UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
There were
MoneyLion Inc.
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended March 31, 2024
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Page |
PART I – FINANCIAL INFORMATION |
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Item 1. |
1 |
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1 |
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2 |
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Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity |
3 |
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4 |
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5 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
Item 3. |
33 |
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Item 4. |
34 |
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PART II - OTHER INFORMATION |
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Item 1. |
35 |
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Item 1A. |
37 |
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Item 2. |
37 |
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Item 3. |
37 |
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Item 4. |
37 |
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Item 5. |
37 |
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Item 6. |
39 |
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40 |
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i
INTRODUCTORY NOTE
General
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “MoneyLion,” the “Company,” “we,” “us,” “our” and similar references refer to MoneyLion Inc. and, as context requires, its consolidated subsidiaries. “MALKA” refers to Malka Media Group LLC, a wholly-owned subsidiary of MoneyLion Technologies Inc., and “Engine” refers to ML Enterprise Inc., doing business as the brand “Engine by MoneyLion,” a wholly-owned subsidiary of MoneyLion Technologies Inc. which was previously named “Even Financial Inc.” and subsequently renamed in February 2023.
For convenience, the trademarks and service marks referred to in this Quarterly Report on Form 10-Q are listed without the ®, TM and SM symbols, but we intend to assert, and notify others of, our rights in and to these trademarks and service marks to the fullest extent under applicable law.
Reverse Stock Split
On April 24, 2023, the Company amended the Company's Fourth Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) to effect, effective as of 5:01 p.m. Eastern Time on April 24, 2023, a 1-for-30 reverse stock split (the “Reverse Stock Split”) of the Class A common stock, par value $0.0001 per share (the “Class A Common Stock”). At the effective time of the Reverse Stock Split, every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock, and the total number of shares of Class A Common Stock authorized for issuance was reduced by a corresponding proportion from 2,000,000,000 shares to 66,666,666 shares. The Reverse Stock Split was approved by the Company's stockholders at a Special Meeting of Stockholders on April 19, 2023 and approved by the Board of Directors on April 21, 2023. The primary goal of the Reverse Stock Split was to increase the per share price of the Class A Common Stock in order to meet the minimum per share price requirement for continued listing on the New York Stock Exchange (the “NYSE”). The Class A Common Stock began trading on the NYSE on an as-adjusted basis on April 25, 2023 under the existing trading symbol “ML.”
In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of Class A Common Stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. Furthermore, proportionate adjustments were made to the conversion factor at which the Company’s previously outstanding Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), converted to Class A Common Stock. The total number of shares of preferred stock of the Company authorized for issuance remained at 200,000,000. Stockholders who would have been entitled to receive fractional shares as a result of the Reverse Stock Split were instead entitled to a cash payment in lieu thereof at a price equal to the fraction of one share to which the stockholder was otherwise entitled multiplied by the closing price per share of the Class A Common Stock on the NYSE on the effective date of the Reverse Stock Split.
The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10-Q for all periods presented.
ii
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the information incorporated herein by reference, contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of MoneyLion. These statements are based on the beliefs and assumptions of the management of MoneyLion. Although MoneyLion believes that its respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, MoneyLion cannot assure you that it will achieve or realize these plans, intentions or expectations. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” or “intends” or similar expressions. The forward-looking statements are based on projections prepared by, and are the responsibility of, MoneyLion’s management.
Forward-looking statements are inherently subject to known and unknown risks and uncertainties, many of which may be beyond MoneyLion’s control. Forward-looking statements are not guarantees of future performance or outcomes, and MoneyLion’s actual performance and outcomes, including, without limitation, actual results of operations, financial condition and liquidity, and the development of the market in which MoneyLion operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
iii
These and other factors are more fully discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2023, and Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
iv
Risk Factor Summary
Our business is subject to numerous risks and uncertainties, including those we face in connection with the successful implementation of our strategy and the growth of our business. The following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our securities and result in a loss of all or a portion of your investment:
v
The risks described above should be read together with the “Cautionary Statement Regarding Forward-Looking Statements” herein, the other risk factors set forth under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q, the “Risk Factors” section in the Annual Report on Form 10-K for the year ended December 31, 2023, our consolidated financial statements and the related notes presented in Part I, Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q and the other documents that we file with the SEC. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial.
vi
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MONEYLION INC.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands, except per share amounts)
(Unaudited)
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March 31, |
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December 31, |
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2024 |
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2023 |
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Assets |
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Cash |
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$ |
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$ |
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Restricted cash, including amounts held by variable interest entities (VIEs) of $ |
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Consumer receivables |
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Allowance for credit losses on consumer receivables |
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( |
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Consumer receivables, net, including amounts held by VIEs of $ |
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Enterprise receivables, net |
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Property and equipment, net |
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Intangible assets, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Liabilities: |
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Secured loans, net |
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$ |
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$ |
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Accounts payable and accrued liabilities |
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Warrant liability |
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Other debt, net, including amounts held by VIEs of $ |
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Other liabilities |
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Total liabilities |
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(Note 14) |
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Stockholders' equity: |
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Class A Common Stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Treasury stock at cost, |
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( |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
1
MONEYLION INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share amounts)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Revenue |
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Service and subscription revenue |
$ |
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$ |
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Net interest income on loan receivables |
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Total revenue, net |
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Operating expenses |
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Provision for credit losses on consumer receivables |
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Compensation and benefits |
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Marketing |
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Direct costs |
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Professional services |
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Technology-related costs |
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Other operating expenses |
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Total operating expenses |
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Net income (loss) before other (expense) income and income taxes |
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( |
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Interest expense |
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Change in fair value of warrant liability |
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( |
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Change in fair value of contingent consideration from mergers and acquisitions |
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— |
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Other income |
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Net income (loss) before income taxes |
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( |
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Income tax benefit |
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( |
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( |
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Net income (loss) |
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( |
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Accrual of dividends on preferred stock |
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— |
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( |
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Net income (loss) attributable to common shareholders |
$ |
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$ |
( |
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Net income (loss) per share, basic |
$ |
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$ |
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Net income (loss) per share, diluted |
$ |
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$ |
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Weighted average shares used in computing net income (loss) per share, basic |
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Weighted average shares used in computing net income (loss) per share, diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
2
MONEYLION INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(amounts in thousands, except share amounts)
(Unaudited)
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Total |
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Class A Common Stock |
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Additional |
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Accumulated |
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Treasury |
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Stockholders' |
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Shares |
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Amount |
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Paid-in Capital |
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Deficit |
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Stock |
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Equity |
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Balances at January 1, 2024 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings |
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— |
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( |
) |
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— |
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— |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Balances at March 31, 2024 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Redeemable Convertible |
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Total |
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Preferred Stock (Series A) |
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Class A Common Stock |
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Additional |
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Accumulated |
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Treasury |
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Stockholders' |
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Shares |
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Amount |
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Shares (1) |
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Amount (1) |
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Paid-in Capital(1) |
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Deficit |
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Stock |
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Equity |
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Balances at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock in connection with earnout and make-whole provisions related to the acquisition of Malka Media Group LLC |
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— |
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— |
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— |
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— |
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— |
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Issuance of options and preferred stock in connection with Engine Acquisition, net of working capital adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of preferred stock to common stock |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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Accrued dividends on preferred stock |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Other |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Balances at March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
3
MONEYLION INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net income (loss) |
$ |
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$ |
( |
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Adjustments to reconcile net income (loss) to net cash from operating activities: |
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Provision for losses on receivables |
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Depreciation and amortization expense |
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Change in deferred fees and costs, net |
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Change in fair value of warrants |
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( |
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Change in fair value of contingent consideration from mergers and acquisitions |
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— |
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( |
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Gain on foreign currency translation |
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( |
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( |
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Stock compensation expense |
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Deferred income taxes |
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( |
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Changes in assets and liabilities: |
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Accrued interest receivable |
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( |
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( |
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Enterprise receivables, net |
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( |
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( |
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Other assets |
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( |
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( |
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Accounts payable and accrued liabilities |
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( |
) |
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( |
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Other liabilities |
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( |
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( |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Net originations and collections of finance receivables |
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( |
) |
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( |
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Purchase of property and equipment and software development |
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( |
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( |
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Settlement of contingent consideration related to mergers and acquisitions |
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— |
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( |
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Net cash used in investing activities |
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( |
) |
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( |
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Cash flows from financing activities: |
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Net proceeds from (repayments to) special purpose vehicle credit facilities |
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( |
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Payments related to issuance of common stock related to exercise of stock options and warrants, net of tax withholdings related to vesting of stock-based compensation |
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( |
) |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Net change in cash and restricted cash |
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( |
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Cash and restricted cash, beginning of period |
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Cash and restricted cash, end of period |
$ |
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$ |
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Supplemental disclosure of cash flow information: |
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Cash paid for interest |
$ |
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$ |
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Supplemental disclosure of non-cash investing and financing activities: |
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Accrued dividends on preferred stock |
$ |
— |
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$ |
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Equity issued as consideration for mergers and acquisitions |
$ |
— |
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$ |
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Equity issued as settlement of contingent consideration related to Malka Acquisition |
$ |
— |
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$ |
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Lease liabilities incurred in exchange for operating right-of-use assets |
$ |
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$ |
— |
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The accompanying notes are an integral part of these consolidated financial statements.
4
MONEYLION INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share amounts or as otherwise indicated)
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
MoneyLion Inc. (“MoneyLion” or the “Company”) was founded in 2013 and is headquartered in New York, New York. On September 22, 2021, MoneyLion Inc., formerly known as Fusion Acquisition Corp., consummated a business combination (the “Business Combination”) with MoneyLion Technologies Inc., formerly known as MoneyLion Inc. Following the Business Combination, MoneyLion Inc. became a publicly traded company, with MoneyLion Technologies Inc. continuing the existing business operations as a subsidiary of MoneyLion Inc. MoneyLion Inc.’s Class A common stock, par value $
MoneyLion is a leader in financial technology, powering the next generation of personalized products and financial content for American consumers. MoneyLion designs and offers modern personal finance products, tools and features and curate money-related content that delivers actionable insights and guidance to its users. MoneyLion also operates and distributes embedded finance marketplace solutions that match consumers with personalized third-party offers from its partners, providing convenient access to an expansive breadth of financial solutions that enable consumers to borrow, spend, save and achieve better financial outcomes. In addition, MoneyLion provides creative media and brand content services to clients across industries through its media division and leverages its adaptive, in-house content studio to produce and deliver engaging and dynamic content in support of MoneyLion's product and service offerings.
Basis of Presentation—The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of MoneyLion Inc. and its wholly owned subsidiaries and consolidated variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. The Company does not have any items of other comprehensive income (loss); therefore, there is no difference between net income (loss) and comprehensive income (loss) for the three months ended March 31, 2024 and 2023.
Reverse Stock Split—On April 24, 2023, the Company amended the Company's Fourth Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) to effect, effective as of 5:01 p.m. Eastern Time on April 24, 2023, a
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In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of Class A Common Stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. Furthermore, proportionate adjustments were made to the conversion factor at which the Company’s previously outstanding Series A Convertible Preferred Stock, par value $
The effects of the Reverse Stock Split have been reflected in these consolidated financial statements and the accompanying footnotes for all periods presented, which includes adjusting the description of any activity that may have been transacted on a pre-Reverse Stock Split basis.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments and adjustments to eliminate intercompany transactions and balances, necessary for a fair presentation of its financial position and its results of operations, changes in redeemable convertible preferred stock and stockholders’ equity and cash flows.
The Company’s accounting policies are set forth in Note 2, “Summary of Significant Accounting Policies” of the Company’s Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Included herein are certain updates to those policies and the related disclosures.
Revenue Recognition and Related Receivables—The following table summarizes revenue by type for the three months ended March 31, 2024 and 2023:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Consumer revenues |
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Service and subscription fees |
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$ |
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$ |
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Net interest income on finance receivables |
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Total consumer revenues |
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Enterprise service revenues |
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Total revenue, net |
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$ |
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$ |
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Fair Value of Financial Instruments—Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.
Level 1 – Quoted prices in active markets for identical assets or liabilities.
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Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
The Company had
The Company also has financial instruments which are not measured at fair value. The Company has evaluated cash (Level 1), restricted cash (Level 1) and consumer receivables, net (Level 3) and believes the carrying value approximates the fair value due to the short-term nature of these balances. The carrying value of the secured loans approximates their fair value based on the relatively short duration these instruments have been outstanding and the secured loans' variable interest rate based on market rates. The carrying value of other debt approximates its fair value based on the relatively short duration these instruments have been outstanding and availability of alternative financing sources at similar interest rates with the same terms. The fair value of secured loans and other debt would be based on Level 2 fair value measurements.
Recently Adopted Accounting Pronouncements—The Company
Recently Issued Accounting Pronouncements Not Yet Adopted—The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012. Accordingly, the Company has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance.
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In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance expands the disclosures required for reportable segments in the Company's annual and interim consolidated financial statements, primarily through enhanced disclosures about significant segment expenses. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2025 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2026 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its income tax disclosures.
3. CONSUMER RECEIVABLES
The Company’s finance receivables consist of secured personal loans and principal amounts of Instacash advances. Secured loan principal balances are either partially or fully deposited into an escrow account upon origination with any remaining balance being given to the borrower. The funds in the escrow account may be used to pay the secured personal loan in full or can be released to the borrower once the secured personal loan is paid in full. Until such time, the funds in the escrow account may be collected by the Company in the event the borrower becomes contractually past due. Accrued interest receivables represent the interest accrued on the loan receivables based upon the daily principal amount outstanding except for loans that are on nonaccrual status.
The Company’s policy is to suspend recognition of interest income on secured personal loans and place the secured personal loan on nonaccrual status when the account is more than 60 days past due on a contractual basis or when, in the Company’s estimation, the collectability of the account is uncertain, and the account is less than 90 days contractually past due. The Company has elected to not measure an allowance for losses on accrued interest receivable. Any accrued interest receivable that becomes 90 days past due on a contractual basis is charged-off by reversing net interest income on loan receivables. Net charge-offs of accrued interest income were $
Fees receivable represent the amounts due to the Company for tips and instant transfer fees related to the Instacash earned wage access product. Subscription receivables represent the amounts billed to customers for subscription services.
The credit quality and future repayment of consumer receivables are dependent upon the customer’s ability to perform under the terms of the agreement. Factors such as unemployment rates and housing values, among others, may impact the customer’s ability to perform under the loan or Instacash advance terms though no direct correlation between charge-off rates and these factors has been identified in the Company's analysis. When assessing provision for losses on consumer receivables, the Company takes into account the composition and delinquency status of the outstanding consumer receivables and the related forecasted principal loss rates based on recent historical experience. Recent historical loss rates are updated on a quarterly basis. Charge-offs of consumer receivable balances occur after becoming 90 days past contractually due unless specific circumstances are identified on an individual or group of receivables that indicate charge-off is not appropriate. The level of exceptions to charge-offs occurring once 90 days past due is not material. Consumer receivable charge-offs typically occur within one year of origination. The tables below show consumer receivables balances as of March 31, 2024 and December 31, 2023 and the consumer receivables activity, charge-off rates and aging by product for the three months ended March 31, 2024 and 2023.
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Consumer receivables consisted of the following:
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March 31, |
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December 31, |
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2024 |
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2023 |
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Loan receivables |
$ |
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$ |
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Instacash receivables |
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Finance receivables |
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Fees receivable |
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Subscription receivables |
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Deferred loan origination costs |
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Accrued interest receivable |
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Consumer receivables, before allowance for credit losses |
$ |
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$ |
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Changes in the allowance for losses on loan receivables were as follows:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Beginning balance |
$ |
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$ |
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Provision for credit losses on receivables |
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Loan receivables charged off |
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( |
) |
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( |
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Recoveries |
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Ending balance |
$ |
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$ |
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Changes in the allowance for losses on Instacash receivables were as follows:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Beginning balance |
$ |
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$ |
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Provision for credit losses on receivables |
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Instacash receivables charged off |
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( |
) |
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( |
) |
Recoveries |
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Ending balance |
$ |
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$ |
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Changes in the allowance for losses on fees receivable were as follows:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Beginning balance |
$ |
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$ |
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Provision for credit losses on receivables |
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Fees receivable charged off |
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( |
) |
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( |
) |
Recoveries |
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Ending balance |
$ |
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$ |
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Changes in the allowance for losses on subscription receivables were as follows:
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Three Months Ended March 31, |
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2024 |
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2023 |
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Beginning balance |
$ |
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$ |
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Provision for credit losses on receivables |
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Subscription receivables charged off |
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( |
) |
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( |
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Recoveries |
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Ending balance |
$ |
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$ |
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9
The following is an assessment of the repayment performance of loan receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the loan receivables portfolio:
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March 31, 2024 |
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December 31, 2023 |
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Amount |
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Percent |
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Amount |
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Percent |
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Current |
$ |
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% |
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$ |
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% |
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Delinquency: |
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31 to 60 days |
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% |
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% |
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61 to 90 days |
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% |
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% |
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Total delinquency |
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% |
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% |
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Loan receivables before allowance for credit losses |
$ |
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% |
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$ |
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% |
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Loan receivables that are 61 to 90 days contractually past due are placed on non-accrual status.
