ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
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Emerging growth company |
Cautionary Note Regarding Forward-Looking Statements |
Page |
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Risk Factors Summary |
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PART I |
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ITEM 1. |
4 |
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ITEM 1A. |
18 |
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ITEM 1B. |
46 |
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ITEM 2. |
46 |
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ITEM 3. |
46 |
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ITEM 4. |
47 |
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PART II |
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ITEM 5. |
48 |
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ITEM 6. |
49 |
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ITEM 7. |
49 |
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ITEM 7A. |
51 |
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ITEM 8. |
51 |
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ITEM 9. |
75 |
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ITEM 9A. |
75 |
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ITEM 9B. |
75 |
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PART III |
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ITEM 10. |
76 |
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ITEM 11. |
82 |
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ITEM 12. |
88 |
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ITEM 13. |
89 |
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ITEM 14. |
93 |
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PART IV |
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ITEM 15. |
95 |
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ITEM 16. |
96 |
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96 |
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98 |
• | the ability of Dave to compete in its highly competitive industry. |
• | the ability of Dave to keep pace with the rapid technological developments in its industry and the larger financial services industry |
• | the ability of Dave to manage its growth as a public company; |
• | the ability of Dave to protect intellectual property and trade secrets; |
• | changes in applicable laws or regulations and extensive and evolving government regulations that impact operations and business; |
• | the ability to attract or maintain a qualified workforce; |
• | level of product service failures that could lead Dave members (“Members”) to use competitors’ services; |
• | investigations, claims, disputes, enforcement actions, litigation and/or other regulatory or legal proceedings; |
• | the ability to maintain the listing of Dave Class A Common Stock on Nasdaq; |
• | the effects of the COVID-19 pandemic on Dave’s business; |
• | the possibility that Dave may be adversely affected by other economic, business, and/or competitive factors; and |
• | other risks and uncertainties described under Item 1A., “Risk Factors” of this Annual Report on Form 10-K. |
• | references to the “Company,” “Dave,” “we,” “us,” “our” and similar terms refer to Dave Inc. (f/k/a VPC Impact Acquisition Holdings III, Inc.) and its consolidated subsidiaries; |
• | references to “VPCC” are to VPC Impact Acquisition Holdings III, Inc. and its consolidated subsidiaries prior to the close of the Business Combination; and |
• | references to “Sponsor” are to VPC Impact Acquisition Holdings Sponsor III, LLC. |
• | Offering a suite of products that help solve critical Member pain points, driving low acquisition costs. |
• | Creating frictionless access to a suite of financial products. |
• | Leveraging data to offer ExtraCash at unbeatable prices and speed to value. |
• | Focusing on community building with our Member base. |
• | Generating a “flywheel” by cross-selling existing Members to new products at no additional Member acquisition costs, resulting in lower consumer pricing. |
For Years Ended December 31, |
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2020 |
2021 |
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Average 28-Day Delinquency Rates |
4.34 | % | 3.93 | % |
• | Zero account minimums; |
• | 37,000 MoneyPass ATM network locations to make no-fee withdrawals; |
• | Paychecks delivered up to two days earlier than the scheduled payment date with direct deposit into the Dave Banking account, a feature accessible with no additional mandatory fees; |
• | Access to mobile wallets such as Apple Pay and Google Pay; |
• | Access to a free credit-building membership, where Members can build credit based on rent and utility payments made from their account; and |
• | Up to $250 in ExtraCash capacity for short-term emergencies. |
• | Service Revenue |
• | Insights (subscription fee) |
• | ExtraCash (optional instant transfer convenience fees and optional tips) |
• | Other (Side Hustle lead) |
