Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 01, 2024 | Jun. 30, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38633 | ||
Entity Registrant Name | BM Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-3410369 | ||
Entity Address, Address Line One | 201 King of Prussia Road | ||
Entity Address, Address Line Two | Suite 650 | ||
Entity Address, City or Town | Wayne | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19087 | ||
City Area Code | 877 | ||
Local Phone Number | 327-9515 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 25 | ||
Entity Common Stock, Shares Outstanding | 12,063,773 | ||
Documents Incorporated by Reference | Specified portions of the registrant’s definitive proxy statement relating to the registrant’s 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”), which is to be filed within 120 days after December 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001725872 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | BMTX | ||
Security Exchange Name | NYSEAMER | ||
Warrant | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share. | ||
Trading Symbol | BMTX-WT | ||
Security Exchange Name | NYSEAMER |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | KPMG, LLP |
Auditor Location | Philadelphia, PA |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 14,288 | $ 21,108 |
Accounts receivable, net allowance for doubtful accounts of $1,100 and $305 | 9,128 | 8,260 |
Prepaid expenses and other assets | 5,148 | 9,076 |
Total current assets | 28,564 | 38,444 |
Premises and equipment, net | 535 | 508 |
Developed software, net | 16,173 | 22,324 |
Goodwill | 5,259 | 5,259 |
Other intangibles, net | 4,109 | 4,429 |
Other assets | 0 | 72 |
Total assets | 54,640 | 71,036 |
Liabilities: | ||
Accounts payable and accrued liabilities | 10,577 | 12,684 |
Deferred revenue, current | 12,322 | 6,647 |
Total current liabilities | 22,899 | 19,331 |
Non-current liabilities: | ||
Deferred revenue, non-current | 127 | 0 |
Liability for private warrants | 162 | 2,847 |
Other non-current liabilities | 480 | 0 |
Total liabilities | 23,668 | 22,178 |
Commitments and contingencies (Note 7) | ||
Shareholders’ equity: | ||
Preferred stock: Par value $0.0001 per share; 10,000,000 shares authorized, zero shares issued or outstanding | 0 | 0 |
Common stock: Par value $0.0001 per share; 1 billion shares authorized; 11,984,133 and 12,240,237 shares issued and outstanding | 1 | 1 |
Additional paid-in capital | 71,787 | 72,342 |
Accumulated deficit | (40,816) | (23,485) |
Total shareholders’ equity | 30,972 | 48,858 |
Total liabilities and shareholders’ equity | $ 54,640 | $ 71,036 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowance for doubtful accounts | $ 1,100 | $ 305 | $ 79 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued (in shares) | 11,984,133 | 12,240,237 | |
Common stock, shares outstanding (in shares) | 11,984,133 | 12,240,237 |
CONSOLIDATED STATEMENTS OF LOSS
CONSOLIDATED STATEMENTS OF LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating revenues: | ||
Total operating revenues | $ 55,252 | $ 83,597 |
Operating expenses: | ||
Technology, communication, and processing | 27,775 | 29,176 |
Salaries and employee benefits | 22,489 | 39,926 |
Professional services | 11,257 | 10,747 |
Provision for operating losses | 8,311 | 6,798 |
Occupancy | 35 | 1,022 |
Customer related supplies | 911 | 894 |
Advertising and promotion | 479 | 741 |
Restructuring, merger, and acquisition related expenses | 937 | 290 |
Other expense | 3,038 | 3,259 |
Total operating expenses | 75,232 | 92,853 |
Loss from operations | (19,980) | (9,256) |
Non-operating income and expense: | ||
Gain on fair value of private warrant liability | 2,665 | 8,066 |
Loss before income tax expense (benefit) | (17,315) | (1,190) |
Income tax expense (benefit) | 16 | (411) |
Net loss | $ (17,331) | $ (779) |
Weighted average number of shares outstanding - basic (in shares) | 11,574 | 11,942 |
Weighted average number of shares outstanding - diluted (in shares) | 11,574 | 11,942 |
Basic loss per common share (in dollars per share) | $ (1.50) | $ (0.07) |
Diluted loss per common share (in dollars per share) | $ (1.50) | $ (0.07) |
Interchange and card revenue | ||
Operating revenues: | ||
Total operating revenues | $ 9,447 | $ 22,318 |
Servicing fees | ||
Operating revenues: | ||
Total operating revenues | 31,460 | 44,581 |
Account fees | ||
Operating revenues: | ||
Total operating revenues | 8,099 | 8,992 |
University fees | ||
Operating revenues: | ||
Total operating revenues | 5,701 | 5,734 |
Other revenue | ||
Operating revenues: | ||
Total operating revenues | $ 545 | $ 1,972 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 12,193,378 | |||
Balance, beginning of period at Dec. 31, 2021 | $ 37,981 | $ 1 | $ 60,686 | $ (22,706) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (779) | (779) | ||
Conversion of private warrants to public warrants | 724 | 724 | ||
Issuance of common stock as compensation (in shares) | 6,000 | |||
Issuance of common stock as compensation | 37 | 37 | ||
Tax paid on behalf of employees related to net settlement of share-based awards (in shares) | (141,405) | |||
Tax paid on behalf of employees related to net settlement of share-based awards | (425) | (425) | ||
Issuance of common stock upon exercise of warrants (in shares) | 100 | |||
Issuance of common stock upon exercise of warrants | 1 | 1 | ||
Share-based compensation expense (in shares) | 182,164 | |||