The following is an assessment of the repayment performance of Instacash receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the Instacash receivables portfolio:
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March 31, 2024 |
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December 31, 2023 |
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Amount |
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Percent |
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Amount |
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Percent |
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Current |
$ |
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% |
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$ |
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% |
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Delinquency: |
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31 to 60 days |
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% |
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% |
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61 to 90 days |
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% |
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% |
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Total delinquency |
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% |
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% |
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Instacash receivables before allowance for credit losses |
$ |
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% |
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$ |
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% |
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The following is an assessment of the repayment performance of fees receivable as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the fees receivable portfolio:
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March 31, 2024 |
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December 31, 2023 |
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Amount |
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Percent |
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Amount |
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Percent |
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Current |
$ |
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% |
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$ |
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% |
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Delinquency: |
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31 to 60 days |
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% |
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% |
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61 to 90 days |
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% |
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% |
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Total delinquency |
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% |
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% |
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Fees receivable before allowance for credit losses |
$ |
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% |
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$ |
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% |
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10
The following is an assessment of the repayment performance of subscription receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the subscription receivables portfolio:
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March 31, 2024 |
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December 31, 2023 |
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Amount |
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Percent |
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Amount |
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Percent |
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Current |
$ |
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% |
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$ |
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% |
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Delinquency: |
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31 to 60 days |
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% |
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% |
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61 to 90 days |
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% |
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% |
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Total delinquency |
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% |
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% |
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Subscription receivables before allowance for credit losses |
$ |
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% |
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$ |
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% |
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4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
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March 31, |
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December 31, |
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2024 |
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2023 |
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Leasehold improvements |
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$ |
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$ |
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Furniture and fixtures |
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Computers and equipment |
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Less: accumulated depreciation |
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( |
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( |
) |
Property and equipment, net |
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$ |
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$ |
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Total depreciation expense related to property and equipment was $
5. INTANGIBLE ASSETS
Intangible assets consisted of the following:
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March 31, |
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December 31, |
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Useful Life |
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2024 |
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2023 |
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Proprietary technology and capitalized internal-use software |
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$ |
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$ |
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Work in process |
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Customer relationships |
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Trade names |
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Less: accumulated amortization |
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( |
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( |
) |
Intangible assets, net |
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$ |
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$ |
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The Company capitalizes certain internal-use software development costs, consisting primarily of contractor costs and employee salaries and benefits allocated to the software. Capitalization of costs incurred in connection with internally developed software commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Costs incurred for enhancements that are expected to result in additional functionalities are capitalized in a similar manner. Capitalization of costs ceases no later than the point at which the project is substantially complete and ready for its intended use, at which point amortization of capitalized costs begins. All other costs are expensed as incurred. Costs capitalized in connection with internal-use software were $
For the three months ended March 31, 2024 and 2023, total amortization expense was $
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The following table summarizes estimated future amortization expense of intangible assets placed in service at March 31, 2024 for the years ending:
Remainder of 2024 |
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$ |
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2025 |
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2026 |
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2027 |
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2028 |
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Thereafter |
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$ |
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6. OTHER ASSETS
Other assets consisted of the following:
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March 31, |
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December 31, |
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2024 |
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2023 |
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Receivable from payment processors |
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$ |
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$ |
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Prepaid expenses |
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Other |
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Total other assets |
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$ |
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$ |
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7. DEBT
The Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:
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March 31, |
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December 31, |
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2024 |
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2023 |
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Monroe Term Loans |
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$ |
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$ |
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Unamortized discounts and debt issuance costs |
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( |
) |
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( |
) |
Total secured loans, net |
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$ |
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$ |
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ROAR 1 SPV Credit Facility |
|
$ |
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$ |
|
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ROAR 2 SPV Credit Facility |
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Unamortized discounts and debt issuance costs |
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( |
) |
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( |
) |
Total other debt, net |
|
$ |
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$ |
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For more information regarding debt instruments outstanding as of December 31, 2023, see Note 7, “Debt” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Monroe Term Loans—The Monroe Term Loans (as defined below) are comprised of term loans with a principal balance of $
Other Debt—In September 2021, ROAR 1 SPV Finance LLC, an indirect wholly owned subsidiary of the Company (the “ROAR 1 SPV Borrower”), entered into a $
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8. LEASES
The Company is party to operating leases for all of its offices. Many leases contain options to
Maturities of the Company’s long-term operating lease liabilities, which are included in on the consolidated balance sheet, were as follows:
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March 31, 2024 |
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Remainder of 2024 |
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$ |
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2025 |
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2026 |
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2027 |
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2028 |
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Thereafter |
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Total lease payments |
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Less: imputed interest |
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$ |
|
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Weighted-average remaining lease term (years) |
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Weighted-average discount rate |
|
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% |
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9. INCOME TAXES
In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at the interim period. The effective tax rate for the three months ended March 31, 2024 was -
10. COMMON AND PREFERRED STOCK
Class A Common Stock—Each holder of the shares of Class A Common Stock is entitled to
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 MoneyLion’s Board of Directors out of funds legally available therefor.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of MoneyLion’s affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of MoneyLion’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.
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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 MoneyLion may issue in the future.
Series A Preferred Stock—Prior to the Automatic Conversion Event (as described below), the Company had shares of Series A Preferred Stock outstanding. Holders of the shares of Series A Preferred Stock (other than certain regulated holders subject to the Bank Holding Company Act of 1956, as amended) were entitled to vote as a single class with the holders of the Class A Common Stock and the holders of any other class or series of capital stock of MoneyLion then entitled to vote.
Holders of the Series A Preferred Stock were entitled to a 30 cent cumulative annual dividend per share, payable at the Company’s election in either cash or Class A Common Stock (or a combination thereof), with any dividends on the Class A Common Stock valued based on the per share volume-weighted average price of the shares of Class A Common Stock on the NYSE for the 20 trading days ending on the trading day immediately prior to the dividend payment date.
Holders of the Series A Preferred Stock were entitled to a liquidation preference in the event of the Company's liquidation equal to the greater of $
As of the close of trading on the NYSE on May 26, 2023, the per share volume-weighted average price of the shares of Class A Common Stock on the NYSE equaled or exceeded $
On June 30, 2023, the Company paid the accrued annual dividend on the previously outstanding shares of Series A Preferred Stock for the dividend payment period ending December 31, 2022 to all holders of record as of the applicable dividend record date (the “2022 Annual Dividend”). The 2022 Annual Dividend was paid in a mixture of Class A Common Stock and cash through the issuance of
11. STOCK-BASED COMPENSATION
Omnibus Incentive Plan
At the Company's 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”), Company stockholders approved the Company's Amended and Restated Omnibus Incentive Plan (as may be amended or restated from time to time, the “Incentive Plan”), as further described in the Company's Definitive Proxy Statement for the 2022 Annual Meeting, filed with the SEC on April 29, 2022.
Stock-based compensation of $
14
The number of units awarded under the Incentive Plan are generally based on a weighted average of the Class A Common Stock in the days leading up to the grant. Fair values for restricted stock units (“RSUs”) and performance stock units (“PSUs”) based on the Company’s operating performance are valued based on the price of the Class A Common Stock at the time of grant. Fair values for options are calculated using a Black-Scholes option pricing model and PSUs with market conditions are fair valued using a Monte Carlo simulation model. The following table represents activity within the Incentive Plan for the three months ended March 31, 2024:
Type |
|
Vesting Conditions |
|
Units Granted |
|
|
Weighted Average Grant Date Fair Value |
|
|
Weighted Average Strike Price |
||
Restricted Stock Unit |
|
|
|
|
|
$ |
|
|
n/a |
|||
Performance Stock Unit |
|
|
|
|
|
$ |
|
|
n/a |
|||
The following table represents outstanding equity awards as of March 31, 2024:
Type |
|
Vesting Conditions |
|
Units Outstanding |
|
|
Weighted Average Grant Date Fair Value |
|
|
Weighted Average Strike Price |
|
|||
Restricted Stock Unit |
|
|
|
|
|
$ |
|
|
n/a |
|
||||
Performance Stock Unit |
|
|
|
|
|
$ |
|
|
n/a |
|
||||
Performance Stock Unit |
|
|
|
|
|
$ |
|
|
n/a |
|
||||
Options |
|
|
|
|
|
$ |
|
|
$ |
|
||||
12. STOCK WARRANTS
Public Warrants and Private Placement Warrants
As a result of the Business Combination, MoneyLion acquired from Fusion Acquisition Corp., as of September 22, 2021, public warrants outstanding to purchase an aggregate of
The Public Warrants meet the conditions for equity classification in accordance with ASC 815-40. At the time of the Business Combination, the Public Warrants assumed by the Company were recorded at fair value within additional paid-in capital in the amount of $
The Private Placement Warrants are valued based on the per warrant price of the Public Warrants, subject to adjustments to account for differences in contractual terms between the Private Placement Warrants and the Public Warrants. The per warrant price of the Public Warrants as of March 31, 2024 was $
The following table presents the changes in the liability related to the Private Placement Warrants:
|
|
Private Placement |
|
|
|
|
Warrants |
|
|
Warrants payable balance, December 31, 2023 |
|
$ |
|
|
Mark-to-market adjustment |
|
|
( |
) |
Warrants payable balance, March 31, 2024 |
|
$ |
|
|
For more information regarding the Public Warrants and Private Placement Warrants, see Note 12, “Stock Warrants” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
15
13. NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of net income (loss) per share of Class A Common Stock for the three months ended March 31, 2024 and 2023:
|
Three Months Ended March 31, |
|
|||||
|
2024 |
|
|
2023 |
|
||
Numerator: |
|
|
|
|
|
||
Net income (loss) |
$ |
|
|
$ |
( |
) |
|
Accrual of dividends on preferred stock |
|
— |
|
|
|
( |
) |
Net income (loss) attributable to common shareholders |
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Denominator: |
|
|
|
|
|
||
Weighted-average common shares outstanding - basic |
|
|
|
|
|
||
Plus: dilutive effect of common stock equivalents |
|
|
|
|
— |
|
|
Weighted-average common shares outstanding - diluted |
|
|
|
|
|
||
Net income (loss) per share attributable to common stockholders - basic |
$ |
|
|
$ |
( |
) |
|
Net income (loss) per share attributable to common stockholders - diluted |
$ |
|
|
$ |
( |
) |
|
For the three months ended March 31, 2024,
For the three months ended March 31, 2023, the Company’s potentially dilutive securities, which include stock options, RSUs, PSUs, preferred stock, the rights to receive Earnout Shares and warrants to purchase shares of common stock, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same for the three months ended March 31, 2023.
The following potential shares of Class A Common Stock have been excluded from the computation of diluted net income (loss) per share for the three months ended March 31, 2024 and 2023:
|
March 31, |
|
|||||
|
2024 |
|
|
2023 |
|
||
Conversion of convertible preferred stock |
|
— |
|
|
|
|
|
Warrants to purchase common stock |
|
|
|
|
|
||
PSUs, RSUs and options to purchase common stock |
|
|
|
|
|
||
Right to receive Earnout Shares |
|
|
|
|
|
||
Total common stock equivalents |
|
|
|
|
|
||
In connection with the Business Combination, rights to receive Class A Common Stock (the “Earnout Shares”) were issued, with the right to receive Class A Common Stock contingent upon the Class A Common Stock reaching certain price milestones.
16
14. COMMITMENTS AND CONTINGENCIES
Legal Matters—From time to time, the Company is subject to various claims and legal proceedings in the ordinary course of business, including lawsuits, arbitrations, class actions and other litigation. The Company is also the subject of various actions, inquiries, investigations and proceedings by regulatory and other governmental agencies. The outcome of any such legal and regulatory matters, including those discussed in this Note 14, is inherently uncertain, and some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, which could materially and adversely impact the Company's business, financial condition, operating results and cash flows. See Part I, Item 1A “Risk Factors — Risks Relating to Legal and Accounting Matters — Unfavorable outcomes in legal proceedings may harm our business, financial condition, results of operations and cash flows” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
The Company has determined, based on its current knowledge, that the aggregate amount or range of losses that are estimable with respect to its legal proceedings, including the matters described below, would not have a material adverse effect on its business, financial position, results of operations or cash flows. As of March 31, 2024, amounts accrued were not material. Notwithstanding the foregoing, the ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. It is possible that an adverse outcome of any matter could be material to the Company's business, financial position, results of operations or cash flows as a whole for any particular reporting period of occurrence. In addition, it is possible that a matter may prompt litigation or additional investigations or proceedings by other government agencies or private litigants.
The Company holds a number of state licenses in connection with its business activities, and must also comply with other applicable compliance and regulatory requirements in the states where it operates. In most states where the Company operates, one or more regulatory agencies have authority with respect to regulation and enforcement of the Company's business activities under applicable state laws, and the Company may also be subject to the supervisory and examination authority of such state regulatory agencies. Examinations by state regulators have and may continue to result in findings or recommendations that require the Company, among other potential consequences, to provide refunds to customers or to modify its internal controls and/or business practices.
In the ordinary course of its business, the Company is and has been from time to time subject to, and may in the future be subject to, governmental and regulatory examinations, information requests, investigations and proceedings (both formal and informal) in connection with various aspects of its activities by state agencies, certain of which could result in adverse judgments, settlements, fines, penalties, restitution, disgorgement, injunctions or other relief. The Company has responded to and cooperated with the relevant state agencies and will continue to do so in the future, as appropriate.
On September 29, 2022, the Consumer Financial Protection Bureau (the “CFPB”) initiated a civil action in the United States District Court for the Southern District of New York (“SDNY”) against MoneyLion Technologies Inc., ML Plus LLC and the Company's 38 state lending subsidiaries, alleging violations of the Military Lending Act and the Consumer Financial Protection Act. The CFPB is seeking injunctive relief, redress for allegedly affected consumers and civil monetary penalties. On January 10, 2023, the Company moved to dismiss the lawsuit, asserting various constitutional and merits-based arguments. On June 13, 2023, the CFPB filed its first amended complaint, alleging substantially similar claims as those asserted in its initial complaint. On July 11, 2023, the Company moved to dismiss the lawsuit, again asserting various constitutional and merit-based arguments. On October 9, 2023, the Company moved for a stay of the action pending a decision from the United States Supreme Court in CFPB v. Community Financial Services Association of America, Ltd., No. 22-448 (U.S. argued Oct. 3, 2023) (“CFSA”). On December 1, 2023, the Court issued an order granting the Company’s motion and staying the action pending the United State Supreme Court’s decision in CFSA. The Company continues to maintain that the CFPB’s claims are meritless and is vigorously defending against the lawsuit. Nevertheless, at this time, the Company cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on its business, financial condition, results of operations or cash flows.
17
On July 21, 2023, Jeffrey Frommer, Lyusen Krubich, Daniel Fried and Pat Capra, the former equity owners of MALKA (collectively, the “Seller Members”), brought a civil action in the SDNY against MoneyLion Technologies Inc. alleging, among other things, breaches of the Membership Interest Purchase Agreement (the “MIPA”) governing the acquisition of MALKA (the “MALKA Acquisition”). Among other claims, the Seller Members allege that they are entitled to payment of $
On July 27, 2023, MassMutual Ventures US II LLC, Canaan X L.P., Canaan XI L.P., F-Prime Capital Partners Tech Fund LP and GreatPoint Ventures Innovation Fund II, L.P., each of which are former equityholders of Even Financial Inc. and former holders of the Company’s Series A Preferred Stock (collectively, the “Former Preferred Stockholders”), brought a civil action in the SDNY against MoneyLion Inc., its Board of Directors and certain officers seeking declaratory relief and related damages. The Former Preferred Stockholders allege that the
15. MERGERS AND ACQUISITIONS
Engine—On February 17, 2022, the Company completed the acquisition of all voting interest in Even Financial Inc., which was subsequently renamed to Engine. Engine powers the leading embedded finance marketplace solutions MoneyLion offers to its Enterprise Partners through which consumers are connected and matched with real-time, personalized financial product and service recommendations.
At the closing of the Engine Acquisition, the equityholders and advisors of Even Financial Inc. were entitled to receive a payment from the Company of up to an aggregate of
The $
18
In May 2023, the Earnout was settled through the issuance of
MALKA—On November 15, 2021, MoneyLion completed the MALKA Acquisition. MALKA is a creator network and content platform that provides digital media and content production services to us and to its own clients in entertainment, sports, gaming, live streaming and other sectors.
The unsettled restricted shares payable relating to the MALKA Acquisition earnout and the related make-whole were settled as of March 31, 2023. The $
16. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through May 7, 2024, the date on which these consolidated financial statements were available to be issued, and concluded no subsequent events were required to be disclosed.
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of MoneyLion and is intended to help the reader understand MoneyLion, our operations and our present business environment. This discussion should be read in conjunction with MoneyLion’s unaudited consolidated financial statements and notes to those financial statements included in Part I, Item 1 “Financial Statements” within this Quarterly Report on Form 10-Q. References to “we,” “us,” “our,” “Company” or “MoneyLion” refer to MoneyLion Inc. and, as context requires, its wholly-owned subsidiaries.
Overview
MoneyLion is a leader in financial technology, powering the next generation of personalized products and financial content for American consumers. MoneyLion was founded in 2013 with a vision to rewire the financial system. Our mission is to give everyone the power to make their best financial decisions. We believe that the financial wellness gap in America can be addressed by bridging the financial literacy and the financial access gaps, shortening the distance between education and action.
We design and offer modern personal finance products, tools and features and curate money-related content that delivers actionable insights and guidance to our users. We also operate and distribute embedded finance marketplace solutions that match consumers with personalized third-party offers from our partners, providing convenient access to an expansive breadth of financial solutions that enable consumers to borrow, spend, save and achieve better financial outcomes. Our leading marketplace solutions provide valuable distribution, acquisition, growth and monetization channels for our partners. In addition, we provide creative media and brand content services to clients across industries through our media division and leverage our adaptive, in-house content studio to produce and deliver engaging and dynamic content in support of our product and service offerings.
We have purposefully built our platform to help consumers navigate all of their financial inflection points, combining our deep first-party product expertise, engaging content, marketplaces, innovative technology, data and AI capabilities to create the ultimate marketplace solution. As of March 31, 2024, we had 15.5 million Total Customers who used 25.3 million Total Products and over 1,100 Enterprise Partners in our network. We strategically employ comprehensive, data-driven analytics and cutting-edge technology to enhance our platform, creating personalized experiences for our users based on our rich datasets. Utilizing innovative approaches to financial guidance that engage and educate our users within a peer community, we seek to empower consumers to take control of their financial lives.
In our Consumer business, we primarily earn revenue as follows:
20
In our Enterprise business, we primarily earn revenue, reflected in enterprise service revenues, as follows:
Factors Affecting Our Performance
We are subject to a number of risks including, but not limited to, the need for successful development of products, services and functionality; the need for additional capital (or financing) to fund operating losses; competition with substitute products and services from larger companies; protection of proprietary technology and information; dependence on key individuals; and risks associated with changes in information technology. For additional information, see the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2023.
New Customer and Client Growth and Increasing Usage Across Existing Customers and Clients
Our ability to effectively acquire new customers and clients through our acquisition and marketing efforts and drive usage of our products and services across our existing customers and clients is key to our growth, particularly as a significant portion of the revenue we generate in our business is derived from transaction-based fees. We believe our customers’ experience is enhanced by using our full suite of first-party financial products and services, complemented by the full spectrum of offers available in our marketplace, as we can better tailor the insights and recommendations we provide to them. In order to grow our business, we must engage and retain customers and continue to expand their use of our platform by cross-selling additional functionality, products and services to them. In our Enterprise business, we are dependent in part on our relationships with our Enterprise Partners, and any failure to effectively match consumers leads from our Channel Partners with product and service offerings from our Product Partners, or any reduced marketing spend by such Product Partners on our Enterprise platform, could adversely affect our business and results of operations.
Expansion and Innovation of Products, Services and Functionality
We will continue to invest in expanding and enhancing the products, services and functionality available through our platform for our customers and clients. Our ability to expand, enhance and sell additional functionality, products and services to our existing customers and clients may require more sophisticated and costly development, sales or engagement efforts. Any factors that impair our ability to do so may negatively impact our efforts towards retaining and attracting customers and clients.
