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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2024

 

OR

 

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

 

For the transition period from to

 

Commission File Number: 001-39346

 

MoneyLion Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

85-0849243

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

249 West 17th Street, 4th Floor

New York, New York

10011

(Address of principal executive offices)

(Zip Code)

 

(212) 300-9865

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

ML

The New York Stock Exchange

Redeemable warrants, each whole warrant exercisable for 1/30th of one share of Class A common stock

ML WS

The New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

There were 11,101,233 shares of the registrant’s Class A common stock, par value $0.0001 per share, outstanding as of October 31, 2024.

 


 

MoneyLion Inc.

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended September 30, 2024

 

Page

PART I – FINANCIAL INFORMATION

 

Item 1.

Financial Statements

1

Unaudited Consolidated Balance Sheets

1

Unaudited Consolidated Statements of Operations

2

Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

3

Unaudited Consolidated Statements of Cash Flows

5

Notes to Unaudited Consolidated Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

41

Item 4.

Controls and Procedures

42

PART II - OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

44

Item 1A.

Risk Factors

46

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

46

Item 3.

Defaults Upon Senior Securities

46

Item 4.

Mine Safety Disclosures

46

Item 5.

Other Information

46

Item 6.

Exhibits

47

Signatures

49

 

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:

 

 

factors relating to the business, operations and financial performance of MoneyLion, including market conditions and global and economic factors beyond MoneyLion’s control;

 

MoneyLion's ability to acquire, engage and retain customers and clients and sell or develop additional functionality, products and services to them on the MoneyLion platform;

 

MoneyLion’s reliance on third-party partners, service providers and vendors, including its ability to comply with applicable requirements of such third parties;

 

demand for and consumer confidence in MoneyLion’s products and services, including as a result of any adverse publicity concerning MoneyLion;

 

any inaccurate or fraudulent information provided to MoneyLion by customers or other third parties;

 

MoneyLion’s ability to realize strategic objectives and avoid difficulties and risks of any acquisitions, strategic investments, entries into new businesses, joint ventures, divestitures and other transactions;

 

MoneyLion’s success in attracting, retaining and motivating its senior management and other key personnel;

 

MoneyLion’s ability to renew or replace its existing funding arrangements and raise financing in the future, to comply with restrictive covenants related to its long-term indebtedness and to manage the effects of changes in the cost of capital;

 

MoneyLion's ability to achieve or maintain profitability in the future;

 

intense and increasing competition in the industries in which MoneyLion and its subsidiaries operate;

 

risks related to the proper functioning of MoneyLion’s information technology systems and data storage, including as a result of cyberattacks, data security breaches or other similar incidents or disruptions suffered by MoneyLion or third parties upon which it relies;

 

MoneyLion’s ability to protect its intellectual property and other proprietary rights and its ability to obtain or maintain intellectual property, proprietary rights and technology licensed from third parties;

 

iii


 

MoneyLion’s ability to comply with extensive and evolving laws and regulations applicable to its business and the outcome of any legal or governmental proceedings that may be instituted against MoneyLion;

 

MoneyLion's ability to establish and maintain an effective system of internal controls over financial reporting;

 

MoneyLion’s ability to maintain the listing of its Class A Common Stock and its publicly traded warrants to purchase Class A Common Stock (the “Public Warrants”) on the NYSE and any volatility in the market price of MoneyLion’s securities; and

 

other factors detailed under Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q.

 

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:

 

If we are unable to acquire new customers and clients, engage and retain our existing customers and clients or sell additional functionality, products and services to them on our platform, our business will be adversely affected.

 

Any failure to effectively match consumer leads from our Channel Partners with product offerings from our Product Partners or any reduced marketing spend by such Product Partners on our Enterprise platform could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

We depend on various third-party partners, service providers and vendors, and any adverse changes in our relationships with these third parties could materially and adversely affect our business, including if we fail to comply with applicable requirements of such third parties.

