499,993 |
Private Placement Warrant | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 7,000,000 | 7,000,000 |
Summary of Significant Accounting Policies - Disaggregated Net Revenue by Major Source (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 50,500 | $ 50,884 | $ 166,246 | $ 138,969 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 47,027 | 47,364 | 154,802 | 129,903 |
Weedmaps for Business and other SaaS solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 12,383 | 11,067 | 38,093 | 30,313 |
Featured and deal listings | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 34,644 | 36,297 | 116,709 | 99,590 |
Other ad solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 3,473 | $ 3,520 | $ 11,444 | $ 9,066 |
Acquisitions - Sprout (Details) $ / shares in Units, $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 03, 2021
USD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
segment
|
Dec. 31, 2021
USD ($)
|
|
Assets acquired: | |||
Goodwill | $ 67,156 | $ 45,295 | |
Liabilities assumed: | |||
Number of operating segments | segment | 1 | ||
Sprout | |||
Consideration Transferred: | |||
Cash consideration | $ 12,000 | ||
Share consideration | 19,186 | ||
Total consideration | 31,186 | ||
Assets acquired: | |||
Goodwill | 26,686 | ||
Total assets acquired | 31,286 | ||
Liabilities assumed: | |||
Other current liabilities | (100) | ||
Total net assets acquired | $ 31,186 | ||
Share consideration (in shares) | shares | 1,244,258 | ||
Share price (in dollars per share) | $ / shares | $ 15.42 | ||
Sprout | Software technology | |||
Assets acquired: | |||
Intangibles | $ 2,973 | ||
Sprout | Trade name | |||
Assets acquired: | |||
Intangibles | 217 | ||
Sprout | Customer relationships | |||
Assets acquired: | |||
Intangibles | $ 1,410 |
Acquisitions - Transport Logistics Holding (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 29, 2021
USD ($)
$ / shares
shares
|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
segment
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Estimated Assets Acquired: | |||||
Goodwill | $ 67,156 | $ 45,295 | |||
Holdback liability recognized in connection with acquisition | $ 98 | $ 1,000 | |||
Number of operating segments | segment | 1 | ||||
TLH | |||||
Consideration Transferred: | |||||
Cash consideration | $ 5,000 | ||||
Share consideration | 10,126 | ||||
Total consideration | 15,126 | ||||
Estimated Assets Acquired: | |||||
Goodwill | 14,648 | ||||
Total assets acquired | $ 15,126 | ||||
Holdback liability recognized in connection with acquisition | $ 1,000 | ||||
Share consideration (in shares) | shares | 694,540 | ||||
Share price (in dollars per share) | $ / shares | $ 14.58 | ||||
TLH | Software technology | |||||
Estimated Assets Acquired: | |||||
Intangibles | $ 249 | ||||
TLH | Trade name | |||||
Estimated Assets Acquired: | |||||
Intangibles | 59 | ||||
TLH | Customer relationships | |||||
Estimated Assets Acquired: | |||||
Intangibles | $ 170 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid insurance | $ 4,313 | $ 4,313 | $ 6,419 |
Prepaid marketing | 2,295 | 2,295 | 3,272 |
Prepaid software | 3,776 | 3,776 | 2,088 |
Other prepaid expenses and other current assets | 817 | 817 | 1,828 |
Prepaid expenses and other current assets | 11,201 | 11,201 | $ 13,607 |
Impairment loss | $ 800 | $ 800 |
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 7,405 | $ 4,298 |
Accrued employee expenses | 9,756 | 10,088 |
Other accrued liabilities | 7,064 | 8,769 |
Accounts payable and accrued expenses | 24,225 | 23,155 |
Short-term insurance premium financing | $ 3,000 | $ 4,200 |
Equity (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022
vote
shares
|
Sep. 30, 2022
vote
shares
|
Dec. 31, 2021
shares
|
Jun. 15, 2021
shares
|
|
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |
WMH Units | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interests, percent of outstanding units held | 39.90% | 39.90% | ||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Votes per share | vote | 1 | |||
Class V Common Stock | ||||
Class of Stock [Line Items] | ||||
Votes per share | vote | 1 |
Stock-based Compensation - Class P Units Activity (Details) - Class P Units |
9 Months Ended |
---|---|
Sep. 30, 2022
shares
| |
Number of Units | |
Outstanding beginning balance (in shares) | 25,660,529 |
Cancellations (in shares) | (48,807) |
Exchanged for Class A Common Stock (in shares) | (10,191,901) |
Outstanding ending balance (in shares) | 15,419,821 |
Vested (in shares) | 14,534,582 |
Stock-based Compensation - Stock-Based Compensation Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,639 | $ 4,192 | $ 17,250 | $ 23,625 |
Amount capitalized to software development | 337 | 695 | 1,266 | 695 |
Total stock-based compensation cost | 1,976 | 4,887 | 18,516 | 24,320 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 956 | 689 | 4,839 | 4,515 |
Product development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,065 | 1,865 | 3,993 | 3,859 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ (382) | $ 1,638 | $ 8,418 | $ 15,251 |
Related Party Transactions (Details) $ in Thousands |
3 Months Ended | 4 Months Ended | 9 Months Ended |
---|---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
|
Related Party Transaction [Line Items] | |||
Income on the sublease | $ 500 | $ 1,300 | |
Sublease Agreement | |||
Related Party Transaction [Line Items] | |||
Income on the sublease | $ 69 | ||
Amount due to the subtenant | 100 | $ 100 | 100 |
Sublease income, net | $ 200 | $ 200 |
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