21
General Economic and Market Conditions
Our performance is impacted by the relative strength of the overall economy, market volatility, consumer spending behavior and consumer demand for financial products and services. For example, with respect to our Consumer business, the willingness of our customers to spend, invest or borrow may fluctuate with their level of disposable income. Other factors such as interest rate fluctuations or monetary policies may also impact our customers’ behavior and our own ability to fund Instacash advances and loan volume. In addition, in our Enterprise business, adverse macroeconomic conditions, such as significant tightening of credit markets, may cause our Product Partners to reduce their marketing spend or advertising on our platform or may cause a reduction in client spending in our media division, which could adversely affect our business and results of operations.
Seasonality
We may experience seasonal fluctuations in our revenue. During the fourth quarter, revenue in our Consumer business may benefit from increased consumer spending during the holiday season, which may increase demand for our advance product as consumers seek additional liquidity. During the first quarter, we may see stronger collections on Instacash receivables resulting in a relatively lower provision for credit losses on consumer receivables as a result of the impact of tax refunds, as well as stronger demand for our banking and investment products and services. Seasonal trends may be superseded by market or macroeconomic events, which can have a significant impact on our business, as described above.
Competition
We compete across our business lines with a variety of competitors, including traditional banks and credit unions; new entrants obtaining banking licenses; non-bank digital providers offering banking-related services; specialty finance and other non-bank digital providers offering consumer lending-related or earned wage access products; digital wealth management platforms such as robo-advisors offering consumer investment services and other brokerage-related services; and digital financial platform, embedded finance and marketplace competitors, which aggregate and connect consumers to financial product and service offerings. In addition to competing for customers for our product and service offerings, we also compete to attract viewership of the content to which we connect customers, as there are other sources of financial-related content and news, many of which are more established and have a larger subscriber base. Furthermore, we compete with other advertising agencies and other service providers to attract marketing budget spending from our Enterprise clients. With respect to our media division, we compete with others in the digital media and content creation industry, which range from large and established media companies, including social media companies, advertising agencies and production studios, to emerging start-ups. We expect our competition to continue to increase. The success of our business depends on our ability to compete effectively and attract new and retain existing customers and clients, which depends upon many factors both within and beyond our control.
Pricing of Our Products and Services
We derive a substantial portion of our revenue from fees earned from our products and services. The fees we earn are subject to a variety of external factors such as competition, interchange rates and other macroeconomic factors, such as interest rates and inflation, among others. We may provide discounts or other incentives and rewards that we pay to customers who utilize multiple products and services to expand usage of our platform. We may also lower pricing on our products and services to acquire new customers. As the market for our platform matures, or as new or existing competitors introduce new products, services or functionality that compete with ours, we may experience pricing pressure and be unable to retain current customers and clients and attract new customers and clients at prices that are consistent with our pricing model and operating budget. Our pricing strategy may prove to be unappealing to our customers and clients, and our competitors could choose to bundle certain products and services competitive with ours. If this were to occur, it is possible that we would have to change our pricing strategies or reduce our prices, which could adversely affect our business.
22
Product and Service Mix
We offer various products and services on our platform, including our core suite of first-party financial products and services, a broad range of financial and non-financial offers in our Consumer Marketplace and embedded finance marketplace solutions and Media Services in our Enterprise business. Each product and service has a different profitability profile. The relative usage of products and services with high or low profitability and their lifetime value could have an impact on our performance.
Access and Cost of Financing
Our credit products, earned wage access product and other receivables are primarily financed by special purpose vehicle financings from third-party institutional lenders. The loss of one or more of the financing sources we have for our credit products, earned wage access product and other receivables could have an adverse impact on our performance, and it could be costly to obtain new financing.
Key Performance Metrics
We regularly review several metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Total Customers
We define Total Customers as the cumulative number of customers that have opened at least one account, including banking, membership subscription, secured personal loan, Instacash advance, managed investment account, cryptocurrency account and customers that are monetized through our marketplace and affiliate products. Total Customers also include customers that have submitted for, received or clicked on at least one marketplace loan offer. We consider Total Customers to be a key performance metric as it can be used to understand lifecycle efforts of our customers, as we look to cross-sell products to our customer base and grow our platform. Total Customers were 15.5 million and 7.8 million as of March 31, 2024 and 2023, respectively.
Total Products
We define Total Products as the total number of products that our Total Customers have opened, including banking, membership subscription, secured personal loan, Instacash advance, managed investment account, cryptocurrency account and monetized marketplace and affiliate products, as well as customers who signed up for our financial tracking services (with either credit tracking enabled or external linked accounts), whether or not the customer is still registered for the product. Total Products also include marketplace loan offers that our Total Customers have submitted for, received or clicked on through our marketplace. If a customer has funded multiple secured personal loans or Instacash advances or opened multiple products through our marketplace, it is only counted once for each product type. We consider Total Products to be a key performance metric as it can be used to understand the usage of our products across our customer base. Total Products were 25.3 million and 14.7 million as of March 31, 2024 and 2023, respectively.
Enterprise Partners
Enterprise Partners is comprised of Product Partners and Channel Partners. We define Product Partners as providers of the financial and non-financial products and services that we offer in our marketplaces, including financial institutions, financial services providers and other affiliate partners. We define Channel Partners as organizations that allow us to reach a wide base of consumers, including but not limited to news sites, content publishers, product comparison sites and financial institutions. Enterprise Partners were 1,181 as of March 31, 2024, comprising 555 Product Partners and 626 Channel Partners, and 1,085 as of March 31, 2023, comprising 494 Product Partners and 591 Channel Partners.
23
Total Originations
We define Total Originations as the dollar volume of the secured personal loans originated and Instacash advances funded within the stated period. We consider Total Originations to be a key performance metric as it can be used to measure the usage and engagement of the customers across our secured personal lending product and Instacash earned wage access product and is a significant driver of net interest income on finance receivables and service and subscription fees. Total Originations were $717 million and $506 million for the three months ended March 31, 2024 and 2023, respectively. All originations were originated directly by MoneyLion.
Adjusted EBITDA (Non-GAAP Measure)
Management believes Adjusted EBITDA, a non-U.S. GAAP measure, provides relevant and useful information to investors regarding the performance of the company. Refer to the “— Non-GAAP Measures” section below for further discussion of Adjusted EBITDA.
Results of Operations for the Three Months Ended March 31, 2024 and 2023
Revenues
The following table is reference for the discussion that follows:
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(In thousands, except for percentages) |
|
|||||||||||||
Consumer revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service and subscription fees |
|
$ |
85,209 |
|
|
$ |
62,438 |
|
|
$ |
22,771 |
|
|
|
36.5 |
% |
Net interest income on finance receivables |
|
|
2,933 |
|
|
|
2,928 |
|
|
|
5 |
|
|
|
0.2 |
% |
Total consumer revenues |
|
|
88,142 |
|
|
|
65,366 |
|
|
|
22,776 |
|
|
|
34.8 |
% |
Enterprise service revenues |
|
|
32,864 |
|
|
|
28,303 |
|
|
|
4,561 |
|
|
|
16.1 |
% |
Total revenue, net |
|
$ |
121,006 |
|
|
$ |
93,669 |
|
|
$ |
27,337 |
|
|
|
29.2 |
% |
We generate revenue primarily from various product-related fees, providing membership subscriptions, performing enterprise services and originating loans.
Service and subscription fees
Service and subscription fees increased by $22.8 million, or 36.5%, to $85.2 million for the three months ended March 31, 2024, as compared to $62.4 million for the same period in 2023. The increase in service and subscription fees was primarily driven by increases in fee income related to instant transfer fees and tips from Instacash of $21.4 million, driven by the growth of Instacash advances across both existing and new customers, an increase of $0.8 million driven by higher membership revenues, and an increase of $0.6 million related to interchange, cardholder and administration fees from our bank and investment accounts, driven by higher payment volume.
Net interest income on finance receivables
Net interest income on finance receivables is generated by interest earned on Credit Builder Loans, which is partially offset by the amortization of loan origination costs.
Net interest income on finance receivables remained stable at $2.9 million for the three months ended March 31, 2024 and 2023. This was driven by a reduction in average outstanding Credit Builder Loans, which was fully offset by a reduction in the amortization of deferred loan costs.
24
Enterprise service revenues
Enterprise service revenues increased by $4.6 million, or 16.1%, to $32.9 million for the three months ended March 31, 2024, as compared to $28.3 million for the same period in 2023. This increase was primarily attributable to $7.6 million of higher marketplace revenues reflected in the three months ended March 31, 2024, which was partially offset by $3.0 million of lower media revenues driven by the decision to exit certain non-core business functions.
25
Operating Expenses
The following table is reference for the discussion that follows:
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(In thousands, except for percentages) |
|
|||||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses on consumer receivables |
|
$ |
20,230 |
|
|
$ |
16,511 |
|
|
$ |
3,719 |
|
|
|
22.5 |
% |
Compensation and benefits |
|
|
24,786 |
|
|
|
24,408 |
|
|
|
378 |
|
|
|
1.5 |
% |
Marketing |
|
|
10,866 |
|
|
|
6,392 |
|
|
|
4,474 |
|
|
|
70.0 |
% |
Direct costs |
|
|
31,389 |
|
|
|
29,802 |
|
|
|
1,587 |
|
|
|
5.3 |
% |
Professional services |
|
|
5,766 |
|
|
|
4,999 |
|
|
|
767 |
|
|
|
15.3 |
% |
Technology-related costs |
|
|
6,586 |
|
|
|
6,038 |
|
|
|
548 |
|
|
|
9.1 |
% |
Other operating expenses |
|
|
10,320 |
|
|
|
8,995 |
|
|
|
1,325 |
|
|
|
14.7 |
% |
Total operating expenses |
|
$ |
109,943 |
|
|
$ |
97,145 |
|
|
$ |
12,798 |
|
|
|
13.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
$ |
(6,817 |
) |
|
$ |
(7,511 |
) |
|
$ |
694 |
|
|
|
-9.2 |
% |
Change in fair value of warrant liability |
|
|
81 |
|
|
|
(149 |
) |
|
|
230 |
|
|
nm |
|
|
Change in fair value of contingent consideration from mergers and acquisitions |
|
|
— |
|
|
|
246 |
|
|
|
(246 |
) |
|
|
-100.0 |
% |
Other income |
|
|
2,359 |
|
|
|
1,649 |
|
|
|
710 |
|
|
|
43.1 |
% |
Total other expense |
|
$ |
(4,377 |
) |
|
$ |
(5,765 |
) |
|
$ |
1,388 |
|
|
|
-24.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax benefit |
|
$ |
(389 |
) |
|
$ |
(24 |
) |
|
$ |
(365 |
) |
|
|
1,520.8 |
% |
Our operating expenses consist of the following:
Provision for credit losses on consumer receivables
Provision for credit losses on consumer receivables consists of amounts charged during the period to maintain an allowance for credit losses. The allowance represents management’s estimate of the credit losses in our consumer receivable portfolio and is based on management’s assessment of many factors, including changes in the nature, volume and risk characteristics of the consumer receivables portfolio, including trends in delinquency and charge-offs and current economic conditions that may affect the customer’s ability to pay.
Provision for credit losses on consumer receivables increased by $3.7 million, or 22.5%, to $20.2 million for the three months ended March 31, 2024, as compared to $16.5 million for the same period in 2023. This increase resulted primarily from an increase to the provision related to Instacash advance receivables of $7.5 million, which was partially offset by a decrease in the provision related to Credit Builder Loan receivables of $1.2 million and a decrease in the provision for Instacash instant transfer fees and tips of $2.6 million.
26
Compensation and benefits
Compensation and benefits increased by $0.4 million, or 1.5%, to $24.8 million for the three months ended March 31, 2024, as compared to $24.4 million for the same period in 2023. This increase was driven primarily by a $0.8 million increase in stock-based compensation, $0.5 million of higher annual bonus and commissions driven by company performance and $0.2 million of higher severance costs, which was partially offset by $0.7 million of higher software capitalization and $0.4 million of lower employee costs as a result of lower headcount for the three months ended March 31, 2024.
Marketing
Marketing increased by $4.5 million, or 70.0%, to $10.9 million for the three months ended March 31, 2024, as compared to $6.4 million for the same period in 2023. This increase resulted primarily from higher spend on advertising through digital platforms.
Direct costs
Direct costs increased by $1.6 million, or 5.3%, to $31.4 million for the three months ended March 31, 2024, as compared to $29.8 million for the same period in 2023. The increase was primarily driven by $3.2 million of direct costs related to the growth of Enterprise Marketplace revenues, an increase in payment processing and bank partner fees of $0.3 million and an increase in origination expenses of $0.3 million, driven by growth in Total Originations and Total Customers, which was partially offset by a $2.2 million decrease in direct costs in our Media Services business as a result of lower revenues.
Professional services
Professional services increased by $0.8 million, or 15.3%, to $5.8 million for the three months ended March 31, 2024, as compared to $5.0 million for the same period in 2023. This increase resulted primarily from an increase in recruiting spend of $0.3 million, an increase in legal expenses of $0.3 million and an increase in outside consulting spend of $0.2 million.
Technology-related costs
Technology-related costs increased by $0.5 million, or 9.1%, to $6.6 million for the three months ended March 31, 2024, as compared to $6.0 million for the same period in 2023. The increase was primarily driven by an increase in costs related to other technology services of $0.3 million and an increase in depreciation and amortization related to equipment and software of $0.2 million.
Other operating expenses
Other operating expenses increased by $1.3 million, or 14.7%, to $10.3 million for the three months ended March 31, 2024, as compared to $9.0 million for the same period in 2023. The increase was primarily driven by a $3.1 million increase in expenses related to processing transactions in our Consumer business, which was partially offset by a decrease in the provision for bad debts in our Enterprise business of $0.7 million and a decrease in insurance expenses of $0.6 million.
Our other (expense) income consists of the following:
Interest expense
Interest expense decreased by $0.7 million, or 9.2%, to $6.8 million for the three months ended March 31, 2024, as compared to $7.5 million for the same period in 2023. This decrease resulted from a reduction in average outstanding debt balances for the three months ended March 31, 2024, as compared to the same period in 2023. See Part I, Item 1 “Financial Statements — Debt” for more information.
27
Change in fair value of warrant liability
Change in fair value of warrant liability was a benefit of $0.1 million for the three months ended March 31, 2024, as compared to an expense of $0.1 million for the same period in 2023. The change in fair value of warrant liability was due to changes in inputs that drive the warrant liability fair value calculations.
Change in fair value of contingent consideration from mergers and acquisitions
There was no change in fair value of contingent consideration from mergers and acquisitions for the three months ended March 31, 2024, as compared to a benefit of $0.2 million for the same period in 2023. The lack of activity during the three months ended March 31, 2024 was driven by the settlement of contingencies related to the contingent consideration that were unsettled during the three months ended March 31, 2023.
Other income
Other income increased by $0.7 million to other income of $2.4 million for the three months ended March 31, 2024, as compared to other expense of $1.6 million for the same period in 2023. The increase in other income was primarily driven by an increase in interest income from interest bearing deposit accounts.
Income tax benefit
See Part I, Item 1 “Financial Statements — Income Taxes” for an explanation of the tax activity recorded during the three months ended March 31, 2024.
Non-GAAP Measures
In addition to net income (loss), which is a measure presented in accordance with U.S. GAAP, management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in our industry in assessing performance. Adjusted EBITDA is a supplemental measure of our performance that is neither required by nor presented in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as a substitute for U.S. GAAP metrics such as net income (loss) or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to similar measures used by other companies.
We define Adjusted EBITDA as net income (loss) plus interest expense related to corporate debt, income tax expense (benefit), depreciation and amortization expense, change in fair value of warrant liability, change in fair value of contingent consideration from mergers and acquisitions, goodwill impairment loss, stock-based compensation expense and certain other expenses that management does not consider in measuring performance. We believe that Adjusted EBITDA provides a meaningful understanding of an aspect of profitability based on our current product portfolio. In addition, Adjusted EBITDA is useful to an investor in evaluating our performance because it:
28
The reconciliation of net income (loss) to Adjusted EBITDA for the three months ended March 31, 2024 and 2023 is as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net income (loss) |
|
$ |
7,075 |
|
|
$ |
(9,217 |
) |
Add back: |
|
|
|
|
|
|
||
Interest related to corporate debt1 |
|
|
2,795 |
|
|
|
3,560 |
|
Income tax benefit |
|
|
(389 |
) |
|
|
(24 |
) |
Depreciation and amortization expense |
|
|
6,212 |
|
|
|
6,184 |
|
Changes in fair value of warrant liability |
|
|
(81 |
) |
|
|
149 |
|
Change in fair value of contingent consideration from mergers and acquisitions |
|
|
— |
|
|
|
(246 |
) |
Stock-based compensation expense |
|
|
6,497 |
|
|
|
5,705 |
|
Other expenses2 |
|
|
1,376 |
|
|
|
1,185 |
|
Adjusted EBITDA |
|
$ |
23,485 |
|
|
$ |
7,296 |
|
29
Changes in Financial Condition to March 31, 2024 from December 31, 2023
|
|
March 31, |
|
|
December 31, |
|
|
Change |
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and restricted cash |
|
$ |
101,902 |
|
|
$ |
94,479 |
|
|
$ |
7,423 |
|
|
|
7.9 |
% |
Consumer receivables |
|
|
217,049 |
|
|
|
208,167 |
|
|
|
8,882 |
|
|
|
4.3 |
% |
Allowance for credit losses on consumer receivables |
|
|
(34,303 |
) |
|
|
(35,329 |
) |
|
|
1,026 |
|
|
|
-2.9 |
% |
Consumer receivables, net |
|
|
182,746 |
|
|
|
172,838 |
|
|
|
9,908 |
|
|
|
5.7 |
% |
Enterprise receivables, net |
|
|
17,518 |
|
|
|
15,978 |
|
|
|
1,540 |
|
|
|
9.6 |
% |
Property and equipment, net |
|
|
1,975 |
|
|
|
1,864 |
|
|
|
111 |
|
|
|
6.0 |
% |
Intangible assets, net |
|
|
172,375 |
|
|
|
176,541 |
|
|
|
(4,166 |
) |
|
|
-2.4 |
% |
Other assets |
|
|
61,404 |
|
|
|
53,559 |
|
|
|
7,845 |
|
|
|
14.6 |
% |
Total assets |
|
$ |
537,920 |
|
|
$ |
515,259 |
|
|
$ |
22,661 |
|
|
|
4.4 |
% |
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt agreements |
|
$ |
194,083 |
|
|
$ |
189,753 |
|
|
$ |
4,330 |
|
|
|
2.3 |
% |
Accounts payable and accrued liabilities |
|
|
50,043 |
|
|
|
52,396 |
|
|
|
(2,353 |
) |
|
|
-4.5 |
% |
Warrant liability |
|
|
729 |
|
|
|
810 |
|
|
|
(81 |
) |
|
|
-10.0 |
% |
Other liabilities |
|
|
22,607 |
|
|
|
15,077 |
|
|
|
7,530 |
|
|
|
49.9 |
% |
Total liabilities |
|
|
267,462 |
|
|
|
258,036 |
|
|
|
9,426 |
|
|
|
3.7 |
% |
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common Stock |
|
|
1 |
|
|
|
1 |
|
|
|
- |
|
|
|
0.0 |
% |
Additional paid-in capital |
|
|
975,801 |
|
|
|
969,641 |
|
|
|
6,160 |
|
|
|
0.6 |
% |
Accumulated deficit |
|
|
(695,644 |
) |
|
|
(702,719 |
) |
|
|
7,075 |
|
|
|
-1.0 |
% |
Treasury stock |
|
|
(9,700 |
) |
|
|
(9,700 |
) |
|
|
- |
|
|
|
0.0 |
% |
Total stockholders' equity |
|
|
270,458 |
|
|
|
257,223 |
|
|
|
13,235 |
|
|
|
5.1 |
% |
Total liabilities and stockholders' equity |
|
$ |
537,920 |
|
|
$ |
515,259 |
|
|
$ |
22,661 |
|
|
|
4.4 |
% |
Assets
Cash and restricted cash
Cash and restricted cash increased by $7.4 million, or 7.9%, to $101.9 million as of March 31, 2024, as compared to $94.5 million as of December 31, 2023. Refer to the “— Cash Flows” section below for further discussion on the net change in cash and restricted cash from operating activities, investing activities and financing activities during the period.