 

Adverse publicity concerning us, our business or our personnel or our failure to maintain our brand in a cost-effective manner could materially and adversely affect our business.

 

Demand for our products or services may decline if we do not continue to innovate or respond to evolving technology or other changes.

 

If the information provided to us by customers or other third parties is incorrect or fraudulent, we may misjudge a customer’s qualifications to receive our products and services and our results of operations may be harmed and could subject us to regulatory scrutiny or penalties.

 

Any acquisitions, strategic investments, entries into new businesses, joint ventures, divestitures and other transactions could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm its business and negatively impact our results of operations.

 

We depend on our senior management team and other key personnel, and if we fail to attract, retain and motivate our personnel, our business, financial condition and results of operations could be adversely affected.

 

If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. We may be unsuccessful in managing the effects of changes in the cost of capital on our business.

 

We have a history of losses and may not achieve or maintain profitability in the future.

 

Our risk management processes and procedures may not be effective.

 

We operate in highly competitive industries, and our inability to compete successfully would materially and adversely affect our business, financial condition, results of operations and cash flows.

 

Our business may be adversely affected by economic conditions and other factors, including adverse developments affecting financial institutions or the financial services industry generally, that we cannot control.

 

Cyberattacks, data security breaches or other similar incidents or disruptions suffered by us or third parties upon which we rely could have a material adverse effect on our business, harm our reputation and expose us to public scrutiny or liability.

 

v


 

Defects, failures or disruptions in our systems or those of third parties upon which we rely and resulting interruptions in the availability of our platform could harm our business and financial condition, harm our reputation, result in significant costs to us and expose us to substantial liability.

 

We may be unable to sufficiently obtain, maintain, protect or enforce our intellectual property and other proprietary rights, or we may be unable to obtain or maintain intellectual property, proprietary rights and technology licensed from third parties, which could reduce the value of our platform, products, services and brand, impair our competitive position and cause reputational harm.

 

We have in the past, and continue to be, subject to inquiries, subpoenas, exams, pending investigations, enforcement matters and litigation by state and federal regulators, the outcomes of which are uncertain and could cause reputational and financial harm to our business, financial condition, results of operations and cash flows.

 

Unfavorable outcomes in legal proceedings may harm our business, financial condition, results of operations and cash flows.

 

If we are unable to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

 

Our business is subject to extensive regulation, examination and oversight in a variety of areas, including registration and licensing requirements under federal, state and local laws and regulations. The legal and regulatory regimes governing certain of our products and services are uncertain and evolving.

 

If we fail to operate in compliance with state or local licensing requirements, it could adversely affect our business, financial condition, results of operations and cash flows.

 

The highly regulated environment in which our third-party financial institution partners operate may subject us to regulation and could have an adverse effect on our business, financial condition, results of operations and cash flows.

 

The collection, processing, use, storage, sharing and transmission of personally identifiable information (“PII”) and other sensitive data is subject to stringent and changing state and federal laws, regulations, standards and policies and could give rise to liabilities as a result of our failure or perceived failure to protect such data, comply with privacy and data protection laws and regulations or adhere to the privacy and data protection practices that we articulate to our customers.

 

The market price of our securities, including the Class A Common Stock, may be volatile. Our failure to meet the continued listing requirements of the NYSE could result in a delisting of our securities.

 

The risks described above should be read together with the “Cautionary Statement Regarding Forward-Looking Statements” herein, any 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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Cash

 

$

111,944

 

 

$

92,195

 

Restricted cash, including amounts held by variable interest entities (VIEs) of $1,217 and $128

 

 

4,415

 

 

 

2,284

 

Consumer receivables

 

 

218,642

 

 

 

208,167

 

Allowance for credit losses on consumer receivables

 

 

(33,511

)

 

 

(35,329

)

Consumer receivables, net, including amounts held by VIEs of $160,037 and $131,283

 

 

185,131

 

 