• | Transaction Revenue |
• | Dave Banking (interchange fees, out-of-network |
• | Continue penetrating our large addressable market; |
• | Accelerate cross-sell into Dave Banking; |
• | Scale new Dave Banking Members; |
• | Deliver new products and features to cross-sell to Members; and |
• | Evaluate additional strategic acquisitions. |
• | Banking Competitors non-bank digital providers that white-label regulated products, offering banking-related services (e.g., Chime). |
• | Lending and Earned Income Advance Competitors non-bank providers, offering consumer lending-related or advance products (e.g., Upstart, MoneyLion). |
• | Innovators in Consumer Finance |
• | Federal Trade Commission Act |
• | Truth in Savings Act. . |
• | Electronic Fund Transfer Act and NACHA Rules non-recourse cash advances are performed by electronic fund transfers, including ACH transfers. We also facilitate the electronic transfer of funds requested by our Members between their deposit accounts with Evolve and their accounts at other financial institutions. |
• | Payday, Vehicle Title, and Certain High-Cost Installment Loans Final Rule |
• | Gramm-Leach-Bliley Act. |
• | The industries in which we compete are highly competitive, which could adversely affect our results of operations. |
• | If we are unable to keep pace with the rapid technological developments in our industry and the larger financial services industry necessary to continue providing our Members with new and innovative products and services, the use of our platform and other products and services could decline. In addition, if the prices we charge for our products and services are unacceptable to our Members, our operating results will be harmed. |
• | Our non-recourse cash advances expose us to credit risk of our Members and if our underwriting criteria for making advances is not sufficient to mitigate against this risk, our financial condition and operating results could be adversely affected if a substantial number of our Members fail to repay the cash advance they receive. |
• | We may not be able to scale our business quickly enough to meet our Members’ growing needs, and if we are not able to grow efficiently, our operating results could be harmed. |
• | If we are unable to acquire new Members and retain our current members or sell additional functionality and services to them, our revenue growth will be adversely affected. |
• | We have historically incurred losses in the operation of our business. We may never achieve or sustain profitability. |
• | We operate in an uncertain regulatory environment and may from time to time be subject to governmental investigations or other inquiries by state, federal and local governmental authorities. |
• | The financial services industry continues to be targeted by new laws or regulations in many jurisdictions, including the U.S. states in which we operate, that could restrict the products and services we offer, impose additional compliance costs on us, render our current operations unprofitable or even prohibit our current operations. |
• | Our business is subject to extensive regulation and oversight in a variety of areas, including registration and licensing requirements under federal, state and local laws and regulations. |
• | Stringent and changing laws and regulations relating to privacy and data protection could result in claims, harm our results of operations, financial condition, and future prospects, or otherwise harm our business. |
• | Dave identified material weaknesses in its internal control over financial reporting in its audited financial statements for the years ended December 31, 2021 and 2020, and if Dave is unable to |
remediate these material weaknesses, or if it identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect Dave’s business and share price. |
• | Dave’s forecasted operating results and projections rely in large part upon assumptions, analyses and internal estimates developed by Dave’s management. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Dave’s actual operating results may differ materially and adversely from those forecasted or projected. |
• | Fraudulent and other illegal activity involving our products and services could lead to reputational damage to us, reduce the use of our platform and services and may adversely affect our financial position and results of operations. |
• | In the normal course of business, we collect, process, use and retain sensitive and confidential information regarding our Members and prospective Members, including data provided by and related to Members and their transactions, as well as other data of the counterparties to their payments. A data security breach could expose us to liability and protracted and costly litigation, and could adversely affect our reputation and operating revenues. |
• | Dave’s management has limited experience in operating a public company. |
• | We transfer funds to our Members daily, which in the aggregate comprise substantial sums, and are subject to the risk of errors, which could result in financial losses, damage to our reputation, or loss of trust in our brand, which would harm our business and financial results. |