Consumer receivables, net
Consumer receivables, net increased by $9.9 million, or 5.7%, to $182.7 million as of March 31, 2024, as compared to $172.8 million as of December 31, 2023. The increase was primarily attributable to an increase in Instacash receivables, net of $6.5 million and an increase in loan receivables, net of $3.3 million.
Enterprise receivables, net
Enterprise receivables, net increased by $1.5 million, or 9.6%, to $17.5 million as of March 31, 2024, as compared to $16.0 million as of December 31, 2023. This increase was primarily attributable to an increase in Enterprise service revenues.
30
Intangible assets, net
Intangible assets, net decreased by $4.2 million, or 2.4%, to $172.4 million as of March 31, 2024, as compared to $176.5 million as of December 31, 2023. This decrease was primarily attributable to the amortization of customer relationship and trade name intangibles from mergers and acquisitions.
Other assets
Other assets increased by $7.8 million, or 14.6%, to $61.4 million as of March 31, 2024, as compared to $53.6 million as of December 31, 2023. The increase was primarily driven by an increase in operating lease right-of-use assets due to a lease of the Company's new corporate headquarters entered into during the three months ended March 31, 2024.
Liabilities
Debt agreements
Debt agreements increased by $4.3 million, or 2.3%, to $194.1 million as of March 31, 2024, as compared to $189.8 million as of December 31, 2023. The increase was primarily due to net proceeds obtained from special purpose vehicle credit facilities during the three months ended March 31, 2024.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities decreased by $2.4 million, or 4.5%, to $50.0 million as of March 31, 2024, as compared to $52.4 million as of December 31, 2023. The decrease was primarily attributable to annual bonuses and state taxes paid during the three months ending March 31, 2024, which was partially offset by an increase in general operating expenses and the related accounts payable and accrued liabilities.
Warrant liability
Warrant liability decreased by $0.1 million, or 10.0%, to $0.7 million as of March 31, 2024, as compared to $0.8 million as of December 31, 2023. Refer to the “— Results of Operations for the Three Months Ended March 31, 2024 and 2023” section above for further discussion on the change in fair value of warrant liability.
Other liabilities
Other liabilities increased by $7.5 million, or 49.9%, to $22.6 million as of March 31, 2024, as compared to $15.1 million as of December 31, 2023. The increase was primarily driven by an increase in operating lease liabilities due to a lease of the Company's new corporate headquarters entered into during the three months ended March 31, 2024.
Liquidity and Capital Resources
We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital needs for at least the next twelve months. Our future financing requirements will depend on several factors, including our growth, the timing and level of spending to support continued development of our platform, the expansion of marketing activities and merger and acquisition activity. In addition, growth of our finance receivables increases our liquidity needs, and any failure to meet those liquidity needs could adversely affect our business. Additional funds may not be available on terms favorable to us or at all. If the Company is unable to generate positive operating cash flows, additional debt and equity financings or refinancing of existing debt financings may be necessary to sustain future operations.
31
Receivables originated on our platform, including Credit Builder Loans and Instacash advances, were primarily financed through special purpose vehicle financings from third-party institutional lenders. As of March 31, 2024, there was an outstanding principal balance of $66.5 million under the ROAR 1 SPV Credit Facility and an outstanding principal balance of $64.5 million under the ROAR 2 SPV Credit Facility. For more information, see Note 7, “Debt” and Note 2, “Summary of Significant Accounting Policies” of the Company’s Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for discussion of the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility and VIE considerations related to the ROAR 1 SPV Credit Facility and the ROAR 2 SPV Credit Facility, respectively.
The following table presents the Company’s cash, restricted cash and receivable from payment processor as of March 31, 2024 and December 31, 2023:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Cash |
|
$ |
93,177 |
|
|
$ |
92,195 |
|
Restricted cash |
|
|
8,725 |
|
|
|
2,284 |
|
Receivable from payment processor |
|
$ |
35,722 |
|
|
$ |
37,362 |
|
Cash Flows
The following table presents net change in cash and restricted cash from operating, investing and financing activities during the three months ended March 31, 2024 and 2023:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net cash provided by operating activities |
|
$ |
33,639 |
|
|
$ |
2,680 |
|
Net cash used in investing activities |
|
|
(29,879 |
) |
|
|
(21,034 |
) |
Net cash provided by (used in) financing activities |
|
|
3,663 |
|
|
|
(24,599 |
) |
Net change in cash and restricted cash |
|
$ |
7,423 |
|
|
$ |
(42,953 |
) |
Operating Activities
Net cash provided by operating activities was $33.6 million for the three months ended March 31, 2024 compared to net cash provided by operating activities of $2.7 million for the three months ended March 31, 2023. This increase in net cash provided by operating activities was primarily driven by an increase in profitability, after adjusting for non-cash activity included in our net income (loss), of approximately $20.8 million during the three months ended March 31, 2024 and changes in working capital.
Investing Activities
Net cash used in investing activities was $29.9 million for the three months ended March 31, 2024 compared to net cash used in investing activities of $21.0 million for the three months ended March 31, 2023. The increase in net cash used in investing activities was primarily related to an increase in net originations and collections of finance receivables and an increase in software development during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Financing Activities
Net cash provided by financing activities was $3.7 million for the three months ended March 31, 2024 compared to net cash used in financing activities of $24.6 million for the three months ended March 31, 2023. The increase in cash provided by financing activities was primarily attributable an increase in net proceeds from special purpose vehicle facilities of $28.0 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
32
Financing Arrangements
Refer to Part I, Item 1 “Financial Statements — Debt” for further discussion on financing transactions during the period.
Contractual Obligations
The table below summarizes debt, lease and other long-term minimum cash obligations outstanding as of March 31, 2024:
|
|
Total |
|
|
Remainder of 2024 |
|
|
2025 – 2026 |
|
|
2027 – 2028 |
|
|
Thereafter |
|
|||||
Monroe Term Loans |
|
$ |
65,000 |
|
|
$ |
— |
|
|
$ |
65,000 |
|
|
$ |
— |
|
|
$ |
— |
|
ROAR 1 SPV Credit Facility |
|
|
66,500 |
|
|
|
— |
|
|
|
66,500 |
|
|
|
— |
|
|
|
— |
|
ROAR 2 SPV Credit Facility |
|
|
64,500 |
|
|
|
— |
|
|
|
64,500 |
|
|
|
— |
|
|
|
— |
|
Operating lease obligations |
|
|
20,805 |
|
|
|
3,069 |
|
|
|
8,192 |
|
|
|
6,605 |
|
|
|
2,939 |
|
Vendor unconditional purchase obligations |
|
|
25,500 |
|
|
|
— |
|
|
|
17,000 |
|
|
|
8,500 |
|
|
|
— |
|
Total |
|
$ |
242,305 |
|
|
$ |
3,069 |
|
|
$ |
221,192 |
|
|
$ |
15,105 |
|
|
$ |
2,939 |
|
Secured Loans and Other Debt
For more information regarding our secured loans and other debt, see Part I, Item 1 “Financial Statements — Debt” in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Arrangements
At March 31, 2024, the Company did not have any material off-balance sheet arrangements.
Critical Accounting Policies and Estimates
See Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for a description of critical accounting policies and estimates.
Recently Issued and Adopted Accounting Pronouncements
See Part I, Item 1 “Financial Statements — Summary of Significant Accounting Policies” for a description of recently issued accounting pronouncements that may potentially impact our results of operations, financial condition or cash flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates.
Interest Rates Risk
Interest rates may adversely impact our customers’ level of engagement on our platform and ability and willingness to pay outstanding amounts owed to us. While we do not charge interest on a lot of our products, higher interest rates could deter customers from utilizing our credit products and other loans. Moreover, higher interest rates may lead to increased delinquencies, charge-offs and allowances for loans and interest receivable, which could have an adverse effect on our operating results.
33
The Monroe Term Loans, and future funding arrangements may, bear a variable interest rate. The ROAR 1 SPV Credit Facility and ROAR 2 SPV Credit Facility have fixed interest rates. Given the fixed interest rates charged on many of our loans, a rising variable interest rate would reduce our interest margin earned in these funding arrangements. Dramatic increases in interest rates may make these forms of funding nonviable. A one percent change in the interest rate on our variable interest rate debt, based on principal balances as of March 31, 2024, would result in an approximately $0.7 million impact to annual interest expense.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of March 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2024, our disclosure controls and procedures were effective in providing reasonable assurance that the information required for disclosure in reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to Company management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during the quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
34
Part II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to various claims and legal proceedings in the ordinary course of business, including lawsuits, arbitrations, class actions and other litigation. We are also the subject of various actions, inquiries, investigations and proceedings by regulatory and other governmental agencies. The outcome of any such legal and regulatory matters, including those discussed in this section, is inherently uncertain, and some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, which could materially and adversely impact our business, financial condition, operating results and cash flows. See “Risk Factors — Risks Relating to Legal and Accounting Matters — Unfavorable outcomes in legal proceedings may harm our business, financial condition, results of operations and cash flows” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
We have determined, based on our current knowledge, that the aggregate amount or range of losses that are estimable with respect to our legal proceedings, including the matters described below, would not have a material adverse effect on our business, financial position, results of operations or cash flows. As of March 31, 2023, amounts accrued were not material. Notwithstanding the foregoing, the ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. It is possible that an adverse outcome of any matter could be material to our business, financial position, results of operations or cash flows as a whole for any particular reporting period of occurrence. In addition, it is possible that a matter may prompt litigation or additional investigations or proceedings by other government agencies or private litigants.
State Regulatory Examinations and Investigations
We hold a number of state licenses in connection with our business activities, and must also comply with other applicable compliance and regulatory requirements in the states where we operate. In most states where we operate, one or more regulatory agencies have authority with respect to regulation and enforcement of our business activities under applicable state laws, and we may also be subject to the supervisory and examination authority of such state regulatory agencies. Examinations by state regulators have and may continue to result in findings or recommendations that require us, among other potential consequences, to provide refunds to customers or to modify our internal controls and/or business practices.
In the ordinary course of our business, we are and have been from time to time subject to, and may in the future be subject to, governmental and regulatory examinations, information requests, investigations and proceedings (both formal and informal) in connection with various aspects of our activities by state agencies, certain of which could result in adverse judgments, settlements, fines, penalties, restitution, disgorgement, injunctions or other relief. We have responded to and cooperated with the relevant state agencies and will continue to do so in the future, as appropriate.
35
CFPB Litigation
On September 29, 2022, the Consumer Financial Protection Bureau (the “CFPB”) initiated a civil action in the United States District Court for the Southern District of New York (“SDNY”) against MoneyLion Technologies Inc., ML Plus LLC and our 38 state lending subsidiaries, alleging violations of the Military Lending Act and the Consumer Financial Protection Act. The CFPB is seeking injunctive relief, redress for allegedly affected consumers and civil monetary penalties. On January 10, 2023, we moved to dismiss the lawsuit, asserting various constitutional and merits-based arguments. On June 13, 2023, the CFPB filed its first amended complaint, alleging substantially similar claims as those asserted in its initial complaint. On July 11, 2023, we moved to dismiss the lawsuit, again asserting various constitutional and merit-based arguments. On October 9, 2023, we moved for a stay of the action pending a decision from the United States Supreme Court in CFPB v. Community Financial Services Association of America, Ltd., No. 22-448 (U.S. argued Oct. 3, 2023) (“CFSA”). On December 1, 2023, the Court issued an order granting our motion and staying the action pending the United State Supreme Court’s decision in CFSA. We continue to maintain that the CFPB’s claims are meritless and are vigorously defending against the lawsuit. Nevertheless, at this time, we cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on our business, financial condition, results of operations or cash flows.
MALKA Seller Members Litigation
On July 21, 2023, Jeffrey Frommer, Lyusen Krubich, Daniel Fried and Pat Capra, the former equity owners of MALKA (collectively, the “Seller Members”), brought a civil action in the SDNY against MoneyLion Technologies Inc. alleging, among other things, breaches of the Membership Interest Purchase Agreement (the “MIPA”) governing our acquisition of MALKA. Among other claims, the Seller Members allege that they are entitled to payment of $25.0 million of Class A Common Stock pursuant to the earnout provisions set forth in the MIPA, based on the Seller Members’ assertion that MALKA achieved certain financial targets for the year ended December 31, 2022 (such payment, the “2022 Earnout Payment”). We believe that the Seller Members are not entitled to any portion of the 2022 Earnout Payment under the terms of the MIPA and that the Seller Members’ claims in their lawsuit are meritless. We continue to vigorously defend against the lawsuit and have filed counterclaims against the Seller Members, alleging, among other things, negligent misrepresentation, conversion, breach of fiduciary duties and breach of contract and seeking compensatory damages and other remedies as a result of wrongdoing by the Seller Members. On October 17, 2023, the SDNY denied, in full, the Seller Members’ motion for a preliminary injunction to remove the restrictive legends on certain shares of Class A Common Stock previously issued to the Seller Members. At this time, we cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on our business, financial condition, results of operations or cash flows.
Former Series A Preferred Stockholders Litigation
On July 27, 2023, MassMutual Ventures US II LLC, Canaan X L.P., Canaan XI L.P., F-Prime Capital Partners Tech Fund LP and GreatPoint Ventures Innovation Fund II, L.P., each of which are former equityholders of Even Financial Inc. and former holders of the Company’s Series A Preferred Stock (collectively, the “Former Preferred Stockholders”), brought a civil action in the SDNY against MoneyLion Inc., our Board of Directors and certain officers seeking declaratory relief and related damages.
The Former Preferred Stockholders allege that the 1-for-30 Reverse Stock Split of the Class A Common Stock effected on April 24, 2023 was undertaken in a manner designed to trigger the automatic conversion event pursuant to which all outstanding shares of Series A Preferred Stock automatically converted into certain shares of Class A Common Stock following the close of trading on the NYSE on May 26, 2023. The Former Preferred Stockholders further allege that the Definitive Proxy Statement we filed with the SEC on March 31, 2023 relating to the Special Meeting of Stockholders to approve the Reverse Stock Split proposal contained false and/or misleading statements and material omissions, and that we improperly failed to obtain the separate vote of the holders of the Series A Preferred Stock to approve the Reverse Stock Split. In connection therewith, the Former Preferred Stockholders assert claims against all defendants under Section 14(a) of the Securities Exchange Act of 1934 and for breach of the Certificate of Designations governing the Series A Preferred Stock, and a claim against the individual defendants for breach of fiduciary duty.
36
We believe that the Former Preferred Stockholders’ claims are meritless, and on November 6, 2023, we filed a motion to dismiss the lawsuit in its entirety. We intend to vigorously defend against the lawsuit. Nevertheless, at this time, we cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. We may disclose additional changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended March 31, 2024, the officers set forth below each
On
On
On
(i)
(ii) the net shares (not yet determinable) after shares are withheld to satisfy tax obligations upon the vesting of 59,215 RSUs and, subject to the achievement of the applicable performance goals within a range of 80% to 120% of the awarded PSUs with respect to PSUs which have not yet been earned, 63,503 PSUs.
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This Rule 10b5-1 trading arrangement is scheduled to expire on
On
(i)
(ii) the net shares (not yet determinable) after shares are withheld to satisfy tax obligations upon the vesting of 30,890 RSUs and, subject to the achievement of the applicable performance goals within a range of 80% to 120% of the awarded PSUs with respect to PSUs which have not yet been earned, 29,122 PSUs.
This Rule 10b5-1 trading arrangement is scheduled to expire on
38
Item 6. Exhibits
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, the representations, warranties, covenants and agreements contained in such exhibits were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to such agreements instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Unless otherwise explicitly stated therein, investors and security holders are not third-party beneficiaries under any of the agreements attached as exhibits hereto and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its affiliates or businesses. Moreover, the assertions embodied in the representations and warranties contained in each such agreement are qualified by information in confidential disclosure letters or schedules that the parties have exchanged. Moreover, information concerning the subject matter of the representations and warranties may change after the respective dates of such agreements, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Exhibit No. |
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Description |
3.1 |
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3.1.1 |
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10.1*+ |
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31.1* |
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31.2* |
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32.1** |
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32.2** |
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101.INS |
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Inline XBRL Instance Document. |
101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document. |
104 |
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Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* Filed herewith.
** The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
+ Management contract or compensatory plan or arrangement.
39
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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MONEYLION INC. |
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Date: May 7, 2024 |
By: |
/s/ Richard Correia |
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Richard Correia President, Chief Financial Officer and Treasurer (Principal Financial Officer) |
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Date: May 7, 2024 |
By: |
/s/ Mark Torossian |
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Mark Torossian (Principal Accounting Officer) |
40
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is entered into as of March 14, 2022 (the “Effective Date”) by and between MoneyLion Technologies Inc., a Delaware corporation (the “Company”), with its principal place of business at 30 West 21st Street, 9th Floor, New York City, New York, and Adam VanWagner (“Executive”). Company and Executive shall sometimes be referred to individually as the “Party” or collectively as the “Parties.”
RECITALS
WHEREAS, the Company desires to continue to retain Executive as an employee to provide services to the Company, and wishes to provide Executive with certain compensation and benefits in return for Executive’s services;
WHEREAS, Executive desires to continue to be employed by the Company and provide such services to the Company as an Executive in return for certain compensation and benefits;
WHEREAS, this Agreement amends, restates, supersedes and otherwise replaces any existing employment agreement or term sheet, whether written or oral, currently in existence between the Company and Executive, and provides benefits to Executive that Executive is not currently, and would not otherwise be, entitled to without this Agreement; and
WHEREAS, the Company and Executive wish to set forth in this Agreement the terms and conditions under which Executive will be employed by Company.