 

172,838

 

Consumer receivables held for sale

 

 

4,401

 

 

 

 

Enterprise receivables, net

 

 

24,279

 

 

 

15,978

 

Property and equipment, net

 

 

1,906

 

 

 

1,864

 

Intangible assets, net

 

 

165,380

 

 

 

176,541

 

Other assets

 

 

33,260

 

 

 

53,559

 

Total assets

 

$

530,716

 

 

$

515,259

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Secured loans, net

 

$

64,497

 

 

$

64,334

 

Accounts payable and accrued liabilities

 

 

53,529

 

 

 

52,396

 

Warrant liability

 

 

405

 

 

 

810

 

Other debt, net, including amounts held by VIEs of $106,588 and $125,419

 

 

106,588

 

 

 

125,419

 

Other liabilities

 

 

23,225

 

 

 

15,077

 

Total liabilities

 

 

248,244

 

 

 

258,036

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Class A Common Stock, $0.0001 par value; 66,666,666 shares authorized as of September 30, 2024 and December 31, 2023, 11,162,735 and 11,105,735 issued and outstanding, respectively, as of September 30, 2024 and 10,444,627 and 10,412,294 issued and outstanding, respectively, as of December 31, 2023

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

988,446

 

 

 

969,641

 

Accumulated deficit

 

 

(695,299

)

 

 

(702,719

)

Treasury stock at cost, 56,738 and 32,333 shares as of September 30, 2024 and December 31, 2023, respectively

 

 

(10,676

)

 

 

(9,700

)

Total stockholders' equity

 

 

282,472

 

 

 

257,223

 

Total liabilities and stockholders' equity

 

$

530,716

 

 

$

515,259

 

 

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)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Service and subscription revenue

$

132,098

 

 

$

107,000

 

 

$

378,061

 

 

$

300,978

 

Net interest income on loan receivables

 

3,368

 

 

 

3,258

 

 

 

9,257

 

 

 

9,490

 

Total revenue, net

 

135,466

 

 

 

110,258

 

 

 

387,318

 

 

 

310,468

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses on consumer receivables

 

26,833

 

 

 

25,121

 

 

 

80,494

 

 

 

67,194

 

Loss on sale of consumer receivables

 

3,510

 

 

 

 

 

 

3,510

 

 

 

 

Compensation and benefits

 

25,820

 

 

 

23,511

 

 

 

75,458

 

 

 

70,491

 

Marketing

 

10,591

 

 

 

7,029

 

 

 

31,987

 

 

 

19,970

 

Direct costs

 

38,349

 

 

 

32,813

 

 

 

104,187

 

 

 

94,845

 

Professional services

 

10,820

 

 

 

4,968

 

 

 

27,593

 

 

 

14,485

 

Technology-related costs

 

7,323

 

 

 

5,891

 

 

 

20,421

 

 

 

17,540

 

Other operating expenses

 

8,217

 

 

 

9,824

 

 

 

22,875

 

 

 

30,038

 

Total operating expenses

 

131,463

 

 

 

109,157

 

 

 

366,525

 

 

 

314,563

 

Net income (loss) before other (expense) income and income taxes

 

4,003

 

 

 

1,101

 

 

 

20,793

 

 

 

(4,095

)

Interest expense

 

(6,504

)

 

 

(7,088

)

 

 

(20,035

)

 

 

(21,929

)

Change in fair value of warrant liability

 

405

 

 

 

(81

)

 

 

405

 

 

 

(68

)

Change in fair value of contingent consideration from mergers and acquisitions

 

 

 

 

 

 

 

 

 

 

6,613

 

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

(26,721

)

Other income

 

2,613

 

 

 

2,358

 

 

 

7,353

 

 

 

5,264

 

Net income (loss) before income taxes

 

517

 

 

 

(3,710

)

 

 

8,516

 

 

 

(40,936

)

Income tax expense

 

3,309

 