• | Dave Inc. has guaranteed up to $50,000,000 of one of its subsidiary’s obligations under a credit facility, and currently that limited guaranty is secured by a first-priority lien against substantially all of Dave Inc.’s assets. The credit facility contains financial covenants and other restrictions on our actions, which could limit our operational flexibility and otherwise adversely affect our financial condition. |
• | If our present or any future key banking relationships are terminated and we are not able to secure or successfully migrate client portfolios to a new bank partner or partners, our business would be adversely affected. |
• | We depend upon several third-party service providers for processing our transactions and provide other important services for our business. If any of our agreements with our processing providers are terminated or if we experience any interruption or delay in the services provided by our third-party service providers, delivery of our products and services could be impaired or suspended and our business could suffer. |
• | Our recent rapid growth, including growth in our volume of payments, may not be indicative of future growth, and if we continue to grow rapidly, we may not be able to manage our growth effectively. Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. |
• | build a well-recognized, trusted and respected brand; |
• | establish and expand our Member base; |
• | successfully market our products and services; |
• | properly price our services and successfully anticipate the usage of such services by our Members; |
• | improve and maintain our operational efficiency; |
• | maintain a reliable, secure, high-performance and scalable technology infrastructure; |
• | predict our future revenues and appropriately budget our expenses; |
• | attract, retain and motivate talented employees; |
• | anticipate trends that may emerge and affect our business; |
• | anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and |
• | navigate an evolving and complex regulatory environment. |
• | price our products and services effectively to attract new Members; |
• | Create new products and expand the functionality and scope of the products we offer on our platform; |
• | maintain the rates at which Members subscribe to and continue to use our platform; |
• | provide our Members with high-quality support that meets their needs; |
• | introduce our products to new markets; |
• | successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our platform; |
• | increase awareness of our brand and successfully compete with other companies; and |
• | manage the risks related to the effects of the COVID-19 pandemic on our business and operations. |
• | product development, including investments in our product development team and the development of new products and new functionality for our platform; |
• | sales, marketing and customer success; |
• | technology infrastructure, including systems architecture, scalability, availability, performance and security; |
• | acquisitions and/or strategic investments; |
• | regulatory compliance and risk management; and |
• | general administration, including increased legal and accounting expenses associated with being a public company. |
• | market our products and services; |
• | hire additional marketing, client support, engineering, product development and administrative personnel; and |
• | expand our client support and service operations; and |
• | implement new and upgraded operational and financial systems, procedures and controls. |
• | the election by our Members of expedited processing of our non-recourse cash advance product; |
• | the timing and volume of tips our Members send to us; |
• | the timing and volume of advance repayments; |
• | the timing and volume of subscriptions and use of our products and services; |
• | the timing and success of new product or service introductions by us or our competitors; |
• | fluctuations in Member retention rates; |
• | changes in the mix of products and services that we provide to our Members; |
• | the timing of commencement of new product development and initiatives, the timing of costs of existing product roll-outs and the length of time we must invest in those new products before they generate material operating revenues; |
• | our ability to effectively sell our products through direct-to-consumer initiatives; |
• | changes in our or our competitors’ pricing policies or sales terms; |
• | costs associated with significant changes in our risk policies and controls; |
• | the amount and timing of costs related to fraud losses; |
• | the amount and timing of commencement and termination of major advertising campaigns, including partnerships and sponsorships; |
• | disruptions in the performance of our products and services, and the associated financial impact thereof; |
• | the amount and timing of costs of any major litigation to which we are a party; |