TERMS
NOW, THEREFORE, incorporating herein by reference the foregoing Recitals and in consideration of Executive’s employment with Company and of the mutual covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
The Company hereby agrees to employ Executive, and Executive hereby accepts such employment, on the terms and conditions set forth herein.
The services to be rendered by Executive shall include such services as are customarily rendered by persons engaged in the same capacity or in a similar capacity in the Company’s industry, pursuant to the
terms and conditions set forth in this Agreement. Executive acknowledges and agrees that in Executive’s capacity as an officer of the Company, Executive owes fiduciary duties to the Company and any of their affiliated companies in accordance with applicable law.
Executive further specifically represents to the Company that he has not brought to (and will not bring to) the Company, nor does he use any materials or documents (whether or not of a confidential nature) of any previous employer or other person or entity. The provisions of this section shall survive the termination of Executive’s employment with the Company.
2
Notwithstanding the foregoing, per Section 3.7.3, in the event Executive is terminated without Cause or terminates for Good Reason (as those terms are defined below), or per Section 3.7.4 in the event Executive is terminated without Cause or terminates for Good Reason following a Change in Control (as that term is defined below), prior to the payment date of the Annual Bonus, Executive will still be eligible to earn the Annual Bonus, if any.
The Parties acknowledge that Executive’s employment relationship with the Company is at-will, subject to the following terms and conditions.
3
4
Notwithstanding the foregoing, Cause shall not be deemed to exist unless the Company gives Executive written notice within 30 days after the occurrence of the event which the Company believes constitutes the basis for Cause, specifying the particular act or failure to act which the Company believes constitutes the basis for Cause. If Executive fails to cure such act or failure to act (to the extent curable, which shall not be the case under any circumstances with respect to clauses (a), (b) or (f) of this Section 3.6.1) within 30 days after receipt of such notice, the Company may terminate Executive's employment for Cause within ten days of the expiration of such 30-day cure period by written notice to Executive.
5
Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless Executive gives the Company written notice within 30 days after the occurrence of the event which Executive believes constitutes the basis for Good Reason, specifying the particular act or failure to act which Executive believes constitutes the basis for Good Reason. If the Company fails to cure such act or failure to act within 30 days after receipt of such notice, Executive must terminate his employment for Good Reason within 30 days of the expiration of such 30 day Company cure period by written notice to the Company (a “Good Reason Termination Final Notice”).
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7
8
9
10
11
The Claims to be arbitrated include, but are not limited to: claims for wages or other compensation due; claims for breach of any contract or covenant (express or implied); tort claims; claims for unlawful discrimination or unlawful harassment (including, but not limited to, race, sex, sexual orientation, religion, national origin, age, marital status, physical or mental disability or handicap, or medical condition, pregnancy or pregnancy related condition, or any other condition against which discrimination is unlawful under federal, state, or local law, ordinance, or regulation); claims for benefits (except claims under an executive benefit or pension plan that either specifies that its claims procedure shall culminate in an arbitration procedure different from this one, or is underwritten by a commercial insurer which decides claims); and claims for violation of any federal, state, or other governmental law, statute, regulation, or ordinance. Nothing in this Agreement shall be construed as precluding the Executive from filing a: (i) claim for workers’ compensation or unemployment compensation benefits; and (ii) claim with the Equal Employment Opportunity Commission, or similar fair employment practices agency in New York, or an administrative charge within the jurisdiction of the National Labor Relations Board, or the New York Labor Department; however, any such administrative claim that cannot be resolved administratively through such an agency shall be subject to this Agreement.
Except as otherwise provided herein, arbitration shall be governed by and proceed in accordance with and be subject to the provisions of the Federal Arbitration Act (“FAA”). However, to the extent that the FAA is inapplicable or held not to require arbitration of a particular Claim or Claims, the New York Arbitration Act (NY CLS CPLR §§ 7501, et seq.) or any successor or replacement statute(s), shall apply.
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Except as otherwise provided herein, the arbitration shall be commenced and conducted in accordance with the Employment Arbitration Rules & Mediation Procedures of JAMS as in effect at the time of commencement of the Arbitration (“JAMS Rules”) https://www.jamsadr.com/rules-employment-arbitration/english. Any arbitration shall be held in New York City, New York. The exact time and location of the arbitration proceeding will be determined by the arbitrator. The parties shall jointly select one arbitrator from the JAMS panel of arbitrators who shall be either a retired judge or an attorney who is experienced in the area of dispute.
Any demand for arbitration shall be in writing and must be made within a reasonable time after the claim, dispute, or other matter in question has arisen. In no event shall the demand for arbitration be made after the date that institution of legal or equitable proceedings based upon such claim, dispute or other matter would be barred by the applicable statute of limitations.
The arbitrator shall apply the law of the state of New York or federal law, or both, as applicable to the issues asserted and shall be without jurisdiction to apply any different substantive law. The arbitrator shall hear and rule on pre-hearing disputes and is authorized to hold pre-hearing conferences by telephone or in person, as the arbitrator deems advisable. The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under New York law. The arbitrator may issue orders to protect the confidentiality of proprietary information, trade secrets or other sensitive information.
Although conformity to legal rules of evidence shall not be necessary, the arbitrator shall determine the admissibility, relevance, and materiality of the evidence offered and may exclude evidence deemed by the arbitrator to be cumulative or irrelevant, and shall take into account applicable principles of legal privilege, such as those involving the confidentiality of communications between a lawyer and client.
The arbitrator shall render an award and a written opinion, which will consist of a written statement signed by the arbitrator regarding the disposition of each Claim and the relief, if any, as to each Claim and also contain a concise written statement of the reasons for the award, stating the essential findings and conclusions of law upon which the award is based, no later than thirty days from the date the arbitration hearing concludes or the post hearing briefs (if requested) are received, whichever is later. The award of the arbitrator, which may include equitable relief, shall be final and binding upon the parties and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Either party may bring an action in any court of competent jurisdiction to compel arbitration and to enforce an arbitration award.
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14
To Executive at the address set forth in the Company’s records.
To Company at: MoneyLion
30 West 21st Street,
9th Floor,
New York City, New York 10010
Attn: Dee Choubey/CEO
E-mail: XXX
EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT, THAT HE UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN COMPANY AND EXECUTIVE RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT, AND THAT EXECUTIVE HAS ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
15
PROMISES OR REPRESENTATIONS BY COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.
EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT EXECUTIVE IS GIVING UP ANY RIGHT TO A JURY TRIAL.
[Signature Page Follows]
16
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
COMPANY: |
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MoneyLion Technologies Inc. |
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By: |
/s/ Diwakar Choubey |
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Name: Diwakar Choubey |
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Title: Chief Executive Officer |
EXECUTIVE: |
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/s/ Adam VanWagner |
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Adam VanWagner |
17
EXHIBIT A
[RELEASE]
18
[__________________, 20__]
Adam VanWagner
[ADDRESS]
Re: Confidential Separation and Release Agreement
Dear Adam:
This letter constitutes the confidential separation and release agreement (this “Agreement”) that MoneyLion, Technologies Inc. (the “Company”) is offering to you (“you”) to aid in your employment transition. The obligations of the Company to provide severance benefits pursuant to this Agreement will not become effective until the Effective Date as provided in Article 11 below. The Company and you shall sometimes be referred to collectively as the “Parties” or individually as the “Party.”
19
20
You further acknowledge and agree that except for the rights and obligations created by this Agreement no other payments or benefits, of any nature, are due to you from any of the Released Parties for any reason whatsoever, and the Released Parties shall have no other obligations to you. You further understand and acknowledge that you cannot and will not file any cause of action, claim, charge or lawsuit for the purpose of obtaining any monetary award, reinstatement of his employment or for any equitable relief. You also understand and acknowledge that you shall not seek or apply for re-employment with any of the Released Parties. You further understand and acknowledge that the term “employment” in this Agreement shall refer to any and all services you provided to any of the Released Parties, whether in the capacity of employee or otherwise.
You further acknowledge and understand that you are not releasing any claim that cannot be waived under applicable state or federal law. You are not releasing any claims for breach of this Agreement and any claims arising after the Effective Date of this Agreement. You are not releasing any rights that you have to be indemnified (including any right to reimbursement of expenses) arising under applicable law, any indemnification agreement between you and the Company, or any directors’ and officers’ liability insurance policy of the Company or with respect to any right to equity in the Company held by you, pursuant to an applicable written grant, purchase or award agreement.
You also understand that the foregoing paragraph does not apply to any challenge you may make regarding the knowing and voluntary nature of the release of your claim for age discrimination, if any,
21
under the ADEA. You also understand, however, that if you pursue a claim against any of the Released Parties for age discrimination under the ADEA, a court has the discretion to determine whether any of the Released Parties are entitled to restitution, recoupment, or setoff against a monetary award obtained by you in any proceeding. You also recognize that, as a result of such challenge, the Released Parties may be entitled to recover costs and attorneys’ fees incurred by them as specifically authorized under applicable law.
Notwithstanding the foregoing, you further understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, or any other federal, state or local governmental agency or commission (“Government Agencies”) but is waiving your right to recover damages or to seek reinstatement pursuant to such complaint or charge. You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.]
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASING PARTY.
Thus, for the purposes of making a complete settlement of all claims which you may have or claim to have against the Released Parties, you waive and release any and all claims against the Released Parties, including claims which are unknown and unsuspected as of the Effective Date of this Agreement. You warrant that you have read this Agreement, including the Section 1542 Waiver, and have had an opportunity to consult with counsel of your own choosing about this Agreement and specifically about the Section 1542 Waiver, and that you understand this Agreement and the Section 1542 Waiver. You acknowledge that you may later discover facts different from or in addition to those you now know or believe to be true regarding the matters released or described in this Agreement, and even so you agrees that the releases and agreements contained in this Agreement shall remain effective in all respects notwithstanding any later discovery of any different or additional facts. You assume any and all risk of any mistake in connection with the true facts involved in the matters, disputes, or controversies released or described in this Agreement or with regard to any facts now unknown to you relating thereto.
You acknowledge that you have not heretofore assigned or transferred to or purported to assign or transfer to any person or entity the Released Claims or any part or portion thereof, and agree to indemnify and hold harmless the Released Parties from and against any claim, demand, controversy, damage, debt, liability, account, reckoning, obligation, cost, expense, lien, action or cause of action (including the payment of attorneys’ fees and costs actually incurred whether or not litigation commenced) based on, in connection with, or arising out of any assignment or transfer or claimed assignment or transfer thereof.
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To Executive at the address set forth in the Company’s records.
If to the Company:
MoneyLion
30 West 21st Street,
9th Floor, New York City, New York 10010
Attn: CEO
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THE UNDERSIGNED HAVE READ THE FOREGOING AGREEMENT AND ACCEPT AND AGREE TO THE PROVISIONS CONTAINED HEREIN, AND HEREBY EXECUTE IT, KNOWINGLY AND VOLUNTARILY, AND WITH FULL UNDERSTANDING OF ITS CONSEQUENCES.
If this Agreement is acceptable to you, please sign and date below and return the original to the Company within twenty-one (21) days provided it is not before the first day after your Separation Date. The Company’s offer contained herein will automatically expire if the Company does not receive the fully signed Agreement within the required timeframe.
The Company wishes you good luck in your future endeavors.
Sincerely,
MoneyLion Technologies Inc.
By:
AGREED:
Adam VanWagner
Date: ________________
26
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Diwakar Choubey, certify that:
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1. |
I have reviewed this Quarterly Report on Form 10-Q of MoneyLion Inc.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 7, 2024 |
By: |
/s/ Diwakar Choubey |
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Diwakar Choubey |
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Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Correia, certify that:
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1. |
I have reviewed this Quarterly Report on Form 10-Q of MoneyLion Inc.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 7, 2024 |
By: |
/s/ Richard Correia |
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Richard Correia |
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President, Chief Financial Officer and Treasurer |
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(Principal Financial Officer) |
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant To Rule 18 U.S.C. Section 1350
In connection with the Quarterly Report on Form 10-Q of MoneyLion Inc. (the “Company”) for the quarterly period ended March 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Diwakar Choubey, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 7, 2024 |
/s/ Diwakar Choubey |
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Diwakar Choubey |
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Chief Executive Officer |
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant To Rule 18 U.S.C. Section 1350
In connection with the Quarterly Report on Form 10-Q of MoneyLion Inc. (the “Company”) for the quarterly period ended March 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Richard Correia, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 7, 2024 |
/s/ Richard Correia |
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Richard Correia |
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President, Chief Financial Officer and Treasurer |
Consolidated Balance Sheets (Unaudited) (Parentheticals) $ in Thousands |
3 Months Ended | |
|---|---|---|
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Mar. 31, 2024
USD ($)
$ / shares
shares
|
Dec. 31, 2023
USD ($)
$ / shares
shares
|
|
| Restricted cash, including amounts held by variable interest entities (in Dollars) | $ | $ 5,724 | $ 128 |
| Consumer receivables, net, including amounts held by VIEs (in Dollars) | $ | 138,185 | 131,283 |
| Other debt, including amounts held by VIEs (in Dollars) | $ | $ 129,675 | $ 125,419 |
| Treasury stock, shares | 32,333 | 32,333 |
| Class A Common Stock | ||
| Common Stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 66,666,666 | 66,666,666 |
| Common stock, shares issued | 10,820,256 | 10,444,627 |
| Common stock, shares outstanding | 10,787,923 | 10,412,294 |
| Reverse stock split ratio | 0.033 |
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) (Parentheticals) |
3 Months Ended | ||
|---|---|---|---|
Apr. 24, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Exchange ratio | 0.0333 | ||
| Class A Common Stock [Member] | |||
| Exchange ratio | 0.033 | 0.033 | 0.033 |
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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| Cash flows from operating activities: | ||
| Net income (loss) | $ 7,075 | $ (9,217) |
| Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
| Provision for losses on receivables | 20,230 | 16,511 |
| Depreciation and amortization expense | 6,212 | 6,184 |
| Change in deferred fees and costs, net | 356 | 616 |
| Change in fair value of warrants | (81) | 149 |
| Change in fair value of contingent consideration from mergers and acquisitions | (246) | |
| Gain on foreign currency translation | (97) | (7) |
| Stock compensation expense | 6,497 | 5,705 |
| Deferred income taxes | 236 | (93) |
| Changes in assets and liabilities: | ||
| Accrued interest receivable | (38) | (27) |
| Enterprise receivables, net | (1,540) | (4,130) |
| Other assets | (1,364) | (1,250) |
| Accounts payable and accrued liabilities | (2,256) | (9,805) |
| Other liabilities | (1,591) | (1,710) |
| Net cash provided by operating activities | 33,639 | 2,680 |
| Cash flows from investing activities: | ||
| Net originations and collections of finance receivables | (27,722) | (19,647) |
| Purchase of property and equipment and software development | (2,157) | (1,037) |
| Settlement of contingent consideration related to mergers and acquisitions | (350) | |
| Net cash used in investing activities | (29,879) | (21,034) |
| Cash flows from financing activities: | ||
| Net proceeds from (repayments to) special purpose vehicle credit facilities | 4,000 | (24,000) |
| Payments related to issuance of common stock related to exercise of stock options and warrants, net of tax withholdings related to vesting of stock-based compensation | (337) | (599) |
| Net cash provided by (used in) financing activities | 3,663 | (24,599) |
| Net change in cash and restricted cash | 7,423 | (42,953) |
| Cash and restricted cash, beginning of period | 94,479 | 153,709 |
| Cash and restricted cash, end of period | 101,902 | 110,756 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for interest | 6,448 | 7,465 |
| Supplemental disclosure of non-cash investing and financing activities: | ||
| Accrued dividends on preferred stock | 1,977 | |
| Equity issued as consideration for mergers and acquisitions | 120 | |
| Equity issued as settlement of contingent consideration related to Malka Acquisition | $ 1,913 | |
| Lease liabilities incurred in exchange for operating right-of-use assets | $ 8,885 | |
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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| Pay vs Performance Disclosure | ||
| Net Income (Loss) | $ 7,075 | $ (9,217) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
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Mar. 31, 2024
shares
| |
| Trading Arrangements, by Individual | |
| Material Terms of Trading Arrangement | Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended March 31, 2024, the officers set forth below each adopted a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Each 10b5-1 trading arrangement was entered into in writing during an open trading window under our Insider Trading Policy, has a trading period of at least one year, and is subject to a mandatory cooling off period as required by Rule 10b5-1. Shares in each Rule 10b5-1 trading arrangement underlying restricted stock units (“RSUs”) and performance share units (“PSUs”) may only be sold following satisfaction of the applicable time-based and performance-based vesting requirements. In addition, due to limit price requirements and timing conditions in certain of the Rule 10b5-1 trading arrangements, it is not yet determinable how many shares of Class A Common Stock will actually be sold under such Rule 10b5-1 trading arrangements prior to its expiration date, as indicated below.
On March 12, 2024, Mark Torossian, our Chief Accounting Officer, adopted a Rule 10b5-1 trading arrangement for the sale of up to 75% of the net shares (not yet determinable) after shares are withheld to satisfy tax obligations upon the vesting of 5,144 RSUs and, subject to the achievement of the applicable performance goals within a range of 80% to 120% of the awarded PSUs with respect to PSUs which have not yet been earned, 7,197 PSUs. This Rule 10b5-1 trading arrangement is scheduled to expire on June 30, 2025.
On March 13, 2024, Dee Choubey, our Chief Executive Officer and a director, adopted a Rule 10b5-1 trading arrangement for the sale of up to 112,607 shares of Class A Common Stock. This Rule 10b5-1 trading arrangement is scheduled to expire on June 17, 2025.
On March 13, 2024, Rick Correia, our President, Chief Financial Officer and Treasurer, adopted a Rule 10b5-1 trading arrangement for the sale of up to:
(i) 10,157 shares of Class A Common Stock; and
(ii) the net shares (not yet determinable) after shares are withheld to satisfy tax obligations upon the vesting of 59,215 RSUs and, subject to the achievement of the applicable performance goals within a range of 80% to 120% of the awarded PSUs with respect to PSUs which have not yet been earned, 63,503 PSUs.
This Rule 10b5-1 trading arrangement is scheduled to expire on June 30, 2025.
On March 14, 2024, Tim Hong, our Chief Product Officer, adopted a Rule 10b5-1 trading arrangement for the sale of up to:
(i) 45,000 shares of Class A Common Stock underlying vested options; and
(ii) the net shares (not yet determinable) after shares are withheld to satisfy tax obligations upon the vesting of 30,890 RSUs and, subject to the achievement of the applicable performance goals within a range of 80% to 120% of the awarded PSUs with respect to PSUs which have not yet been earned, 29,122 PSUs.