 

 

400

 

 

 

1,096

 

 

 

114

 

Net (loss) income

 

(2,792

)

 

 

(4,110

)

 

 

7,420

 

 

 

(41,050

)

Reversal of previously accrued dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

690

 

Net (loss) income attributable to common shareholders

$

(2,792

)

 

$

(4,110

)

 

$

7,420

 

 

$

(40,360

)

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share, basic

$

(0.25

)

 

$

(0.40

)

 

$

0.69

 

 

$

(4.30

)

Net (loss) income per share, diluted

$

(0.25

)

 

$

(0.40

)

 

$

0.62

 

 

$

(4.30

)

Weighted average shares used in computing net (loss) income per share, basic

 

11,089,933

 

 

 

10,221,956

 

 

 

10,827,363

 

 

 

9,375,221

 

Weighted average shares used in computing net (loss) income per share, diluted

 

11,089,933

 

 

 

10,221,956

 

 

 

11,974,447

 

 

 

9,375,221

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Class A Common Stock

 

 

Additional

 

 

Accumulated

 

 

Treasury

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Stock

 

 

Equity

 

Balances at July 1, 2024

 

 

10,945,658

 

 

$

1

 

 

$

980,662

 

 

$

(692,507

)

 

$

(9,700

)

 

$

278,456

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,282

 

 

 

 

 

 

 

 

 

7,282

 

Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings

 

 

184,744

 

 

 

 

 

 

358

 

 

 

 

 

 

 

 

 

358

 

Repurchases of Class A Common Stock

 

 

(24,405

)

 

 

 

 

 

 

 

 

 

 

 

(976

)

 

 

(976

)

Other

 

 

 

 

 

 

 

 

144

 

 

 

 

 

 

 

 

 

144

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,792

)

 

 

 

 

 

(2,792

)

Balances at September 30, 2024

 

 

11,105,997

 

 

$

1

 

 

$

988,446

 

 

$

(695,299

)

 

$

(10,676

)

 

$

282,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Class A Common Stock

 

 

Additional

 

 

Accumulated

 

 

Treasury

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Stock

 

 

Equity

 

Balances at January 1, 2024

 

 

10,412,294

 

 

$

1

 

 

$

969,641

 

 

$

(702,719

)

 

$

(9,700

)

 

$

257,223

 

Stock-based compensation

 

 

 

 

 

 

 

 

21,310

 

 

 

 

 

 

 

 

 

21,310

 

Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings

 

 

718,108

 

 

 

 

 

 

(2,649

)

 

 

 

 

 

 

 

 

(2,649

)

Repurchases of Class A Common Stock

 

 

(24,405

)

 

 

 

 

 

 

 

 

 

 

 

(976

)

 

 

(976

)

Other

 

 

 

 

 

 

 

 

144

 

 

 

 

 

 

 

 

 

144

 

Net income

 

 

 

 

 

 

 

 

 

 

 

7,420

 

 

 

 

 

 

7,420

 

Balances at September 30, 2024

 

 

11,105,997

 

 

$

1

 

 

$

988,446

 

 

$

(695,299

)

 

$

(10,676

)

 

$

282,472

 

 

3


 

MONEYLION INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(amounts in thousands, except share amounts)

(Unaudited)

 

 

Redeemable Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

Preferred Stock (Series A)

 

 

 

Class A Common Stock

 

 

Additional

 

 

Accumulated

 

 

Treasury

 

 

Stockholders'

 

 

Shares

 

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Paid-in Capital

 

 

Deficit

 

 

Stock

 

 

Equity

 

Balances at July 1, 2023

 

 

 

 

$

 

 

 

 

10,135,675

 

 

$

1

 

 

$

957,778

 

 

$

(694,414

)

 

$

(9,700

)

 

$

253,665

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,702

 

 

 

 

 

 

 

 

 

5,702

 

Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings

 

 

 

 

 

 

 

 