• | the amount and timing of costs related to the acquisition of complementary businesses; |
• | the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business; |
• | changes in our executive leadership team; |
• | our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market; and |
• | changes in the political or regulatory environment affecting the banking or financial technology service industries. |
• | loss of Members; |
• | lost or delayed market acceptance and sales of our products and services; |
• | legal claims against us; |
• | regulatory enforcement action; or |
• | diversion of our resources, including through increased service expenses or financial concessions, and increased insurance costs. |
• | Dave did not design and maintain certain formal accounting policies, procedures, and internal controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including internal controls over the period-end financial reporting process addressing financial statement and footnote presentation and disclosures, account reconciliations, and journal entries. Additionally, the lack of a sufficient number of accounting and finance professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of Dave’s financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties within the finance and accounting functions. |
• | Dave did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of its financial statements, specifically, with respect to: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, |
programs, and data to appropriate company personnel: and (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored. |
• | actual or anticipated fluctuations in operating results; |
• | failure to meet or exceed financial estimates and projections of the investment community or that Dave provides to the public; |
• | issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; |
• | announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
• | operating and share price performance of other companies in the industry or related markets; |
• | the timing and magnitude of investments in the growth of the business; |
• | actual or anticipated changes in laws and regulations; |
• | additions or departures of key management or other personnel; |
• | increased labor costs; |
• | disputes or other developments related to intellectual property or other proprietary rights, including litigation; |
• | the ability to market new and enhanced solutions on a timely basis; |
• | sales of substantial amounts of the Dave Class A Common Stock by Dave’s directors, executive officers or significant stockholders or the perception that such sales could occur; |
• | changes in capital structure, including future issuances of securities or the incurrence of debt; and |
• | general economic, political and market conditions. |
• | may significantly dilute the equity interests of our investors; |
• | could cause a change in control if a substantial number of shares of Dave Class A Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for the Dave Class A Common Stock and/or the Public Warrants. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that the Dave Class A Common Stock is a “penny stock” which will require brokers trading in the Dave Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to Dave; |
• | changes in the market’s expectations about Dave’s operating results; |
• | success of competitors; |
• | Dave’s operating results failing to meet the expectation of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning Dave or the market in general; |
• | operating and stock price performance of other companies that investors deem comparable to Dave; |
• | Dave’s ability to market new and enhanced products and technologies on a timely basis; |
• | changes in laws and regulations affecting Dave’s business; |
• | Dave’s ability to meet compliance requirements; |
• | commencement of, or involvement in, litigation involving Dave; |
• | changes in Dave’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of Dave Class A Common Stock available for public sale; |
• | any major change in the Board or management; |
• | sales of substantial amounts of Dave Class A Common Stock by Dave’s directors, executive officers or significant stockholders or the perception that such sales could occur; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. |
Page No. |
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F-54 |
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F-55 |
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F-56 |
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F-57 |
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F-58 |
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F-59 |
F-54 |
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Financial Statements: |
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F-55 |
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F-56 |
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F-57 |
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F-58 |