This Rule 10b5-1 trading arrangement is scheduled to expire on June 30, 2025. |
| Rule 10b5-1 Arrangement Adopted | true |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Mark Torossian | |
| Trading Arrangements, by Individual | |
| Name | Mark Torossian |
| Title | Chief Accounting Officer |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 12, 2024 |
| Trading Arrangement Expiration Date | June 30, 2025 |
| Dee Choubey | |
| Trading Arrangements, by Individual | |
| Name | Dee Choubey |
| Title | Chief Executive Officer and a director |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 13, 2024 |
| Rule 10b5-1 Arrangement Terminated | true |
| Aggregate Available | 112,607 |
| Trading Arrangement Expiration Date | June 17, 2025 |
| Rick Correia | |
| Trading Arrangements, by Individual | |
| Name | Rick Correia |
| Title | President, Chief Financial Officer and Treasurer |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 13, 2024 |
| Aggregate Available | 10,157 |
| Trading Arrangement Expiration Date | June 30, 2025 |
| Tim Hong | |
| Trading Arrangements, by Individual | |
| Name | Tim Hong |
| Title | Chief Product Officer |
| Rule 10b5-1 Arrangement Adopted | true |
| Adoption Date | March 14, 2024 |
| Aggregate Available | 45,000 |
| Trading Arrangement Expiration Date | June 30, 2025 |
Description of Business and Basis Of Presentation |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Description of Business and Basis of Presentation [Abstract] | |
| DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
MoneyLion Inc. (“MoneyLion” or the “Company”) was founded in 2013 and is headquartered in New York, New York. On September 22, 2021, MoneyLion Inc., formerly known as Fusion Acquisition Corp., consummated a business combination (the “Business Combination”) with MoneyLion Technologies Inc., formerly known as MoneyLion Inc. Following the Business Combination, MoneyLion Inc. became a publicly traded company, with MoneyLion Technologies Inc. continuing the existing business operations as a subsidiary of MoneyLion Inc. MoneyLion Inc.’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), is listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “ML.” “MALKA” refers to Malka Media Group LLC, a wholly-owned subsidiary of MoneyLion Technologies Inc., and “Engine” refers to ML Enterprise Inc., doing business as the brand “Engine by MoneyLion,” a wholly-owned subsidiary of MoneyLion Technologies Inc. which was previously named “Even Financial Inc.” and subsequently renamed in February 2023.
MoneyLion is a leader in financial technology, powering the next generation of personalized products and financial content for American consumers. MoneyLion designs and offers modern personal finance products, tools and features and curate money-related content that delivers actionable insights and guidance to its users. MoneyLion also operates and distributes embedded finance marketplace solutions that match consumers with personalized third-party offers from its partners, providing convenient access to an expansive breadth of financial solutions that enable consumers to borrow, spend, save and achieve better financial outcomes. In addition, MoneyLion provides creative media and brand content services to clients across industries through its media division and leverages its adaptive, in-house content studio to produce and deliver engaging and dynamic content in support of MoneyLion's product and service offerings.
Basis of Presentation—The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of MoneyLion Inc. and its wholly owned subsidiaries and consolidated variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. The Company does not have any items of other comprehensive income (loss); therefore, there is no difference between net income (loss) and comprehensive income (loss) for the three months ended March 31, 2024 and 2023.
Reverse Stock Split—On April 24, 2023, the Company amended the Company's Fourth Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”) to effect, effective as of 5:01 p.m. Eastern Time on April 24, 2023, a -for-30 reverse stock split (the “Reverse Stock Split”) of the Class A Common Stock. At the effective time of the Reverse Stock Split, every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock, and the total number of shares of Class A Common Stock authorized for issuance was reduced by a corresponding proportion from 2,000,000,000 shares to 66,666,666 shares. The Reverse Stock Split was approved by the Company's stockholders at a Special Meeting of Stockholders on April 19, 2023 and approved by the Board of Directors on April 21, 2023. The primary goal of the Reverse Stock Split was to increase the per share price of the Class A Common Stock in order to meet the minimum per share price requirement for continued listing on the NYSE. The Class A Common Stock began trading on the NYSE on an as-adjusted basis on April 25, 2023 under the existing trading symbol “ML.”
In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of Class A Common Stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. Furthermore, proportionate adjustments were made to the conversion factor at which the Company’s previously outstanding Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), were converted to Class A Common Stock. The total number of shares of preferred stock of the Company authorized for issuance remained at 200,000,000. Stockholders who would have been entitled to receive fractional shares as a result of the Reverse Stock Split were instead entitled to a cash payment in lieu thereof at a price equal to the fraction of one share to which the stockholder was otherwise entitled multiplied by the closing price per share of the Class A Common Stock on the NYSE on the effective date of the Reverse Stock Split.
The effects of the Reverse Stock Split have been reflected in these consolidated financial statements and the accompanying footnotes for all periods presented, which includes adjusting the description of any activity that may have been transacted on a pre-Reverse Stock Split basis. |
Summary of Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments and adjustments to eliminate intercompany transactions and balances, necessary for a fair presentation of its financial position and its results of operations, changes in redeemable convertible preferred stock and stockholders’ equity and cash flows.
The Company’s accounting policies are set forth in Note 2, “Summary of Significant Accounting Policies” of the Company’s Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Included herein are certain updates to those policies and the related disclosures.
Revenue Recognition and Related Receivables—The following table summarizes revenue by type for the three months ended March 31, 2024 and 2023:
Fair Value of Financial Instruments—Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
The Company had no assets measured at fair value on a recurring or non-recurring basis as of March 31, 2024 and December 31, 2023. The Private Placement Warrants (as defined herein) were measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and are further described in Note 12, “Stock Warrants.” The Company had no liabilities measured at fair value on a non-recurring basis as of March 31, 2024 nor December 31, 2023. There have been no transfers between levels during the three months ended March 31, 2024 and 2023.
The Company also has financial instruments which are not measured at fair value. The Company has evaluated cash (Level 1), restricted cash (Level 1) and consumer receivables, net (Level 3) and believes the carrying value approximates the fair value due to the short-term nature of these balances. The carrying value of the secured loans approximates their fair value based on the relatively short duration these instruments have been outstanding and the secured loans' variable interest rate based on market rates. The carrying value of other debt approximates its fair value based on the relatively short duration these instruments have been outstanding and availability of alternative financing sources at similar interest rates with the same terms. The fair value of secured loans and other debt would be based on Level 2 fair value measurements.
Recently Adopted Accounting Pronouncements—The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which, along with subsequent related ASUs, creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans, trade receivables and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of operations as the amounts expected to be collected change. The Company adopted ASU 2016-13 and the related subsequent ASUs effective January 1, 2023, and applied the changes prospectively, recognizing a cumulative-effect adjustment to the beginning balance of retained earnings as of the adoption date. Upon adoption, the Company increased consumer receivables, net by $692, decreased enterprise receivables, net by $187 and reduced accumulated deficit by $505. The adoption of the new guidance did not impact the Company’s unaudited consolidated interim statements of operations or cash flows.
Recently Issued Accounting Pronouncements Not Yet Adopted—The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012. Accordingly, the Company has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance expands the disclosures required for reportable segments in the Company's annual and interim consolidated financial statements, primarily through enhanced disclosures about significant segment expenses. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2025 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2026 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its income tax disclosures. |
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Consumer Receivables |
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSUMER RECEIVABLES | 3. CONSUMER RECEIVABLES
The Company’s finance receivables consist of secured personal loans and principal amounts of Instacash advances. Secured loan principal balances are either partially or fully deposited into an escrow account upon origination with any remaining balance being given to the borrower. The funds in the escrow account may be used to pay the secured personal loan in full or can be released to the borrower once the secured personal loan is paid in full. Until such time, the funds in the escrow account may be collected by the Company in the event the borrower becomes contractually past due. Accrued interest receivables represent the interest accrued on the loan receivables based upon the daily principal amount outstanding except for loans that are on nonaccrual status.
The Company’s policy is to suspend recognition of interest income on secured personal loans and place the secured personal loan on nonaccrual status when the account is more than 60 days past due on a contractual basis or when, in the Company’s estimation, the collectability of the account is uncertain, and the account is less than 90 days contractually past due. The Company has elected to not measure an allowance for losses on accrued interest receivable. Any accrued interest receivable that becomes 90 days past due on a contractual basis is charged-off by reversing net interest income on loan receivables. Net charge-offs of accrued interest income were $237 and $307 for the three months ended March 31, 2024 and 2023.
Fees receivable represent the amounts due to the Company for tips and instant transfer fees related to the Instacash earned wage access product. Subscription receivables represent the amounts billed to customers for subscription services.
The credit quality and future repayment of consumer receivables are dependent upon the customer’s ability to perform under the terms of the agreement. Factors such as unemployment rates and housing values, among others, may impact the customer’s ability to perform under the loan or Instacash advance terms though no direct correlation between charge-off rates and these factors has been identified in the Company's analysis. When assessing provision for losses on consumer receivables, the Company takes into account the composition and delinquency status of the outstanding consumer receivables and the related forecasted principal loss rates based on recent historical experience. Recent historical loss rates are updated on a quarterly basis. Charge-offs of consumer receivable balances occur after becoming 90 days past contractually due unless specific circumstances are identified on an individual or group of receivables that indicate charge-off is not appropriate. The level of exceptions to charge-offs occurring once 90 days past due is not material. Consumer receivable charge-offs typically occur within one year of origination. The tables below show consumer receivables balances as of March 31, 2024 and December 31, 2023 and the consumer receivables activity, charge-off rates and aging by product for the three months ended March 31, 2024 and 2023.
Consumer receivables consisted of the following:
Changes in the allowance for losses on loan receivables were as follows:
Changes in the allowance for losses on Instacash receivables were as follows:
Changes in the allowance for losses on fees receivable were as follows:
Changes in the allowance for losses on subscription receivables were as follows:
The following is an assessment of the repayment performance of loan receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the loan receivables portfolio:
Loan receivables that are 61 to 90 days contractually past due are placed on non-accrual status.
The following is an assessment of the repayment performance of Instacash receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the Instacash receivables portfolio:
The following is an assessment of the repayment performance of fees receivable as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the fees receivable portfolio:
The following is an assessment of the repayment performance of subscription receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the subscription receivables portfolio:
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Property and Equipment |
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
Total depreciation expense related to property and equipment was $186 and $304 for the three months ended March 31, 2024 and 2023, respectively. |
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Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS
Intangible assets consisted of the following:
The Company capitalizes certain internal-use software development costs, consisting primarily of contractor costs and employee salaries and benefits allocated to the software. Capitalization of costs incurred in connection with internally developed software commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Costs incurred for enhancements that are expected to result in additional functionalities are capitalized in a similar manner. Capitalization of costs ceases no later than the point at which the project is substantially complete and ready for its intended use, at which point amortization of capitalized costs begins. All other costs are expensed as incurred. Costs capitalized in connection with internal-use software were $1,860 for the three months ended March 31, 2024 and were $1,162 for the three months ended March 31, 2023.
For the three months ended March 31, 2024 and 2023, total amortization expense was $6,026 and $5,880, respectively.
The following table summarizes estimated future amortization expense of intangible assets placed in service at March 31, 2024 for the years ending:
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Other Assets |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER ASSETS | 6. OTHER ASSETS
Other assets consisted of the following:
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Debt |
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | 7. DEBT
The Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:
For more information regarding debt instruments outstanding as of December 31, 2023, see Note 7, “Debt” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Monroe Term Loans—The Monroe Term Loans (as defined below) are comprised of term loans with a principal balance of $65.0 million (the “Term A-1 Loans”) and term loans that were fully repaid during 2023 (the “Term A-2 Loans” and together with the Term A-1 Loans, the “Monroe Term Loans”). The interest rate as of March 31, 2024 on the Term A-1 Loans was 14.56%.
Other Debt—In September 2021, ROAR 1 SPV Finance LLC, an indirect wholly owned subsidiary of the Company (the “ROAR 1 SPV Borrower”), entered into a $100,000 credit agreement, which, during the first quarter of 2024, decreased to $80,000 (the “ROAR 1 SPV Credit Facility”), with a lender for the funding of finance receivables, which secure the ROAR 1 SPV Credit Facility. The ROAR 1 SPV Credit Facility allows for increases in maximum borrowings under the agreement of up to $200,000, bears interest at a rate of 12.5% and matures in March 2025, unless it is extended to March 2026. Under the terms of the ROAR 1 SPV Credit Facility, the ROAR 1 SPV Borrower is subject to certain covenants including minimum asset requirements to be held by ROAR 1 SPV Borrower. |
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Leases |
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | 8. LEASES
The Company is party to operating leases for all of its offices. Many leases contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the consolidated balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain not to exercise. All long-term leases identified by the Company are classified as operating leases. Lease expenses related to long-term leases were $1,104 and $796 for the three months ended March 31, 2024 and 2023, respectively. Short-term lease expense and variable lease expense were not material for the three months ended March 31, 2024 and 2023. Net rental income from subleases of $166 was recorded in for the three months ended March 31, 2024 and was not material for the three months ended March 31, 2023.
Maturities of the Company’s long-term operating lease liabilities, which are included in on the consolidated balance sheet, were as follows:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | 9. INCOME TAXES
In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at the interim period. The effective tax rate for the three months ended March 31, 2024 was -5.8% and 0.3% for the three months ended March 31, 2023. The decrease in the effective tax rate for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily attributable to US federal permanent differences, certain discrete items related to stock based compensation and the change in the valuation allowance. |
Common and Preferred Stock |
3 Months Ended |
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Mar. 31, 2024 | |
| Stockholders' Equity Note [Abstract] | |
| COMMON AND PREFERRED STOCK | 10. COMMON AND PREFERRED STOCK
Class A Common Stock—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, as provide by the Company’s Certificate of Incorporation (as amended from time to time). 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 the holders of Class A Common Stock must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast present in person or represented by proxy, unless otherwise specified by law, the Company’s Certificate of Incorporation or the Company's Amended and Restated Bylaws (as amended from time to time).
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 MoneyLion’s Board of Directors out of funds legally available therefor.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of MoneyLion’s affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of MoneyLion’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.
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 MoneyLion may issue in the future.
Series A Preferred Stock—Prior to the Automatic Conversion Event (as described below), the Company had shares of Series A Preferred Stock outstanding. Holders of the shares of Series A Preferred Stock (other than certain regulated holders subject to the Bank Holding Company Act of 1956, as amended) were entitled to vote as a single class with the holders of the Class A Common Stock and the holders of any other class or series of capital stock of MoneyLion then entitled to vote.
Holders of the Series A Preferred Stock were entitled to a 30 cent cumulative annual dividend per share, payable at the Company’s election in either cash or Class A Common Stock (or a combination thereof), with any dividends on the Class A Common Stock valued based on the per share volume-weighted average price of the shares of Class A Common Stock on the NYSE for the 20 trading days ending on the trading day immediately prior to the dividend payment date.
Holders of the Series A Preferred Stock were entitled to a liquidation preference in the event of the Company's liquidation equal to the greater of $10.00 per share or the amount per share that such holder would have received had the Series A Preferred Stock been converted into Class A Common Stock immediately prior to the liquidation.
Shares of Series A Preferred Stock were convertible into shares of Class A Common Stock on a one-for-thirty basis, subject to customary anti-dilution adjustments. The Series A Preferred Stock was convertible (i) at any time upon the holder’s election and (ii) automatically in the event that the per share volume-weighted average price of the shares of Class A Common Stock on the NYSE equaled or exceeded $10.00 on any 20 trading days (consecutive or nonconsecutive) within any consecutive 30 trading day period ending no later than the last day of the lockup period applicable to such shares of Series A Preferred Stock.
As of the close of trading on the NYSE on May 26, 2023, the per share volume-weighted average price of the shares of Class A Common Stock on the NYSE equaled or exceeded $10.00 for the twentieth trading day within a consecutive thirty trading day period ending no earlier than the last day of the lockup period applicable to such shares of Series A Preferred Stock (the “Automatic Conversion Event”). Accordingly, as a result of the Automatic Conversion Event, following the close of trading on the NYSE on May 26, 2023, all 30,049,053 shares of Series A Preferred Stock issued and outstanding automatically converted into 1,012,293 shares of newly issued Class A Common Stock based on the conversion rate provided in the Certificate of Designations of the Series A Preferred Stock (the “Certificate of Designations”). In lieu of any fractional shares otherwise issuable to any holder of the Series A Preferred Stock, the Company issued cash in accordance with the terms of the Certificate of Designations.
On June 30, 2023, the Company paid the accrued annual dividend on the previously outstanding shares of Series A Preferred Stock for the dividend payment period ending December 31, 2022 to all holders of record as of the applicable dividend record date (the “2022 Annual Dividend”). The 2022 Annual Dividend was paid in a mixture of Class A Common Stock and cash through the issuance of 229,605 shares of Class A Common Stock and payment of approximately $3.0 million of cash.
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Stock-Based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION
Omnibus Incentive Plan
At the Company's 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”), Company stockholders approved the Company's Amended and Restated Omnibus Incentive Plan (as may be amended or restated from time to time, the “Incentive Plan”), as further described in the Company's Definitive Proxy Statement for the 2022 Annual Meeting, filed with the SEC on April 29, 2022.
Stock-based compensation of $6,497 and $5,705 was recognized during the three months ended March 31, 2024 and 2023, respectively.
The number of units awarded under the Incentive Plan are generally based on a weighted average of the Class A Common Stock in the days leading up to the grant. Fair values for restricted stock units (“RSUs”) and performance stock units (“PSUs”) based on the Company’s operating performance are valued based on the price of the Class A Common Stock at the time of grant. Fair values for options are calculated using a Black-Scholes option pricing model and PSUs with market conditions are fair valued using a Monte Carlo simulation model. The following table represents activity within the Incentive Plan for the three months ended March 31, 2024:
The following table represents outstanding equity awards as of March 31, 2024:
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Stock Warrants |
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| Stock Warrants [Abstract] | |||||||||||||||||||||||||||||||
| STOCK WARRANTS | 12. STOCK WARRANTS
Public Warrants and Private Placement Warrants
As a result of the Business Combination, MoneyLion acquired from Fusion Acquisition Corp., as of September 22, 2021, public warrants outstanding to purchase an aggregate of 583,333 shares of the Class A Common Stock (the “Public Warrants”) and private placement warrants outstanding to purchase an aggregate of 270,000 shares of the Class A Common Stock (the “Private Placement Warrants”) that expire on September 22, 2026.
The Public Warrants meet the conditions for equity classification in accordance with ASC 815-40. At the time of the Business Combination, the Public Warrants assumed by the Company were recorded at fair value within additional paid-in capital in the amount of $23,275. The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the consolidated balance sheets. The warrant liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrants liability in the consolidated statement of operations.
The Private Placement Warrants are valued based on the per warrant price of the Public Warrants, subject to adjustments to account for differences in contractual terms between the Private Placement Warrants and the Public Warrants. The per warrant price of the Public Warrants as of March 31, 2024 was $0.90.