 

146,227

 

 

 

 

 

 

723

 

 

 

 

 

 

 

 

 

723

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,110

)

 

 

 

 

 

(4,110

)

Balances at September 30, 2023

 

 

 

 

$

 

 

 

 

10,281,902

 

 

$

1

 

 

$

964,203

 

 

$

(698,524

)

 

$

(9,700

)

 

$

255,980

 

 

 

Redeemable Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

Preferred Stock (Series A)

 

 

 

Class A Common Stock

 

 

Additional

 

 

Accumulated

 

 

Treasury

 

 

Stockholders'

 

 

Shares

 

 

 

Amount

 

 

 

Shares (1)

 

 

Amount (1)

 

 

Paid-in Capital(1)

 

 

Deficit

 

 

Stock

 

 

Equity

 

Balances at January 1, 2023

 

25,655,579

 

 

 

$

173,208

 

 

 

 

8,587,345

 

 

$

1

 

 

$

766,839

 

 

$

(657,979

)

 

$

(9,700

)

 

$

99,161

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,657

 

 

 

 

 

 

 

 

 

16,657

 

Exercise of stock options and warrants and vesting of RSUs and PSUs, net of tax withholdings

 

 

 

 

 

 

 

 

 

319,152

 

 

 

 

 

 

(59

)

 

 

 

 

 

 

 

 

(59

)

Issuance of common stock in connection with earnout and make-whole provisions related to the acquisition of Malka Media Group LLC

 

 

 

 

 

 

 

 

 

110,925

 

 

 

 

 

 

1,914

 

 

 

 

 

 

 

 

 

1,914

 

Issuance of equity in connection with Engine Acquisition and the related contingent consideration, net of working capital adjustments

 

4,400,172

 

 

 

 

1,560

 

 

 

 

23,453

 

 

 

 

 

 

304

 

 

 

 

 

 

 

 

 

304

 

Voluntary conversion of preferred stock to common stock

 

(6,698

)

 

 

 

(45

)

 

 

 

230

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

45

 

Reversal of previously accrued dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

690

 

 

 

 

 

 

 

 

 

690

 

Settlement of accrued dividends on preferred stock

 

 

 

 

 

 

 

 

 

229,605

 

 

 

 

 

 

2,976

 

 

 

 

 

 

 

 

 

2,976

 

Automatic conversion of redeemable convertible preferred stock (Series A)

 

(30,049,053

)

 

 

 

(174,723

)

 

 

 

1,012,093

 

 

 

 

 

 

174,849

 

 

 

 

 

 

 

 

 

174,849

 

Other

 

 

 

 

 

 

 

 

 

(901

)

 

 

 

 

 

(12

)

 

 

505

 

 

 

 

 

 

493

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,050

)

 

 

 

 

 

(41,050

)

Balances at September 30, 2023

 

 

 

 

$

 

 

 

 

10,281,902

 

 

$

1

 

 

$

964,203

 

 

$

(698,524

)

 

$

(9,700

)

 

$

255,980

 

 

(1)
Prior period results have been adjusted to reflect the Reverse Stock Split of the Class A Common Stock at a ratio of 1-for-30 that became effective April 24, 2023. See Note 1, “Description of Business and Basis of Presentation,” for details.

 

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

 

4


 

MONEYLION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(2,792

)

 

$

(4,110

)

 

$

7,420

 

 

$

(41,050

)

Adjustments to reconcile net (loss) income to net cash from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Provision for losses on receivables

 

26,833

 

 

 

25,121

 

 

 

80,494

 

 

 

67,194

 

Loss on sale of consumer receivables

 

3,271

 

 

 

 

 

 

3,271

 

 

 

 

Depreciation and amortization expense

 

6,509

 

 

 

6,106

 

 

 

19,052

 

 

 

18,403

 

Change in deferred fees and costs, net

 

314

 

 

 

380

 

 

 

992

 

 

 