Share-based compensation expense | $ 11,319 | 11,319 | ||
Balance, end of period (in shares) at Dec. 31, 2022 | 12,240,237 | 12,240,237 | ||
Balance, end of period at Dec. 31, 2022 | $ 48,858 | $ 1 | 72,342 | (23,485) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (17,331) | (17,331) | ||
Conversion of private warrants to public warrants | 20 | 20 | ||
Tax paid on behalf of employees related to net settlement of share-based awards (in shares) | (543,574) | |||
Tax paid on behalf of employees related to net settlement of share-based awards | (2,474) | (2,474) | ||
Share-based compensation expense (in shares) | 287,470 | |||
Share-based compensation expense | $ 1,899 | 1,899 | ||
Balance, end of period (in shares) at Dec. 31, 2023 | 11,984,133 | 11,984,133 | ||
Balance, end of period at Dec. 31, 2023 | $ 30,972 | $ 1 | $ 71,787 | $ (40,816) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (17,331) | $ (779) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation of premises and equipment | 265 | 298 |
Loss on disposal of premises and equipment | 0 | 38 |
Amortization of developed software | 11,591 | 11,445 |
Amortization of other intangible assets | 320 | 320 |
Amortization of leased assets | 0 | 326 |
Provision for bad debt | 795 | 226 |
Impairment of developed software | 620 | 0 |
Share-based compensation expense | 1,899 | 11,356 |
Gain on fair value of private warrant liability | (2,665) | (8,066) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,663) | 708 |
Prepaid expenses and other current assets | 3,928 | (6,976) |
Other assets | 72 | 0 |
Accounts payable and accrued liabilities | (2,106) | 5,737 |
Taxes payable | 0 | (1,807) |
Operating lease liabilities | 0 | (416) |
Deferred revenue | 5,802 | (8,930) |
Net Cash provided by Operating Activities | 1,527 | 3,480 |
Cash Flows Used in Investing Activities: | ||
Development of internal use software | (5,581) | (5,176) |
Purchases of premises and equipment | (292) | (499) |
Net Cash used in Investing Activities | (5,873) | (5,675) |
Cash Flows Used in Financing Activities: | ||
Proceeds from exercise of warrants | 0 | 1 |
Repurchase of private warrants | 0 | (1,977) |
Payments related to net settlement of share-based compensation awards | (2,474) | (425) |
Net Cash used in Financing Activities | (2,474) | (2,401) |
Net Decrease in Cash and Cash Equivalents | (6,820) | (4,596) |
Cash and Cash Equivalents – Beginning | 21,108 | 25,704 |
Cash and Cash Equivalents – Ending | 14,288 | 21,108 |
Supplementary Cash Flow Information: | ||
Income taxes (refunded) paid, net | (4,395) | 8,123 |
Noncash Operating, Investing, and Financing Activities: | ||
Conversion of private warrants to public warrants | 20 | 0 |
Contingent liability for acquired software | $ 480 | $ 0 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Business Description And Reverse Recapitalization [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS BM Technologies, Inc. (“BMTX” or the “Company”) (formerly known as BankMobile) provides state-of-the-art high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels. BankMobile Technologies, Inc. (“BankMobile”) was incorporated in May 2016 as a wholly-owned subsidiary of Customers Bank. On August 6, 2020, the Company entered into an Agreement and Plan of Merger, by and among Megalith Financial Acquisition Corporation, a special purpose acquisition company (“Megalith”), incorporated in Delaware in November 2017, MFAC Merger Sub Inc., a wholly-owned subsidiary of Megalith, BankMobile Technologies, Inc., and Customers Bank, the sole stockholder of BankMobile. On January 4, 2021, BankMobile became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc. BMTX’s fintech business model leverages Banking-as-a-Service (“BaaS”) partners’ and University partners’ existing customer bases to achieve high volume, low-cost customer acquisition in its Higher Education and BaaS businesses. BMTX has four primary revenue sources: interchange and card revenue, servicing fees, account fees, and university fees. The majority of revenues are driven by customer activity (deposits, spend, transactions, etc.) and may be paid or passed through by our Partner Banks, universities, or paid directly by customers. BMTX facilitates deposits and banking services between a customer and our partner banks, Customers Bank and First Carolina Bank, (the “Partner Banks”), which are related parties and are Federal Deposit Insurance Corporation (“FDIC”) insured banks. The Partner Banks hold the FDIC insured deposits that BMTX sources and services and are the issuing banks on BMTX’s debit cards. The Partner Banks pay the Company a servicing fee for the deposits generated and pass through interchange income earned from transactions on debit cards and transaction-based account fees. BMTX is not a bank, does not hold a bank charter, and does not provide banking services, and as a result, is not subject to direct banking regulation, except as a service provider to our Partner Banks. BMTX is also subject to the regulations of the U.S. Department of Education (“ED”) due to our student disbursements business, and is periodically examined by it. BMTX’s contracts with most of its Higher Education institution clients require it to comply with numerous laws and regulations, including, where applicable, regulations promulgated by the ED regarding the handling of student financial aid funds received by institutions on behalf of their students under Title IV