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F-59 to F-74 |
ASSETS |
||||
Current Assets |
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Cash |
$ | |||
Prepaid expenses |
||||
|
|
|||
Total Current Assets |
||||
Cash held in Trust Account |
||||
|
|
|||
TOTAL ASSETS |
$ |
|||
|
|
|||
LIABILITIES, CLASS A COMMON STOCK TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
||||
Current Liabilities |
||||
Accrued expenses |
$ | |||
|
|
|||
Total Current Liabilities |
||||
Warrant liabilities |
||||
Deferred underwriting fee payable |
||||
|
|
|||
TOTAL LIABILITIES |
||||
|
|
|||
Commitments |
||||
Class A common stock subject to possible redemption |
||||
|
|
|||
Stockholders’ Deficit |
||||
Preferred stock, $ |
||||
Class A common stock, $ |
||||
Class B common stock, $ |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total Stockholders’ Deficit |
( |
) | ||
|
|
|||
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
$ |
|||
|
|
Formation and operational costs |
$ | |||
|
|
|||
Loss from operations |
( |
) | ||
|
|
|||
Other income (expense): |
||||
Changes in fair value of warrant liabilities |
||||
Transaction costs allocated to warrant liabilities |
( |
) | ||
Fair value of Private Placement Warrant liability in excess of proceeds received |
( |
) | ||
Interest earned on Trust Account |
||||
|
|
|||
Total other income, net |
||||
|
|
|||
Net loss |
$ |
( |
) | |
|
|
|||
Weighted average shares outstanding of Class A common stock |
||||
|
|
|||
Basic and diluted net loss per share, Class A common stock |
$ |
( |
) | |
|
|
|||
Weighted average shares outstanding of Class B common stock (1) |
||||
|
|
|||
Basic and diluted net loss per share, Class B common stock |
$ |
( |
) | |
|
|
(1) | In connection with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining overallotment option on March 9, 2021, |
Class B Common Stock |
Additional Paid in Capital |
Accumulated Deficit |
Total Stockholder’s Deficit |
|||||||||||||||||
Shares |
Amount |
|||||||||||||||||||
Balance – January 14, 2021 (Inception) |
$ | $ | $ | $ | ||||||||||||||||
Issuance of Class B common stock to Sponsor (1) |
||||||||||||||||||||
Accretion for Class A common stock to redemption amount |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||
Forfeiture of Founder Shares |
( |
) | ( |
) | ||||||||||||||||
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance – December 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | In connection with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining overallotment option on March 9, 2021, |
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
Interest earned on investments held in Trust Account |
( |
) | ||
Changes in fair value of warrant liabilities |
( |
) | ||
Transaction costs allocated to warrant liabilities |
||||
Fair value of Private Placement Warrant liability in excess of proceeds received |
||||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accrued expenses |
||||
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
Cash Flows from Investing Activities: |
||||
Investment of cash into Trust Account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
Cash Flows from Financing Activities: |
||||
Proceeds from sale of Units, net of underwriting discounts paid |
||||
Proceeds from sale of Private Placements Warrants |
||||
Repayment of promissory note—related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
|
|
|||
Net Change in Cash |
||||
Cash—Beginning of period |
||||
|
|
|||
Cash—End of period |
$ |
|||
|
|
|||
Non-cash Investing and Financing Activities: |
||||
Offering costs paid by Sponsor in exchange for issuance of Founder Shares |
$ | |||
|
|
|||
Offering costs paid through promissory note |
$ | |||
|
|
|||
Deferred underwriting fee payable |
$ | |||
|
|
|||
Forfeiture of Founder Shares |
$ | ( |
) | |
|
|
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to Public Warrants |
( |
) | ||
Class A common stock issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
Class A common stock subject to possible redemption |
$ | |||
For the Period from January 14, 2021 (Inception) Through December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per common share |
||||||||
Numerator: |
||||||||
Allocation of net loss, as adjusted |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average common shares outstanding |
||||||||
|
|
|
|
|||||
Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
) |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the closing price of Class A common stock equals or exceeds $ |
• | in whole and not in part; |
• | at $ |
• | if, and only if, the closing price of Class A common stock equals or exceeds $ |
December 31, 2021 |
||||
Deferred tax asset |
||||
Net operating loss carryforward |
$ | |||
Startup/Organizational expenses |
||||
Total deferred tax assets |
||||
Valuation allowance |
( |
) | ||
Deferred tax assets, net of allowance |
$ | |||
December 31, 2021 |
||||
Federal |
||||
Current |
$ | |||
Deferred |
( |
) | ||
State |
||||
Current |
$ | |||
Deferred |
||||
Change in valuation allowance |