1,778

 

Change in fair value of warrants

 

(405

)

 

 

81

 

 

 

(405

)

 

 

68

 

Change in fair value of contingent consideration from mergers and acquisitions

 

 

 

 

 

 

 

 

 

 

(6,613

)

Loss (gain) on foreign currency translation

 

497

 

 

 

 

 

 

444

 

 

 

(178

)

Goodwill impairment loss

 

 

 

 

 

 

 

 

 

 

26,721

 

Stock compensation expense

 

7,282

 

 

 

5,702

 

 

 

21,310

 

 

 

16,657

 

Deferred income taxes

 

(131

)

 

 

(17

)

 

 

340

 

 

 

(510

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued interest receivable

 

(112

)

 

 

(166

)

 

 

(188

)

 

 

(404

)

Enterprise receivables, net

 

(1,234

)

 

 

2,144

 

 

 

(8,301

)

 

 

(278

)

Other assets

 

15,985

 

 

 

(733

)

 

 

17,738

 

 

 

3,627

 

Accounts payable and accrued liabilities

 

4,048

 

 

 

2,771

 

 

 

689

 

 

 

(5,878

)

Other liabilities

 

277

 

 

 

(1,207

)

 

 

(1,077

)

 

 

(5,422

)

Net cash provided by operating activities

 

60,342

 

 

 

36,072

 

 

 

141,779

 

 

 

74,115

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Net originations and collections of finance receivables

 

(11,745

)

 

 

(26,448

)

 

 

(81,143

)

 

 

(79,280

)

Originations of finance receivables held for sale

 

(46,681

)

 

 

 

 

 

(46,681

)

 

 

 

Proceeds from the sale of consumer receivables

 

39,009

 

 

 

 

 

 

39,009

 

 

 

 

Purchase of property and equipment and software development

 

(3,388

)

 

 

(1,527

)

 

 

(7,789

)

 

 

(4,202

)

Settlement of contingent consideration related to mergers and acquisitions

 

 

 

 

 

 

 

 

 

 

(1,116

)

Net cash used in investing activities

 

(22,805

)

 

 

(27,975

)

 

 

(96,604

)

 

 

(84,598

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Net repayments to special purpose vehicle credit facilities

 

(23,600

)

 

 

 

 

 

(19,600

)

 

 

(24,000

)

Repayments to secured/senior lenders

 

 

 

 

(10,000

)

 

 

 

 

 

(15,000

)

Repurchases of Class A Common Stock

 

(976

)

 

 

 

 

 

(976

)

 

 

 

Payment of deferred financing costs

 

(70

)

 

 

 

 

 

(70

)

 

 

(132

)

Payments related to the automatic conversion of redeemable convertible preferred stock (Series A) in lieu of fractional shares of common stock and dividends on preferred stock

 

 

 

 

 

 

 

 

 

 

(3,007

)

Proceeds (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

 

358

 

 

 

723

 

 

 

(2,649

)

 

 

(59

)

Other

 

 

 

 

22

 

 

 

 

 

 

(12

)

Net cash used in financing activities

 

(24,288

)

 

 

(9,255

)

 

 

(23,295

)

 

 

(42,210

)

Net change in cash and restricted cash

 

13,249

 

 

 

(1,158

)

 

 

21,880

 

 

 

(52,693

)

Cash and restricted cash, beginning of period

 

103,110

 

 

 

102,174

 

 

 

94,479

 

 

 

153,709

 

Cash and restricted cash, end of period

$

116,359

 

 

$

101,016

 

 

$

116,359

 

 

$

101,016

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

$

6,310

 

 

$

6,738

 

 

$

19,158

 

 

$

21,246

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

Voluntary conversion of preferred stock to common stock

$

 

 

$

 

 

$

 

 

$

45

 

Automatic conversion of redeemable convertible preferred stock (Series A) to common stock

$

 

 

$

 

 

$

 

 

$

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