of the Higher Education Act of 1965; the Family Educational Rights and Privacy Act of 1995; the Electronic Fund Transfer Act and Regulation E; the USA PATRIOT Act and related anti-money laundering requirements; and certain federal rules regarding safeguarding personal information, including rules implementing the privacy provisions of the Gramm-Leach-Bliley Act. Other products and services offered by BMTX may also be subject to other federal and state laws and regulations. BMTX’s Higher Education serviced deposits fluctuate throughout the year due primarily to the inflow of funds typically disbursed at the start of a semester. Serviced deposit balances typically experience seasonal lows in December and July and experience seasonal highs in September and January when individual account balances are generally at their peak. Debit spend follows a similar seasonal trend, but may slightly lag increases in balances. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements have been prepared in conformity with U.S. GAAP. Any reference to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). FASB ASC Topic 205-40, P resentation of Financial Statements - Going Concern , requires Management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date. Management has performed this required assessment as of April 5, 2024, and believes there are sufficient funds available to support its ongoing business operations and continue as a going concern for at least the next 12 months with projected liquidity of $10.0 million at April 5, 2025. Management’s assessment is subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control including the impact of the macroeconomic environment, and that are difficult to predict as to timing, extent, likelihood, and degree of occurrence, and that could cause actual results to differ from estimates and forecasts, potentially materially. Based upon the results of Management’s assessment, these consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements do not include any adjustments that could result from the outcome of the aforementioned risks and uncertainties. Consolidation Policy These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates These financial statements reflect all normal and recurring adjustments that are, in the opinion of Management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMTX for the periods presented. The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include share-based compensation, provision for operating losses, valuation of deferred tax assets, valuation of the private warrants, internally developed software, and goodwill and other intangible asset impairment analysis. Actual results could differ from those estimates. Segment Reporting The Company conducts its operations through a single operating segment and, therefore, one reportable segment. Operating segments are revenue-generating components of a company for which separate financial information is internally produced for regular use by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess the performance of the business. Our CODM, Luvleen Sidhu, our Chief Executive Officer (“CEO”), uses a variety of measures to assess the performance of the business; however, detailed profitability information of the nature that could be used to allocate resources and assess the performance of the business are managed and reviewed for the Company as a whole. Customer and Vendor Concentrations At December 31, 2023 and December 31, 2022, Customers Bank accounted for 16% and 17% of our total Accounts receivable, net , respectively. At December 31, 2023 and December 31, 2022, a BaaS partner accounted for 48% and 60% of our total Accounts receivable, net, respectively. At December 31, 2023 and December 31, 2022, MasterCard accounted for 21% and 10% of our total Accounts receivable, net , respectively. For the twelve months ended December 31, 2023 and 2022, Customers Bank, through a Deposit Processing Services Agreement and Amendment thereof, accounted for 87% and 89% of our Total operating revenues , respectively. See Note 13 – Related Party Transactions for additional information. Certain of these revenues are paid directly by MasterCard or individual account holders to the Company. For the twelve months ended December 31, 2023 and 2022, there is one vendor that accounted for 11% and 12% of our Total operating expenses , respectively. Significant Accounting Policies As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised ASUs applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act. Business Combinations Business combinations are accounted for by applying the acquisition method in accordance with FASB ASC Topic 805, Business Combinations . Under the acquisition method, identifiable assets acquired and liabilities assumed are measured at their fair values as of the date of acquisition, and are recognized separately from goodwill. Results of operations of the acquired entity are included in the statement of income from the date of acquisition. BMTX recognizes goodwill when the acquisition price exceeds the estimated fair value of the net assets acquired. Cash and Cash Equivalents Our cash is maintained at Customers Bank, with a large majority of our cash balances at December 31, 2023 exceeding the FDIC’s $250,000 insured limit per account. We have not experienced losses on cash balances exceeding the federally insured limits, but there can be no assurance that we will not