||||
Income tax provision |
$ | |||
December 31, 2021 |
||||
Statutory federal income tax rate |
% | |||
State taxes, net of federal tax benefit |
||||
Chang in fair value of warrant liabilities |
||||
Transaction costs allocated to warrant liabilities |
( |
) | ||
Compensation expense—warrants |
( |
) | ||
Change in valuation allowance |
( |
) | ||
Income tax provision |
% | |||
Description |
December 31, 2021 |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
||||||||||||
Liabilities: |
||||||||||||||||
Warrant Liability—Public Warrants |
$ | $ | $ | $ | ||||||||||||
Warrant Liability—Private Placement Warrants |
$ | $ | $ | $ | ||||||||||||
January 12, 2021 |
||||||||||||
(Initial Measurement) |
December 31, 2021 |
|||||||||||
Input |
Public Warrants |
Private Warrants |
Private Warrants |
|||||||||
Stock Price |
$ | $ | $ | |||||||||
Exercise Price |
$ | $ | $ | |||||||||
Volatility |
% | % | % | |||||||||
Term (years) |
||||||||||||
Dividend Yield |
% | % | % | |||||||||
Risk Free Rate |
% | % | % |
Private Placement |
Public |
Warrant Liabilities |
||||||||||
Fair value as of January 14, 2021 (inception) |
$ | $ | $ | |||||||||
Initial measurement on March 9, 2021 (Initial Public Offering) |
||||||||||||
Change in fair value |
( |
) | ||||||||||
Transfer to Level 1 |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Fair value as of December 31, 2021 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Item 10. |
Directors, Executive Officers and Corporate Governance |
Name |
Age |
Position(s) | ||||
Executive Officers Jason Wilk |
36 | Chief Executive Officer, President and Director | ||||
Kyle Beilman |
34 | Chief Financial Officer and Secretary | ||||
Non-Employee DirectorsBrendan Carroll |
44 | Director (1)(3) | ||||
Andrea Mitchell |
50 | Director (2)(3) | ||||
Michael Pope |
55 | Director (1) | ||||
Dan Preston |
36 | Director (1)(2) |
(1) | Member of the audit committee. |
(2) | Member of the compensation committee. |
(3) | Member of the nominating and corporate governance committee. |
• | Class I, which consists of Michael Pope, whose term will expire at Dave’s first annual meeting of stockholders to be held in 2022; |
• | Class II, which consists of Dan Preston and Andrea Mitchell, whose terms will expire at Dave’s second annual meeting of stockholders to be held in 2023; and |
• | Class III, which consists of Jason Wilk and Brendan Carroll, whose terms will expire at Dave’s third annual meeting of stockholders to be held in 2024. |
• | appointing, compensating, retaining, evaluating, terminating and overseeing Dave’s independent registered public accounting firm; |
• | reviewing the adequacy of Dave’s system of internal controls and the disclosure regarding such system of internal controls contained in Dave’s periodic filings; |
• | pre-approving all audit and permitted non-audit services and related engagement fees and terms for services provided by Dave’s independent auditors; |
• | reviewing with Dave’s independent auditors their independence from management; |
• | reviewing, recommending and discussing various aspects of the financial statements and reporting of the financial statements with management and Dave’s independent auditors; and |
• | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters. |
• | setting the compensation of the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviewing and approving the compensation of the other executive officers of Dave; |
• | reviewing on a periodic basis and making recommendations regarding non-employee director compensation to the Board; |
• | reviewing on a periodic basis and discussing with the Chief Executive Officer and the Board regarding the development and succession plans for senior management positions; |
• | administering Dave’s cash and equity-based incentive plans that are stockholder-approved and/or where participants include Dave’s executive officers and directors; and |
• | providing oversight of and recommending improvements to Dave’s overall compensation and incentive plans and benefit programs. |
• | identifying, evaluating and making recommendations to the Board regarding nominees for election to the board of directors and its committees; |
• | developing and making recommendations to the Board regarding corporate governance guidelines and matters; |
• | overseeing the Dave’s corporate governance practices; |
• | reviewing the Dave’s code of business conduct and ethics and approve any amendments or waivers on a periodic basis; |
• | overseeing the evaluation and the performance of the Board and individual directors; and |
• | contributing to succession planning. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | Jason Wilk: Chief Executive Officer |
• | Kyle Beilman: Chief Financial Officer |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) (1) |
Option Awards ($) (1) |
Non-Equity Incentive Plan Compensation ($) (2) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||||||||
Jason Wilk |
2021 | $ | 384,719 | — | (4) |
— | $ | 10,508,000 | — | $ | 13,654 | (5) | $ | 10,906,373 | ||||||||||||||||||