The following table presents the changes in the liability related to the Private Placement Warrants:
For more information regarding the Public Warrants and Private Placement Warrants, see Note 12, “Stock Warrants” in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. |
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Net Income (Loss) Per Share |
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| NET INCOME (LOSS) PER SHARE | 13. NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of net income (loss) per share of Class A Common Stock for the three months ended March 31, 2024 and 2023:
For the three months ended March 31, 2024, 268,330 options to purchase Class A Common Stock and other rights to acquire Class A Common Stock were outstanding and anti-dilutive and, therefore, are excluded from the computation of diluted net income per share attributable to common stockholders. In addition, 85,090 PSUs are excluded from the computation of diluted net income per share attributable to common stockholders as the contingency has not yet been satisfied. All Public Warrants and Private Placement Warrants to purchase Class A Common Stock and rights to receive Earnout Shares (as defined below) are excluded from the computation of diluted net income per share attributable to common stockholders as the relevant purchase price and milestones, respectively, were above the average price of the Class A Common Stock during the three months ended March 31, 2024
For the three months ended March 31, 2023, the Company’s potentially dilutive securities, which include stock options, RSUs, PSUs, preferred stock, the rights to receive Earnout Shares and warrants to purchase shares of common stock, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same for the three months ended March 31, 2023.
The following potential shares of Class A Common Stock have been excluded from the computation of diluted net income (loss) per share for the three months ended March 31, 2024 and 2023:
In connection with the Business Combination, rights to receive Class A Common Stock (the “Earnout Shares”) were issued, with the right to receive Class A Common Stock contingent upon the Class A Common Stock reaching certain price milestones. 250,000 and 333,333 shares of Class A Common Stock will be issued if the Class A Common Stock share price equals or is greater than $375 and $495, respectively, for twenty out of any thirty consecutive trading days. The right to receive the Earnout Shares will expire on September 22, 2026. |
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Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES
Legal Matters—From time to time, the Company is subject to various claims and legal proceedings in the ordinary course of business, including lawsuits, arbitrations, class actions and other litigation. The Company is also the subject of various actions, inquiries, investigations and proceedings by regulatory and other governmental agencies. The outcome of any such legal and regulatory matters, including those discussed in this Note 14, is inherently uncertain, and some of these matters may result in adverse judgments or awards, including penalties, injunctions or other relief, which could materially and adversely impact the Company's business, financial condition, operating results and cash flows. See Part I, Item 1A “Risk Factors — Risks Relating to Legal and Accounting Matters — Unfavorable outcomes in legal proceedings may harm our business, financial condition, results of operations and cash flows” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
The Company has determined, based on its current knowledge, that the aggregate amount or range of losses that are estimable with respect to its legal proceedings, including the matters described below, would not have a material adverse effect on its business, financial position, results of operations or cash flows. As of March 31, 2024, amounts accrued were not material. Notwithstanding the foregoing, the ultimate outcome of legal proceedings involves judgments, estimates and inherent uncertainties, and cannot be predicted with certainty. It is possible that an adverse outcome of any matter could be material to the Company's business, financial position, results of operations or cash flows as a whole for any particular reporting period of occurrence. In addition, it is possible that a matter may prompt litigation or additional investigations or proceedings by other government agencies or private litigants.
The Company holds a number of state licenses in connection with its business activities, and must also comply with other applicable compliance and regulatory requirements in the states where it operates. In most states where the Company operates, one or more regulatory agencies have authority with respect to regulation and enforcement of the Company's business activities under applicable state laws, and the Company may also be subject to the supervisory and examination authority of such state regulatory agencies. Examinations by state regulators have and may continue to result in findings or recommendations that require the Company, among other potential consequences, to provide refunds to customers or to modify its internal controls and/or business practices.
In the ordinary course of its business, the Company is and has been from time to time subject to, and may in the future be subject to, governmental and regulatory examinations, information requests, investigations and proceedings (both formal and informal) in connection with various aspects of its activities by state agencies, certain of which could result in adverse judgments, settlements, fines, penalties, restitution, disgorgement, injunctions or other relief. The Company has responded to and cooperated with the relevant state agencies and will continue to do so in the future, as appropriate.
On September 29, 2022, the Consumer Financial Protection Bureau (the “CFPB”) initiated a civil action in the United States District Court for the Southern District of New York (“SDNY”) against MoneyLion Technologies Inc., ML Plus LLC and the Company's 38 state lending subsidiaries, alleging violations of the Military Lending Act and the Consumer Financial Protection Act. The CFPB is seeking injunctive relief, redress for allegedly affected consumers and civil monetary penalties. On January 10, 2023, the Company moved to dismiss the lawsuit, asserting various constitutional and merits-based arguments. On June 13, 2023, the CFPB filed its first amended complaint, alleging substantially similar claims as those asserted in its initial complaint. On July 11, 2023, the Company moved to dismiss the lawsuit, again asserting various constitutional and merit-based arguments. On October 9, 2023, the Company moved for a stay of the action pending a decision from the United States Supreme Court in CFPB v. Community Financial Services Association of America, Ltd., No. 22-448 (U.S. argued Oct. 3, 2023) (“CFSA”). On December 1, 2023, the Court issued an order granting the Company’s motion and staying the action pending the United State Supreme Court’s decision in CFSA. The Company continues to maintain that the CFPB’s claims are meritless and is vigorously defending against the lawsuit. Nevertheless, at this time, the Company cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on its business, financial condition, results of operations or cash flows.
On July 21, 2023, Jeffrey Frommer, Lyusen Krubich, Daniel Fried and Pat Capra, the former equity owners of MALKA (collectively, the “Seller Members”), brought a civil action in the SDNY against MoneyLion Technologies Inc. alleging, among other things, breaches of the Membership Interest Purchase Agreement (the “MIPA”) governing the acquisition of MALKA (the “MALKA Acquisition”). Among other claims, the Seller Members allege that they are entitled to payment of $25.0 million of Class A Common Stock pursuant to the earnout provisions set forth in the MIPA, based on the Seller Members’ assertion that MALKA achieved certain financial targets for the year ended December 31, 2022 (such payment, the “2022 Earnout Payment”). The Company believes that the Seller Members are not entitled to any portion of the 2022 Earnout Payment under the terms of the MIPA and that the Seller Members’ claims in their lawsuit are meritless. The Company continues to vigorously defend against the lawsuit and has filed counterclaims against the Seller Members, alleging, among other things, negligent misrepresentation, conversion, breach of fiduciary duties and breach of contract and seeking compensatory damages and other remedies as a result of wrongdoing by the Seller Members. On October 17, 2023, the SDNY denied, in full, the Seller Members’ motion for a preliminary injunction to remove the restrictive legends on certain shares of Class A Common Stock previously issued to the Seller Members. At this time, the Company cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on its business, financial condition, results of operations or cash flows.
On July 27, 2023, MassMutual Ventures US II LLC, Canaan X L.P., Canaan XI L.P., F-Prime Capital Partners Tech Fund LP and GreatPoint Ventures Innovation Fund II, L.P., each of which are former equityholders of Even Financial Inc. and former holders of the Company’s Series A Preferred Stock (collectively, the “Former Preferred Stockholders”), brought a civil action in the SDNY against MoneyLion Inc., its Board of Directors and certain officers seeking declaratory relief and related damages. The Former Preferred Stockholders allege that the 1-for- Reverse Stock Split of the Class A Common Stock effected on April 24, 2023 was undertaken in a manner designed to trigger the Automatic Conversion Event pursuant to which all outstanding shares of Series A Preferred Stock automatically converted into certain shares of Class A Common Stock following the close of trading on the NYSE on May 26, 2023. The Former Preferred Stockholders further allege that the Definitive Proxy Statement the Company filed with the SEC on March 31, 2023 relating to the Special Meeting of Stockholders to approve the Reverse Stock Split proposal contained false and/or misleading statements and material omissions, and that the Company improperly failed to obtain the separate vote of the holders of the Series A Preferred Stock to approve the Reverse Stock Split. In connection therewith, the Former Preferred Stockholders assert claims against all defendants under Section 14(a) of the Securities Exchange Act of 1934 and for breach of the Certificate of Designations governing the Series A Preferred Stock, and a claim against the individual defendants for breach of fiduciary duty. The Company believes that the Former Preferred Stockholders’ claims are meritless, and on November 6, 2023, the Company filed a motion to dismiss the lawsuit in its entirety. The Company intends to vigorously defend against the lawsuit. Nevertheless, at this time, the Company cannot predict or determine the timing or final outcome of this matter or the effect that any adverse determinations in the lawsuit may have on its business, financial condition, results of operations or cash flows. |
Mergers and Acquisitions |
3 Months Ended |
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Mar. 31, 2024 | |
| Mergers and Acquisitions [Abstract] | |
| MERGERS AND ACQUISITIONS | 15. MERGERS AND ACQUISITIONS
Engine—On February 17, 2022, the Company completed the acquisition of all voting interest in Even Financial Inc., which was subsequently renamed to Engine. Engine powers the leading embedded finance marketplace solutions MoneyLion offers to its Enterprise Partners through which consumers are connected and matched with real-time, personalized financial product and service recommendations.
At the closing of the Engine Acquisition, the equityholders and advisors of Even Financial Inc. were entitled to receive a payment from the Company of up to an aggregate of 8,000,000 shares of Series A Preferred Stock, based on the attributed revenue of Engine’s business during the 13-month period commencing January 1, 2022 (the “Earnout”), and certain recipients of options to acquire shares of the Company’s Class A common stock were entitled to receive dividend equivalents in lieu of receiving Series A Preferred Stock, subject to certain conditions (the “Preferred Stock Equivalents”).
The $66 decline in fair value of the Earnout and the Preferred Stock Equivalents for the three months ended March 31, 2023 was included on the consolidated statement of operations as a component of the change in fair value of contingent consideration from mergers and acquisitions.
In May 2023, the Earnout was settled through the issuance of 4,354,092 shares of Series A Preferred Stock, with cash paid in lieu of any fractional shares of Series A Preferred Stock. Cash payments relating to the settlement of the Earnout were $459. In June 2023, the Preferred Stock Equivalents were settled through the issuance of 23,453 shares of Class A Common Stock, with cash paid in lieu of any fractional shares of Class A Common Stock. Cash payments relating to the settlement of the Preferred Stock Equivalents were $307. Upon the Automatic Conversion Event, the MoneyLion Inc. Preferred Share Dividend Replacement Program governing the Preferred Stock Equivalents immediately and automatically terminated in accordance with its terms, following which all Preferred Stock Equivalents were forfeited.
MALKA—On November 15, 2021, MoneyLion completed the MALKA Acquisition. MALKA is a creator network and content platform that provides digital media and content production services to us and to its own clients in entertainment, sports, gaming, live streaming and other sectors.
The unsettled restricted shares payable relating to the MALKA Acquisition earnout and the related make-whole were settled as of March 31, 2023. The $180 decline in fair value for the three months ended March 31, 2023 was included on the consolidated statement of operations as a component of the change in fair value of contingent consideration from mergers and acquisitions. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through May 7, 2024, the date on which these consolidated financial statements were available to be issued, and concluded no subsequent events were required to be disclosed. |
Accounting Policies, by Policy (Policies) |
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| Revenue Recognition and Related Receivables | Revenue Recognition and Related Receivables—The following table summarizes revenue by type for the three months ended March 31, 2024 and 2023:
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments—Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
The Company had no assets measured at fair value on a recurring or non-recurring basis as of March 31, 2024 and December 31, 2023. The Private Placement Warrants (as defined herein) were measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and are further described in Note 12, “Stock Warrants.” The Company had no liabilities measured at fair value on a non-recurring basis as of March 31, 2024 nor December 31, 2023. There have been no transfers between levels during the three months ended March 31, 2024 and 2023.
The Company also has financial instruments which are not measured at fair value. The Company has evaluated cash (Level 1), restricted cash (Level 1) and consumer receivables, net (Level 3) and believes the carrying value approximates the fair value due to the short-term nature of these balances. The carrying value of the secured loans approximates their fair value based on the relatively short duration these instruments have been outstanding and the secured loans' variable interest rate based on market rates. The carrying value of other debt approximates its fair value based on the relatively short duration these instruments have been outstanding and availability of alternative financing sources at similar interest rates with the same terms. The fair value of secured loans and other debt would be based on Level 2 fair value measurements. |
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| Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements—The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which, along with subsequent related ASUs, creates a new credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost (including loans, trade receivables and held-to-maturity debt securities) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a direct write-down. The measurement of credit losses for newly recognized financial assets (other than certain purchased assets) and subsequent changes in the allowance for credit losses are recorded in the statement of operations as the amounts expected to be collected change. The Company adopted ASU 2016-13 and the related subsequent ASUs effective January 1, 2023, and applied the changes prospectively, recognizing a cumulative-effect adjustment to the beginning balance of retained earnings as of the adoption date. Upon adoption, the Company increased consumer receivables, net by $692, decreased enterprise receivables, net by $187 and reduced accumulated deficit by $505. The adoption of the new guidance did not impact the Company’s unaudited consolidated interim statements of operations or cash flows. |
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| Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted—The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012. Accordingly, the Company has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance expands the disclosures required for reportable segments in the Company's annual and interim consolidated financial statements, primarily through enhanced disclosures about significant segment expenses. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2025 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. The standard will be effective for the Company beginning with the Company's annual reporting for fiscal year 2026 and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this standard on its income tax disclosures. |
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Summary of Significant Accounting Policies (Tables) |
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| Schedule of revenue recognition and related receivables |
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Consumer Receivables (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of consumer receivables | Consumer receivables consisted of the following:
|
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| Schedule of changes in the allowance for losses on consumer receivables | Changes in the allowance for losses on loan receivables were as follows:
Changes in the allowance for losses on Instacash receivables were as follows:
Changes in the allowance for losses on fees receivable were as follows:
Changes in the allowance for losses on subscription receivables were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assessment of the repayment performance of loans | The following is an assessment of the repayment performance of loan receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the loan receivables portfolio:
The following is an assessment of the repayment performance of Instacash receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the Instacash receivables portfolio:
The following is an assessment of the repayment performance of fees receivable as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the fees receivable portfolio:
The following is an assessment of the repayment performance of subscription receivables as of March 31, 2024 and December 31, 2023 and presents the contractual delinquency of the subscription receivables portfolio:
|
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Property and Equipment (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of property and equipment | Property and equipment consisted of the following:
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Intangible Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Intangible assets | Intangible assets consisted of the following:
|
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| Schedule of amortization expense of intangible assets | The following table summarizes estimated future amortization expense of intangible assets placed in service at March 31, 2024 for the years ending:
|
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Other Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of other assets consisted | Other assets consisted of the following:
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Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of debt | The Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of long-term operating lease liabilities | Maturities of the Company’s long-term operating lease liabilities, which are included in on the consolidated balance sheet, were as follows:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of represents activity and outstanding equity |
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Stock Warrants (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||
| Stock Warrants [Abstract] | |||||||||||||||||||||||||||||||
| Schedule of changes in the liability related to the private placement warrants | The following table presents the changes in the liability related to the Private Placement Warrants:
|
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Net Income (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schdeule of computation of net income (loss) per common share | The following table sets forth the computation of net income (loss) per share of Class A Common Stock for the three months ended March 31, 2024 and 2023:
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| Schdeule of potential common shares | The following potential shares of Class A Common Stock have been excluded from the computation of diluted net income (loss) per share for the three months ended March 31, 2024 and 2023:
|
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Description of Business and Basis Of Presentation (Details) |
3 Months Ended | |||
|---|---|---|---|---|
|
Apr. 24, 2023
$ / shares
shares
|
Mar. 31, 2024
$ / shares
shares
|
Mar. 31, 2023 |
Dec. 31, 2023
$ / shares
shares
|
|
| Description of Business and Basis Of Presentation (Details) [Line Items] | ||||
| Reclassified to common stock description | every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock | |||
| Reverse stock split ratio | 0.0333 | |||
| Reverse stock split description | 1-for-30 | At the effective time of the Reverse Stock Split, every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock, and the total number of shares of Class A Common Stock authorized for issuance was reduced by a corresponding proportion from 2,000,000,000 shares to 66,666,666 shares. | ||