experience such losses in the future. Accounts Receivable Accounts receivable primarily relate to billings for deposit processing services provided to our Partner Banks in addition to reimbursements to be received from a BaaS partner, as described in collaborative arrangements below, MasterCard incentive income, and uncollected university subscription and disbursement services fees. These amounts are recorded at face amounts less an allowance for doubtful accounts. Management evaluates accounts receivable and establishes the allowance for doubtful accounts based on historical experience, analysis of past due accounts, and other current available information. Accounts receivable deemed to be uncollectible are individually identified and are charged-off against the allowance for doubtful accounts. Premises and Equipment Premises and equipment are recorded at cost less accumulated depreciation. Depreciation is charged to operations on a straight-line basis over the estimated useful lives of the assets or, in the case of leasehold improvements, the lease period, if shorter. Upon disposal or retirement of property and equipment, cost and related accumulated depreciation are removed from the accounts. Gains and losses from dispositions are credited or charged to operations. Expenditures for ordinary maintenance and repairs are charged to expense. Additions or betterments to property and equipment are capitalized at cost. The respective expenses are recorded in Technology, communication, and processing and Occupancy on the Consolidated Statements of Loss for the twelve months ended December 31, 2023 and 2022, respectively. Developed Software Developed software includes internally developed software and developed software acquired in the Higher One Disbursement business acquisition. Internally developed software and related capitalized work-in-process costs relate to the development of our fintech digital banking platform. BMTX capitalizes certain internal and external costs incurred to develop internal-use software during the application development stage. BMTX also capitalizes the cost of specified upgrades and enhancements to internal-use software that result in additional functionality. Once a development project is substantially complete and the software is ready for its intended use, BMTX begins amortizing these costs on a straight-line basis over the internal-use software’s estimated useful life, which ranges from three Technology, communication, and processing on the Consolidated Statements of Loss. The Higher One Disbursement business developed software is related to the disbursement business services to colleges and universities and delivering services to students. The Higher One Disbursement business developed software was recorded at the amount determined by a third-party valuation expert at acquisition date and was estimated based on expected revenue attributable to the software utilizing a discounted cash flow methodology, giving consideration to potential obsolescence. The estimated useful life of the Higher One Disbursement business developed software is 10 years. Amortization expense is recorded in Technology, communication, and processing on the Consolidated Statements of Loss. At each reporting period, the Company performs an assessment to determine if any indicators of impairment are present. If indicators are present, the Company performs a recoverability test by measuring the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the Company determines that the carrying amount is impaired, the asset is written down to fair value. Fair value is determined based on discounted cash flows or Management’s estimates, depending on the nature of the assets. Developed software impairment expense for the twelve months ended December 31, 2023 and 2022 totaled $0.6 million and zero, respectively. Impairment expense is recorded in Technology, communication, and processing on the Consolidated Statements of Loss. Goodwill and Other Intangibles Goodwill represents the excess of the purchase price over the identifiable net assets of businesses acquired through business combinations accounted for under the acquisition method. Goodwill is reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. A goodwill impairment charge represents the amount by which the reporting unit’s carrying amount exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. BMTX applies a qualitative assessment to determine if the Step 1 quantitative impairment test is necessary. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as university relationships, are subject to impairment testing. Intangible assets are amortized on a straight-line basis over twenty years. Other intangibles subject to amortization are reviewed for impairment under FASB ASC Topic 360, Property, Plant and Equipment , which requires that a long-lived asset or asset group be tested for recoverability whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the Company determines that the carrying amount is impaired, the asset is written down to fair value. Fair value is determined based on discounted cash flows or Management’s estimates, depending on the nature of the assets. As part of its quantitative and qualitative assessment, BMTX reviews regional and national trends in current and expected economic conditions. BMTX also considers its own historical performance, expectations of future performance, indicative deal values, and other trends specific