Chief Executive Officer |
2020 | $ | 311,538 | $ | 42,750 | (3) | — | — | $ | 92,250 | — | $ | 446,538 | |||||||||||||||||||
Kyle Beilman |
2021 | $ | 371,154 | — | (4) |
— | — | — | $ | 14,231 | (5) | $ | 385,385 | |||||||||||||||||||
Chief Financial Officer |
2020 | $ | 311,538 | $ | 21,375 | (3) | — | $ | 453,154 | $ | 46,125 | — | $ | 832,192 |
(1) | Stock awards and option awards are reported at aggregate grant date fair value in the year granted, as determined in accordance with the provisions of FASB ASC Topic 718. For the assumptions used in valuing these awards for purposes of computing this expense for 2021 and 2020, please see Note 14 of the Dave financial statements for the nine months ended September 30, 2021 and Note 1 of the Dave financial statements for the year ended December 31, 2020, respectively. |
(2) | Represents the annual performance cash bonus that, in each case, was earned by the named executive officers for the applicable year of service based on actual performance. Actual performance for the 2020 fiscal year was achieved at 61.5% of target performance. As of the date of this Annual Report on Form 10-K, the Board has not yet determined whether any bonuses will be awarded for the fiscal year ended December 31, 2021. |
(3) | Actual performance for the 2020 fiscal year was achieved at 61.5% of target performance. In consideration of the challenges posed by COVID-19 during the 2020 fiscal year, the Dave board of directors determined to adjust the annual performance payout for 2020 to 90% achievement of target performance. The amounts in this column represent the difference between the amount each named executive officer earned based on actual performance over the actual annual performance payout for 2020 assuming 90% achievement of target performance. |
(4) | As of the date of this Annual Report on Form 10-K, the Board has not yet determined whether any bonuses will be awarded for the fiscal year ended December 31, 2021. |
(5) | Represents Company matching contributions to the named executive officer’s contributions to the Company’s 401(k) plan. |
Metrics |
Target Performance |
Weighting |
Actual Achievement |
|||||||||
Non-GAAP Revenue (1) |
$ | 170,000,000 | 50 | % | 50.5 | % | ||||||
Non-GAAP Gross Margin(2) |
52.5 | % | 30 | % | 102.8 | % | ||||||
Banking TPV |
175,000,000 | 20 | % | 27.2 | % |
(1) | Non-GAAP revenue was calculated using GAAP service based revenue, adjusted for period-end revenue deferrals and processor costs associated with advance disbursements. |
(2) | Non-GAAP gross margin is non-GAAP gross profit divided by non-GAAP revenues. Non-GAAP gross profit was calculated using non-GAAP revenue, less processor costs associated with the disbursement and collection of advances and the provision for unrecoverable advances, calculated using actual unrecovered amounts for historical periods and assumed default amounts for periods where advance recoveries were still anticipated. |
Option awards (1) |
Stock awards (2) |
|||||||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Number of securities underlying unexercised options exercisable (#) |
Number of securities underlying unexercised options unexercisable (#) |
Option exercise price ($) (3) |
Option expiration date ($) |
Number of shares that have not vested (#) |
Market value of shares that have not vested ($) (4) |
|||||||||||||||||||||||||||||||||
Jason Wilk |
3/3/2021 | — | 11,456,061 | $ | .0.72 | 3/2/2031 | — | — | ||||||||||||||||||||||||||||||||
Kyle Beilman |
11/14/2018 | (5 |
) |
720,813 | 173,841 | $ | .04 | 11/13/2028 | ||||||||||||||||||||||||||||||||
3/3/2020 | (6 |
) |
533,290 | (7 |
) |
$ | 4,252,500 |
(1) | All stock options listed above cover shares of Class A Common Stock following the consummation of the Business Combination and were granted under the Legacy Dave Stock Plan. All stock options listed above are immediately exercisable upon the date of grant pursuant to an early exercise feature. |
(2) | All restricted shares listed above cover shares of Class A Common Stock following the Business Combination and were issued pursuant to the early exercise of stock options granted under the Legacy Dave Stock Plan. |
(3) | This column represents the fair market value of a share of Legacy Dave Common Stock on the date of grant, as determined by the Dave board of directors. |
(4) | This column represents the number of unvested restricted shares outstanding as of December 31, 2021, multiplied by $10.80, which is the per share value of Legacy Dave Common Stock as of December 31, 2021, divided by the exchange ratio of 1.354387513. |
(5) | The option grant is subject to a 4-year vesting schedule, with 25% of the shares vesting on July 15, 2019 and 1/48th of the shares vesting monthly thereafter, subject to the option holder’s continuous service through each vesting date. |
(6) | Represents the date the restricted stock was issued pursuant to early exercise of stock options. |