| Maximum [Member] | ||||
| Description of Business and Basis Of Presentation (Details) [Line Items] | ||||
| Common stock, shares authorized | 2,000,000,000 | |||
| Class A Common Stock [Member] | ||||
| Description of Business and Basis Of Presentation (Details) [Line Items] | ||||
| Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
| Reverse stock split ratio | 0.033 | 0.033 | 0.033 | |
| Number of common shares issued and outstanding or held as treasury stock | 30 | |||
| Common stock, shares authorized | 66,666,666 | 66,666,666 | ||
| Class A Common Stock [Member] | Maximum [Member] | ||||
| Description of Business and Basis Of Presentation (Details) [Line Items] | ||||
| Common stock, shares authorized post reverse stock splits | 66,666,666 | |||
| Series A Preferred Stock [Member] | ||||
| Description of Business and Basis Of Presentation (Details) [Line Items] | ||||
| Convertible preferred stock, par value | $ / shares | $ 0.0001 | |||
| Redeemable convertible preferred stock, shares authorized | 200,000,000 | |||
Summary of Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Jan. 01, 2023 |
|
| Summary of Significant Accounting Policies (Details) [Line Items] | ||||
| Operating lease right-of-use asset | $ 14,319,000 | $ 6,159,000 | ||
| Operating lease liability | 14,987,000 | |||
| Liabilities transfer between level amount | 0 | $ 0 | ||
| Consumer receivables, net | 182,746,000 | 172,838,000 | ||
| Enterprise receivables, net | (1,540,000) | $ (4,130,000) | ||
| Enterprise receivables, net | 17,518,000 | 15,978,000 | ||
| Accumulated deficit | (695,644,000) | (702,719,000) | ||
| Recurring [Member] | ||||
| Summary of Significant Accounting Policies (Details) [Line Items] | ||||
| Assets measured at fair value | 0 | 0 | ||
| Non-recurring [Member] | ||||
| Summary of Significant Accounting Policies (Details) [Line Items] | ||||
| Assets measured at fair value | 0 | 0 | ||
| Liabilities measured at fair value | $ 0 | $ 0 | ||
| ASU 2016-13 [Member] | ||||
| Summary of Significant Accounting Policies (Details) [Line Items] | ||||
| Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
| Accounting pronouncement adoption date | Jan. 01, 2023 | |||
| Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||
| ASU 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
| Summary of Significant Accounting Policies (Details) [Line Items] | ||||
| Consumer receivables, net | $ 692,000 | |||
| Enterprise receivables, net | 187,000 | |||
| Accumulated deficit | $ 505,000 | |||
Summary of Significant Accounting Policies - Schedule of revenue recognition and related receivables (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Consumer revenues | ||
| Service and subscription fees | $ 85,209 | $ 62,438 |
| Net interest income on finance receivables | 2,933 | 2,928 |
| Total consumer revenues | 88,142 | 65,366 |
| Enterprise service revenues | 32,864 | 28,303 |
| Total revenue, net | $ 121,006 | $ 93,669 |
Consumer Receivables (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Contracts Receivable [Abstract] | ||
| Net charge-offs of accrued interest income | $ 237 | $ 307 |
Consumer Receivables - Schedule of consumer receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Schedule of consumer receivables [Abstract] | ||
| Loan receivables | $ 68,918 | $ 66,815 |
| Instacash receivables | 127,491 | 120,336 |
| Finance receivables | 196,409 | 187,151 |
| Fees receivable | 15,102 | 16,137 |
| Subscription receivables | 4,138 | 3,491 |
| Deferred loan origination costs | 60 | 86 |
| Accrued interest receivable | 1,340 | 1,302 |
| Consumer receivables, before allowance for credit losses | $ 217,049 | $ 208,167 |
Consumer Receivables - Schedule of changes in the allowance for losses on consumer receivables (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Consumer Receivables (Details) - Schedule of changes in the allowance for losses on consumer receivables [Line Items] | ||
| Provision for credit losses on receivables | $ 20,230 | $ 16,511 |
| Losses on Loan Receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of changes in the allowance for losses on consumer receivables [Line Items] | ||
| Beginning balance | 5,761 | 5,784 |
| Provision for credit losses on receivables | 368 | 1,520 |
| Receivables charged off | (2,150) | (4,189) |
| Recoveries | 629 | 2,676 |
| Ending balance | 4,608 | 5,791 |
| Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of changes in the allowance for losses on consumer receivables [Line Items] | ||
| Beginning balance | 25,992 | 23,240 |
| Provision for credit losses on receivables | 17,596 | 10,081 |
| Receivables charged off | (23,036) | (19,828) |
| Recoveries | 6,093 | 6,193 |
| Ending balance | 26,645 | 19,686 |
| Losses on Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of changes in the allowance for losses on consumer receivables [Line Items] | ||
| Beginning balance | 2,552 | 908 |
| Provision for credit losses on receivables | 1,595 | 4,174 |
| Receivables charged off | (2,933) | (4,825) |
| Recoveries | 785 | 761 |
| Ending balance | 1,999 | 1,018 |
| Losses on Subscription Receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of changes in the allowance for losses on consumer receivables [Line Items] | ||
| Beginning balance | 1,024 | 1,292 |
| Provision for credit losses on receivables | 671 | 736 |
| Receivables charged off | (1,162) | (1,356) |
| Recoveries | 518 | 306 |
| Ending balance | $ 1,051 | $ 978 |
Consumer Receivables - Schedule of assessment of the repayment performance of loans (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Loan Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 68,918 | $ 66,815 |
| Finance receivables before allowance for credit losses, Percent | 100.00% | 100.00% |
| Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 127,491 | $ 120,336 |
| Finance receivables before allowance for credit losses, Percent | 100.00% | 100.00% |
| Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 15,102 | $ 16,137 |
| Finance receivables before allowance for credit losses, Percent | 100.00% | 100.00% |
| Subscription receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 4,138 | $ 3,491 |
| Finance receivables before allowance for credit losses, Percent | 100.00% | 100.00% |
| Current [Member] | Loan Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 59,681 | $ 58,980 |
| Current, Percent | 86.60% | 88.20% |
| Current [Member] | Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 110,440 | $ 104,541 |
| Current, Percent | 86.60% | 86.90% |
| Current [Member] | Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 12,758 | $ 13,971 |
| Current, Percent | 84.50% | 86.60% |
| Current [Member] | Subscription receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 2,982 | $ 2,786 |
| Current, Percent | 72.10% | 79.80% |
| 31 to 60 days [Member] | Loan Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 5,657 | $ 4,451 |
| Delinquency, Percent | 8.20% | 6.70% |
| 31 to 60 days [Member] | Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 9,567 | $ 8,829 |
| Delinquency, Percent | 7.50% | 7.30% |
| 31 to 60 days [Member] | Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 1,320 | $ 1,197 |
| Delinquency, Percent | 8.70% | 7.40% |
| 31 to 60 days [Member] | Subscription receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 701 | $ 407 |
| Delinquency, Percent | 16.90% | 11.70% |
| 61 to 90 days [Member] | Loan Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 3,580 | $ 3,384 |
| Delinquency, Percent | 5.20% | 5.10% |
| 61 to 90 days [Member] | Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 7,484 | $ 6,966 |
| Delinquency, Percent | 5.90% | 5.80% |
| 61 to 90 days [Member] | Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 1,024 | $ 969 |
| Delinquency, Percent | 6.80% | 6.00% |
| 61 to 90 days [Member] | Subscription receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 455 | $ 298 |
| Delinquency, Percent | 11.00% | 8.50% |
| Total Delinquency [Member] | Loan Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 9,237 | $ 7,835 |
| Delinquency, Percent | 13.40% | 11.80% |
| Total Delinquency [Member] | Finance Receivable Instacash [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 17,051 | $ 15,795 |
| Delinquency, Percent | 13.40% | 13.10% |
| Total Delinquency [Member] | Fees Receivable [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 2,344 | $ 2,166 |
| Delinquency, Percent | 15.50% | 13.40% |
| Total Delinquency [Member] | Subscription receivables [Member] | ||
| Consumer Receivables (Details) - Schedule of assessment of the repayment performance of loans [Line Items] | ||
| Finance receivables before allowance for credit losses, Amount | $ 1,156 | $ 705 |
| Delinquency, Percent | 27.90% | 20.20% |
Property and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 186 | $ 304 |
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Furniture and equipment, gross | $ 4,712 | $ 4,844 |
| Less: accumulated depreciation | (2,737) | (2,980) |
| Furniture and equipment, net | 1,975 | 1,864 |
| Leasehold improvements [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Furniture and equipment, gross | 1,860 | 1,932 |
| Furniture and fixtures [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Furniture and equipment, gross | 255 | 361 |
| Computers and equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Furniture and equipment, gross | $ 2,597 | $ 2,551 |
Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Costs capitalized in connection with internal use software | $ 1,860 | $ 1,162 |
| Amortization expense | $ 6,026 | $ 5,880 |
Intangible Assets - Schedule of Intangible assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Intangible Assets (Details) - Schedule of Intangible assets [Line Items] | ||
| Proprietary technology and capitalized internal-use software | $ 44,943 | $ 43,105 |
| Work in process | 1,680 | 1,695 |
| Customer relationships | 160,500 | 160,500 |
| Trade names | 15,960 | 15,960 |
| Less: accumulated amortization | (50,708) | (44,719) |
| Intangible assets, net | $ 172,375 | $ 176,541 |
| Minimum [Member] | ||
| Intangible Assets (Details) - Schedule of Intangible assets [Line Items] | ||
| Proprietary technology and capitalized internal-use software, Useful Life | 3 years | |
| Customer relationships, Useful Life | 10 years | |
| Trade names, Useful Life | 9 years | |
| Maximum [Member] | ||
| Intangible Assets (Details) - Schedule of Intangible assets [Line Items] | ||
| Proprietary technology and capitalized internal-use software, Useful Life | 7 years | |
| Customer relationships, Useful Life | 15 years | |
| Trade names, Useful Life | 15 years |
Intangible Assets - Schedule of amortization expense of intangible assets (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
|---|---|
| Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
| Remainder of 2024 | $ 18,173 |
| 2025 | 24,231 |
| 2026 | 24,231 |
| 2027 | 23,659 |
| 2028 | 21,350 |
| Thereafter | 59,051 |
| Total | $ 170,695 |
Other Assets - Schedule of other assets consisted (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Schedule of other assets consisted [Abstract] | ||
| Receivable from payment processors | $ 35,722 | $ 37,362 |
| Prepaid expenses | 7,239 | 5,987 |
| Operating lease right-of-use assets | $ 14,319 | $ 6,159 |
| Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total other assets | Total other assets |
| Other | $ 4,124 | $ 4,051 |
| Total other assets | $ 61,404 | $ 53,559 |
Debt (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended |
|---|---|---|
Sep. 30, 2021 |
Mar. 31, 2024 |
|
| Debt Instrument [Line Items] | ||
| Debt description | The interest rate as of March 31, 2024 on the Term A-1 Loans was 14.56 | |
| ROAR 1 SPV Finance LLC [Member] | ||
| Debt Instrument [Line Items] | ||
| Credit agreement | $ 100,000 | $ 80,000 |
| Maximum borrowings under the agreement | $ 200,000 | |
| Bears interest rate | 12.50% | |
| Maturity date | 2025-03 | |
| Monroe Term Loan [Member] | Term A-1 Loans [Member] | ||
| Debt Instrument [Line Items] | ||
| Borrowings under the agreement | $ 65,000 | |
| Debt instrument, stated percentage | 14.56% |
Debt (Details) - Schedule of debt - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Unamortized discounts and debt issuance costs | $ (592) | $ (666) |
| Total secured loans, net | 64,408 | 64,334 |
| Unamortized discounts and debt issuance costs | (1,325) | (1,581) |
| Total other debt, net | 129,675 | 125,419 |
| Monroe Term Loan [Member] | ||
| Debt Instrument [Line Items] | ||
| Total secured loans, net | 65,000 | 65,000 |
| ROAR 1 SPV Credit Facility [Member] | ||
| Debt Instrument [Line Items] | ||
| Total other debt, net | 66,500 | 64,500 |
| ROAR 2 SPV Credit Facility [Member] | ||
| Debt Instrument [Line Items] | ||
| Total other debt, net | $ 64,500 | $ 62,500 |
Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Leases [Abstract] | ||
| Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |
| Lessee, Operating Lease, Existence of Option to Terminate [true false] | true | |
| Lease expenses related to long-term leases | $ 1,104 | $ 796 |
| Net rental income from subleases | $ 166 | |
| Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | |
Leases - Schedule of long-term operating lease liabilities (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
|---|---|
| Leases [Abstract] | |
| Remainder of 2024 | $ 3,069 |
| 2025 | 4,706 |
| 2026 | 3,486 |
| 2027 | 3,334 |
| 2028 | 3,271 |
| Thereafter | 2,939 |
| Total lease payments | 20,805 |
| Less: imputed interest | 5,818 |
| Lease liabilities | $ 14,987 |
| Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent |
| Weighted-average remaining lease term (years) | 4 years 9 months 18 days |
| Weighted-average discount rate | 13.20% |
Income Taxes (Details) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Income Taxes (Details) [Line Items] | ||
| Effective tax rate | (5.80%) | 0.30% |
Common and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
|---|---|---|---|---|
May 26, 2023 |
Mar. 31, 2024 |
May 22, 2023 |
Feb. 17, 2022 |
|
| Class of Stock [Line Items] | ||||
| Common stock voting rights | one | |||
| Conversion basis | Shares of Series A Preferred Stock were convertible into shares of Class A Common Stock on a one-for-thirty basis, subject to customary anti-dilution adjustments. | |||
| Series A Preferred Stock [Member] | ||||
| Class of Stock [Line Items] | ||||
| Convertible preferred stock liquidation preference per share | $ 10 | |||
| Redeemable convertible preferred stock (in Shares) | 4,354,092 | 8,000,000 | ||
| Redeemable convertible preferred stock, shares outstanding | 30,049,053 | |||
| Redeemable convertible preferred stock, shares issued | 30,049,053 | |||
| Class A Common Stock [Member] | ||||
| Class of Stock [Line Items] | ||||
| Volume-weighted average price | $ 10 | $ 10 | ||
| Redeemable convertible preferred stock (in Shares) | 1,012,293 | 229,605 | ||
| Cash paid to equityholders | $ 3.0 |
Stock-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Share-Based Payment Arrangement [Abstract] | ||
| Stock-based compensation | $ 6,497 | $ 5,705 |
Stock-Based Compensation (Details) - Schedule of represents activity and outstanding equity - Omnibus Incentive Plan |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
$ / shares
shares
| |
| Restricted Stock Unit [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Vesting Conditions | Service-based |
| Units Granted (in Shares) | shares | 335,531 |
| Weighted Average Grant Date Fair Value | $ 49.83 |
| Units Outstanding | shares | 1,000,559 |
| Outstanding Equity Awards, Weighted Average Grant Date Fair Value | $ 37.43 |
| Performance Stock Unit [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Vesting Conditions | Service and performance-based |
| Units Granted (in Shares) | shares | 85,090 |
| Weighted Average Grant Date Fair Value | $ 52.55 |
| Units Outstanding | shares | 230,159 |
| Outstanding Equity Awards, Weighted Average Grant Date Fair Value | $ 33.61 |
| Performance Stock Unit One [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Vesting Conditions | Service and market-based |
| Units Outstanding | shares | 273,894 |
| Outstanding Equity Awards, Weighted Average Grant Date Fair Value | $ 14.08 |
| Options [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Vesting Conditions | Service-based |
| Units Outstanding | shares | 587,402 |
| Outstanding Equity Awards, Weighted Average Grant Date Fair Value | $ 20.15 |
| Outstanding Equity Awards, Weighted Average Strike Price | $ 30.46 |
Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Stock Warrants (Details) [Line Items] | ||
| Additional paid-in capital | $ 975,801 | $ 969,641 |
| Private Placement Warrants [Member] | ||
| Stock Warrants (Details) [Line Items] | ||
| Warrants outstanding | 270,000 | |
| Public Warrants [Member] | ||
| Stock Warrants (Details) [Line Items] | ||
| Warrants outstanding | 583,333 | |
| Additional paid-in capital | $ 23,275 | |
| Warrant price per share | $ 0.9 |
Stock Warrants - Schedule of changes in the liability related to the private placement warrants (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
USD ($)
| |
| Stock Warrants (Details) - Schedule of changes in the liability related to the private placement warrants [Line Items] | |
| Warrants payable balance, December 31, 2022 | $ 810 |
| Warrants payable balance, March 31, 2023 | 729 |
| Private Placement Warrants [Member] | |
| Stock Warrants (Details) - Schedule of changes in the liability related to the private placement warrants [Line Items] | |
| Warrants payable balance, December 31, 2022 | 810 |
| Mark-to-market adjustment | (81) |
| Warrants payable balance, March 31, 2023 | $ 729 |
Net Income (Loss) Per Share - Schedule of computation of net income (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Numerator: | ||
| Net income (loss) | $ 7,075 | $ (9,217) |
| Accrual of dividends on preferred stock | (1,977) | |
| Net income (loss) attributable to common shareholders | $ 7,075 | $ (11,194) |
| Denominator: | ||
| Weighted-average common shares outstanding - basic (in Shares) | 10,526,417 | 8,652,218 |
| Plus: dilutive effect of common stock equivalents | 1,284,500 | |
| Weighted-average common shares outstanding - diluted (in Shares) | 11,810,917 | 8,652,218 |
| Net income (loss) per share attributable to common stockholders - basic | $ 0.67 | $ (1.29) |
| Net income (loss) per share attributable to common stockholders - diluted | $ 0.60 | $ (1.29) |
Net Income (Loss) Per Share (Details) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Net Income Loss Per Share (Details) [Line Items] | ||
| Antidilutive securities excluded from computation diluted net income per share | 1,790,083 | 4,931,647 |
| Performance Stock Unit [Member] | ||
| Net Income Loss Per Share (Details) [Line Items] | ||
| Antidilutive securities excluded from computation diluted net income per share | 85,090 | |
| MALKA acquisition [Member] | ||
| Net Income Loss Per Share (Details) [Line Items] | ||
| Right to receive shares, contingent consideration, expiration date | Sep. 22, 2026 | |
| Class A Common Stock | ||
| Net Income Loss Per Share (Details) [Line Items] | ||
| Antidilutive securities excluded from computation diluted net income per share | 268,330 | |
| Class A Common Stock | Earnout Shares upon Achieving Milestone One [Member] | MALKA acquisition [Member] | ||
| Net Income Loss Per Share (Details) [Line Items] | ||
| Shares issuable upon reaching certain price milestones | 250,000 | |
| Share Price | $ 375 | |
| Class A Common Stock | Earnout Shares upon Achieving Milestone Two [Member] | MALKA acquisition [Member] | ||
| Net Income Loss Per Share (Details) [Line Items] | ||
| Shares issuable upon reaching certain price milestones | 333,333 | |
| Share Price | $ 495 | |
Net Income (Loss) Per Share - Schedule of potential common shares (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total common stock equivalents | 1,790,083 | 4,931,647 |
| Conversion of Convertible Preferred Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total common stock equivalents | 856,720 | |
| Warrants to Purchase Common Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total common stock equivalents | 853,330 | 853,330 |
| PSUs, RSUs and Options to Purchase Common Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total common stock equivalents | 353,420 | 2,638,264 |
| Right to Receive Earnout Shares [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total common stock equivalents | 583,333 | 583,333 |
Commitments And Contingencies (Details) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Apr. 24, 2023 |
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023 |
|
| Unrecorded Unconditional Purchase Obligation [Line Items] | |||
| Reverse stock split description | 1-for-30 | At the effective time of the Reverse Stock Split, every 30 shares of Class A Common Stock either issued and outstanding or held as treasury stock were automatically reclassified into one new share of Class A Common Stock, and the total number of shares of Class A Common Stock authorized for issuance was reduced by a corresponding proportion from 2,000,000,000 shares to 66,666,666 shares. | |
| Reverse stock split ratio | 0.0333 | ||
| Common Class A [Member] | |||
| Unrecorded Unconditional Purchase Obligation [Line Items] | |||
| Reverse stock split ratio | 0.033 | 0.033 | 0.033 |
| MALKA acquisition [Member] | |||
| Unrecorded Unconditional Purchase Obligation [Line Items] | |||
| Earnout Payment | $ 25.0 | ||
Mergers and Acquisitions (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||
|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2024 |
Jun. 30, 2023 |
May 26, 2023 |
May 22, 2023 |
Feb. 17, 2022 |
|
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Increase (decrease) consideration amount | $ (180) | |||||
| Earnout [Member] | ||||||
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Cash paid to equityholders | $ 459 | |||||
| Preferred Stock Equivalents | ||||||
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Cash paid to equityholders | $ 307 | |||||
| Earnout And Preferred Stock Equivalents Member | ||||||
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Increase (decrease) consideration amount | $ 66 | |||||
| Series A Preferred Stock [Member] | ||||||
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Series A convertible preferred stock (in Shares) | 4,354,092 | 8,000,000 | ||||
| Class A Common Stock | ||||||
| Mergers and Acquisitions (Details) [Line Items] | ||||||
| Series A convertible preferred stock (in Shares) | 229,605 | 1,012,293 | ||||
| Cash paid to equityholders | $ 3,000 | |||||
| Common stock issued to settle preferred stock equivalents | 23,453 |
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