to its industry. Based on its quantitative and qualitative assessment, BMTX determined that there was no evidence of impairment of the balance of goodwill or other intangible assets. As of December 31, 2023 and 2022, Goodwill was $5.3 million and Other intangibles, net was $4.1 million and $4.4 million, respectively. Leases BMTX enters into lease agreements primarily for the use of office space, all which are classified as operating leases. At lease commencement date, BMTX recognizes right-of-use (“ROU”) assets and lease liabilities measured at the present value of lease payments over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease expense for rental payments are recognized on a straight-line basis over the lease term and are included in Occupancy. In addition to rent, BMTX pays taxes and maintenance expenses, including an annual increase in operating expenses over the initial year’s expenses under certain leases as variable lease payments. For the twelve months ended December 31, 2023, the Company had one month to month short term office lease that qualified for the short-term lease exemption under FASB ASC Topic 842, Leases . and as such, did not require capitalization as a right of use asset or lease liability. Insurance Premium Finance Obligations The Company includes the obligation for its insurance premium financing in Accounts Payable and accrued liabilities on the Consolidated Balance Sheets . There were zero premium finance obligations outstanding at both December 31, 2023 and 2022. Deferred Revenue Deferred revenue consists of payments received from customers, most significantly from its Partner Banks, prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied. The Company classifies deferred revenue on the Consolidated Balance Sheets in Deferred revenue, current and Deferred revenue, non-current. Public & Private Warrants The Company has public and private warrants outstanding as a result of the merger transaction with Megalith that occurred on January 4, 2021. Each warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 a share. The warrants expire January 4, 2026, or earlier upon redemption or liquidation and the Company has redemption rights if our common stock trades above $24.00 for 20 out of 30 days. The private warrants are identical to the public warrants except that the private warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor and certain others. The private warrants and the public warrants are treated differently for accounting purposes. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the private warrants are accounted for as liabilities and are marked-to-market each reporting period with the change recognized in earnings. In general, under the mark-to-market accounting model, as the Company’s stock price increases, the warrant liability increases, and the Company recognizes additional expense in its Consolidated Statements of Loss – the opposite when the stock price declines. Accordingly, the periodic revaluation of the private warrants could result in significant volatility in reported earnings. For the twelve months ended December 31, 2023 and 2022, respectively, the Company recognized non-cash gains of $2.7 million and $8.1 million related to the mark-to-market accounting on its private warrants. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the public warrants are treated as equity instruments. Accordingly, the public warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Any future exercises of the public warrants will be recorded as cash received and recorded in Cash and cash equivalents , with a corresponding offset to Additional paid-in capital in equity. Income Taxes BMTX accounts for income taxes under the liability method of accounting for income taxes. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. BMTX determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. In assessing the realizability of federal or state deferred tax assets, Management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and prudent, feasible, and permissible as well as available tax planning strategies in making this assessment. A tax position is recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the term upon examination includes resolution of the related appeals or litigation process. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to Management’s judgment. Loss Contingencies In the ordinary course of business, the Company is regularly subject to various claims, suits, regulatory inquiries, and investigations. The Company records a liability for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable, and the loss can be reasonably estimated. Management has also identified certain other legal matters where they believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the Company’s business, financial position, results of operations, or cash flows, these matters are subject to inherent uncertainties and Management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. Revenue Recognition BMTX’s revenues from interchange and card revenue, servicing fees, account fees, and university fees are within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers . The Company recognizes revenue in accordance with FASB ASC Topic 606 when the performance obligations related to the transfer of services under the terms of a contract are satisfied. Some obligations are satisfied at a point in time while others are satisfied over a period of