(7) | The restricted stock is subject to a 4-year vesting schedule, with 1/48th of the shares vesting on July 27, 2019 and monthly thereafter, subject to the option holder’s continuous service through each vesting date. The restricted stock was issued upon early exercise of a stock option granted on February 4, 2020. The restricted stock is also subject to acceleration in the event of a qualifying termination in connection with a change in control (as described below). |
Milestone Table | ||||
Tranche |
Stock Price Milestone |
Fraction of Total Shares Eligible to Vest | ||
1 | Stock Price of $7.26 or more | 1/3 rd | ||
2 | Stock Price of $10.89 or more | 1/12 th | ||
3 | Stock Price of $14.52 or more | 1/12 th | ||
4 | Stock Price of $18.15 or more | 1/12 th | ||
5 | Stock Price of $21.78 or more | 1/12 th | ||
6 | Stock Price of $25.41 or more | 1/12 th | ||
7 | Stock Price of $29.04 or more | 1/12 th | ||
8 | Stock Price of $32.67 or more | 1/12 th | ||
9 | Stock Price of $36.30 or more | 1/12 th |
• | each person who is known by the Company to be the beneficial owner of more than five percent (5%) of the outstanding shares of any class of the Company’s common stock; |
• | each named executive officer of the Company; |
• | all executive officers and directors of the Company as a group. |
Name and Address of Beneficial Owners |
Number of shares of Class A Common Stock |
% |
Number of shares of Class V Common Stock |
% |
% of Total Voting Power |
|||||||||||||||
Five Percent Holders |
||||||||||||||||||||
Norwest Venture Partners XIV, LP (1) |
18,645,614 | 5.8 | % | — | — | 2.3 | % | |||||||||||||
Paras Chitrakar |
31,802,210 | 9.8 | % | — | — | 3.9 | % | |||||||||||||
Section 32 Fund 1, LP (2) |
98,114,926 | 30.3 | % | — | — | 12.1 | % | |||||||||||||
Current Directors and Named Executive Officers |
||||||||||||||||||||
Jason Wilk |
— | — | 48,450,639 | 100 | % | 60.0 | % | |||||||||||||
Kyle Beilman (3) |
3,310,130 | 1.0 | % | — | — | * | ||||||||||||||
Brendan Carroll |
— | — | — | — | — | |||||||||||||||
Andrea Mitchell |
— | — | — | — | — | |||||||||||||||
Michael Pope |
— | — | — | — | — | |||||||||||||||
Dan Preston (4) |
772,000 | * | — | — | * | |||||||||||||||
All executive officers and directors of the Combined Company as a group (6 individuals) |
4,082,130 | 1.3 | % | 48,450,639 | 100 | % | 60.1 | % |
* | Less than one percent. |
(1) | The general partner of Norwest Venture Partners XIV, L.P. is Genesis VC Partners XIV, LLC. The managing member of Genesis VC Partners XIV, LLC is NVP Associates, LLC. Promod Haque, Jeffrey Crowe and Jon Kossow are co-chief executive officers of NVP Associates, LLC. Each of these individuals has shared voting and investment power over the shares held by Norwest Venture Partners XIV, L.P. The address of Norwest Venture Partners XI, L.P. is 525 University Avenue, Suite 800, Palo Alto, CA 94301-1922. |
(2) | The general partner of Section 32 Fund 1, LP is Section 32 GP 1, LLC. The general partner of Section 32 Fund 1, LP, may be deemed to have voting and dispositive power over the shares held by Section 32 Fund 1, LP. Investment decisions with respect to the shares held by Section 32 Fund 1, LP are made by the managing member of Section 32 GP 1, LLC, William J. Maris, and, therefore, Mr. Maris may be deemed to be the beneficial ownership of all shares held by Section 32 Fund 1, LP. The address for all entities and individuals affiliated with Section 32 Fund 1, LP is 171 Main St. #671, Los Altos, CA 94022. |
(3) | Consists of (a) 2,489,980 shares of Class A Common Stock and (b) 820,150 shares of Class A Common Stock issuable upon exercise of options within 60 days of the Closing Date. |
(4) | Consists of 772,000 shares of Class A Common Stock issuable upon exercise of options within 60 days of the Closing Date. |
• | we, VPCC or Legacy Dave have been or are to be a participant; |
• | the amounts involved exceeded or exceeds $120,000; and |
• | any of our directors, executive officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest. |
(1) | Financial Statements |
(2) | Financial Statement Schedules |
(3) | Exhibits |
Exhibit No. |
Description 6 | |
24.1 | Power of attorney (included on the signature page hereof). | |
31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 | |
32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | The schedules to this Exhibit have been omitted in accordance with Regulation S-K |
† | Indicates a management contract or compensatory plan, contract or arrangement. |
March 25, 2022 | |
DAVE INC. | ||||
|
|
By: | /s/ Jason Wilk | |||
|
|
|
Jason Wilk | |||
Title: Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Jason Wilk | Chief Executive Officer and Director ( Principal Executive Officer |
March 25, 2022 | ||
Jason Wilk | ||||
/s/ Kyle Beilman | Chief Financial Officer ( Principal Financial and Accounting Officer |
March 25, 2022 | ||
Kyle Beilman | ||||
/s/ Brendan Carroll | Director | March 25, 2022 | ||
Brendan Carroll | |
|||
/s/ Andrea Mitchell | Director | March 25, 2022 | ||
Andrea Mitchell | |
|||
/s/ Michael Pope | Director | March 25, 2022 | ||
Michael Pope | |
|||
/s/ Dan Preston | Director | March 25, 2022 | ||
Dan Preston |