Quarterly report pursuant to Section 13 or 15(d)

Restatement of Previously Issued Financial Statements

v3.22.2
Restatement of Previously Issued Financial Statements
 3 Months Ended
Mar. 31, 2022
Condensed Financial Information Disclosure [Abstract]  
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

Upon the closing of the MALKA Acquisition (as defined herein), the Company (i) issued $30.0 million in restricted shares (the “Closing Consideration Shares”) of MoneyLion Class A Common Stock at a price per share of $9.00 and (ii) paid to the sellers of MALKA approximately $10.0 million in cash in exchange for all of the issued and outstanding membership interests of MALKA. The Membership Interest Purchase Agreement governing the MALKA Acquisition includes a make-whole provision with respect to the Closing Consideration Shares issued pursuant to which the Company was and may be required to issue additional restricted shares of MoneyLion Class A Common Stock or pay additional cash, as determined by the Company in its sole discretion, on each of December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022 (the “Make-Whole Provision”). The Company originally classified the Closing Consideration Shares and the Make-Whole Provision as equity and recorded the fair value as stockholders’ equity on the consolidated balance sheet as of November 15, 2021, the closing date of the MALKA Acquisition (the “MALKA Acquisition Closing Date”). The Company’s management, in consultation with its advisors, has now determined that the Make-Whole Provision should not have been classified as equity and should have been classified as a liability within the scope of Accounting Standards Codification 480, Distinguishing Liabilities from Equity, as of the MALKA Acquisition Closing Date, with subsequent changes in the fair value of such liability recorded in the consolidated statement of operations under change in fair value of contingent consideration from mergers and acquisitions.

 

In addition, it was identified that the accrued dividend on the Series A Redeemable Convertible Preferred Stock, as defined in Note 3, “Summary of Significant Accounting Policies,” should have been classified as a liability as opposed to temporary equity. This reclassification was not considered material and is reflected in the adjustments below.

 

The impact of the restatement on the Company’s financial statements is reflected in the following tables:

 

Consolidated Balance Sheet as of March 31, 2022   As
Previously Reported		     Adjustment     As
Restated		  
Accounts payable and accrued liabilities   $ 43,933     $ 1,028     $ 44,961  
Other liabilities   $ 81,948     $ 9,933     $ 91,881  
Total liabilities   $ 371,146     $ 10,961     $ 382,107  
Redeemable convertible preferred stock (Series A)   $ 194,675     $ (1,028 )   $ 193,647  
Additional paid-in capital   $ 723,394     $ (1,346 )   $ 722,048  
Accumulated deficit   $ (470,304 )   $ (8,587 )   $ (478,891 )
Total stockholders’ equity   $ 243,414     $ (9,933 )   $ 233,481  

 

Consolidated Balance Sheet as of December 31, 2021   As
Previously Reported		     Adjustment     As
Restated		  
Other liabilities   $ 26,585     $ 11,550     $ 38,135  
Total liabilities   $ 258,304     $ 11,550     $ 269,854  
Additional paid-in capital   $ 708,175     $ (6,941 )   $ 701,234  
Accumulated deficit   $ (465,264 )   $ (4,609 )   $ (469,873 )
Total stockholders’ equity   $ 233,234     $ (11,550 )   $ 221,684  

 

Consolidated Statement of Operations for the Three Months Ended March 31, 2022   As
Previously
Reported		     Adjustment     As
Restated		  
    (amounts in thousands except share
and per share amounts)		  
Change in fair value of contingent consideration from mergers and acquisitions   $ (682 )   $ (3,978 )   $ (4,660 )
Net loss before income taxes   $ (34,417 )   $ (3,978 )   $ (38,395 )
Net loss   $ (6,000 )   $ (3,978 )   $ (9,978 )
Net loss attributable to common shareholders   $ (7,028 )   $ (3,978 )   $ (11,006 )
Net loss per share, basic and diluted   $ (0.03 )   $ (0.02 )   $ (0.05 )

 

Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2022   As
Previously
Reported		     Adjustment     As
Restated		  
Net loss   $ (6,000 )   $ (3,978 )   $ (9,978 )
Change in fair value of contingent consideration from mergers and acquisitions   $ 682     $ 3,978     $ 4,660