time. Revenue is recognized as the amount of consideration to which the Company expects to be entitled to in exchange for transferring services to a customer. The Company’s customer contracts do not contain terms that require significant judgment to determine the variability impacting the transaction price. A performance obligation is deemed satisfied when the control over services is transferred to the customer. Control is transferred to a customer either at a point in time or over time. To determine when control is transferred at a point in time, the Company considers indicators, including but not limited to, the right to payment, transfer of significant risk and rewards of ownership, and acceptance by the customer. When control is transferred over a period of time, the output method is used to measure progress for the transfer. The measure of progress used to assess completion of the performance obligation is based on time over the period of service. We assess our revenue arrangements against specific criteria in order to determine if we are acting as principal or agent. The Company determined that it is the agent in contracts for interchange and card revenue, and presents these revenues net of related expenses under FASB ASC Topic 606. Interchange and card revenue Interchange fees are earned whenever debit cards serviced by BMTX are processed through card payment networks. Interchange fees are recognized concurrent with the processing of the card transaction. Card revenue includes foreign ATM fees and MasterCard incentive income. ATM fees are recognized when the fee is deducted from the serviced account; MasterCard incentive income is primarily tied to debit spend volume and is recognized concurrent with spend. Servicing fees BMTX sources and services deposit accounts for its Partner Banks, and in exchange, is paid servicing fees. Servicing fees and terms are established by individually negotiated contractual agreements. A rate is applied to the daily average deposit balances. In all periods, servicing fees are recognized monthly based on average daily balances. Account fees BMTX earns account fees on BMTX serviced deposit accounts for transaction-based, account maintenance services. Account maintenance fees, which relate primarily to monthly maintenance fees for BMTX serviced accounts that do not meet minimum deposit balance requirements, are earned on a monthly basis representing the period over which BMTX satisfies its performance obligation. Transaction-based fees, which include services such as wire transfer fees, card replacement, and cash deposit via Green Dot network fees, are recognized at the time the transaction is completed. Service charges on deposit accounts are withdrawn from the depositor’s account balance. University fees BMTX earns university fees from Higher Education clients in exchange for financial aid and other student refund disbursement services provided. BMTX facilitates the distribution of financial aid and other refunds to students, while simultaneously enhancing the ability of the higher education institutions to comply with the federal regulations applicable to financial aid transactions. For these services, Higher Education institution clients are charged an annual subscription fee and/or per-transaction fees (e.g., check issuance, new card, card replacement fees) for certain transactions. The annual subscription fee is recognized ratably over the period of service using the output method and the transaction fees are recognized when the transaction is completed. BMTX typically enters into long-term (generally three or five-year initial term) contracts with Higher Education institutions to provide these refund management disbursement services. Advertising and Promotion Advertising and promotion costs are expensed as incurred. Collaborative Arrangements In the normal course of business, BMTX may enter into collaborative arrangements primarily to develop and commercialize banking products to its BaaS partners’ customers. Collaborative arrangements are contractual agreements with third-parties that involve a joint operating activity where both BMTX and the collaborating BaaS partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Collaborative activities typically include research and development, technology, product development, marketing, and day-to-day operations of the banking product. These agreements create contractual rights and do not represent an entity in which we have an equity interest. BMTX accounts for its rights and obligations under the specific requirements of the contracts. These arrangements often require the sharing of revenue and expense. BMTX’s expenses incurred pursuant to these arrangements are reported net of any payments due to or amounts due from BMTX’s BaaS partner, which are recognized at the time the BaaS partner becomes obligated to pay. For the twelve months ended December 31, 2023 and 2022, BMTX recognized fee sharing from its BaaS partners of $3.9 million and $7.5 million, respectively, from collaborative arrangements. These net proceeds include $(1.0) million and $1.4 million, respectively, in revenues (contra-revenues), recorded in Other revenue, Interchange and card revenue, and Servicing fees on the Consolidated Statements of Loss and $4.9 million and $6.1 million, respectively, in expense reimbursements, recorded in Technology, communication and processing, Salaries and employee benefits, and Professional services on the Consolidated Statements of Loss . Share-Based Compensation Expense The Company uses share-based compensation, including stock, restricted stock units, and performance stock units, to provide long-term performance incentives for its employees and directors. Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on the grant-date fair value for service-based awards. Compensation related to performance-based awards is recognized over the period the performance obligation is expected to be satisfied. For compensation related to performance-based awards with milestones, upon the grant date, and at each subsequent reporting period, we reassess whether it is probable that we will achieve each operational milestone, and if so, the period when we expect to achieve that operational milestone. For compensation related to performance-based awards with a market condition, we use a Monte Carlo simulation to determine the fair value of the award on the grant date, and recognize the share-based compensation expense over the derived service period. Forfeitures are recognized as they occur. Share-based compensation expense is included in Salaries and employee benefits . In addition, holders of shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations. 401(k) Plan On January 3, 2023, the Company implemented the BM Technologies, Inc. 401(k) Plan (the “401(k) Plan”) for the benefit of BMTX’s eligible employees. The 401(k) Plan permits eligible employees to make voluntary contributions combined with employer contributions, up to a maximum of $63.5 thousand per year, subject to certain limitations. The Company offers a matching contribution equal to 50% of an eligible employee’s deferral election up to 3% of their annual salary. The Company records its contributions to the 401(k) Plan in Salaries and employee benefits on the Consolidated Statements of Loss . The Company’s employer contribution to the 401(k) Plan for the twelve months ended December 31, 2023 totaled $0.6 million. Provision for Operating Losses The provision for operating losses represents BMTX’s obligation for losses resulting from fraud transactions that have generally been disputed by our serviced deposit account holders, Regulation E card claim losses incurred by us, an estimated liability for fraud and Regulation E losses where such disputes have not been resolved as of the end of the reporting period, a provision for overdrawn serviced deposit accounts for which we are responsible, net of any related recoveries. Fraud losses are recognized when realized or incurred. The main source of Regulation E losses is card holder claims of unauthorized use of their debit card. BMTX’s loss includes closed disputes where the customer is entitled to keep the funds advanced, an expected loss on actual disputes that are pending investigation, which is based on historical experience, as well as an estimate of disputes incurred, but not yet disputed. The estimated liability for disputes incurred, but not yet disputed is determined by analyzing historical rates of transactions disputed and applying that experience rate to actual debit card volume in the period. This estimate of future disputes is then adjusted for our estimate of the amount disputed that we expect to result in a loss, which is estimated based on our historical experience. The estimated liability totaled $1.3 million and $0.4 million as of December 31, 2023 and 2022, respectively; the changes period over period are presented within Provision for Operating Losses on the Consolidated Statements of Loss . Restructuring, Merger and Acquisition Related Expenses In connection with the Company’s Profit Enhancement Plan (the “PEP”), and previous unconsummated merger, BMTX incurred $0.9 million and $0.3 million in merger and acquisition expenses for the twelve months ended December 31, 2023 and 2022, respectively, which are recorded within Restructuring, merger and acquisition related expenses on the Consolidated Statements of Loss . Recently Adopted Accounting Standards As of December 31, 2023, there were no recently adopted accounting standards that had a material impact on the Company’s consolidated financial statements and related disclosures. Accounting Standards Issued but Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB that are adopted by BMTX as of the required effective dates. ASUs not listed below were assessed and determined to be either not applicable or to not have a material impact on BMTX’s financial statements taken as a whole. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in FASB ASC Topic 470-20, Debt: Debt with Conversion and Other Options , that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in FASB ASC Topic 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in FASB ASC Topic 260, Earnings Per Share , to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted earnings per share when an instrument may be settled in cash or shares. As a smaller reporting company, ASU 2020-06 is effective for BMTX for fiscal years beginning after December 15, 2023. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has determined that ASU 2020-06 will not have a material impact on its consolidated financial statements and related disclosure. In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net primarily relate to billings for deposit processing services to our Partner Banks, MasterCard incentive income, uncollected university subscription and disbursement services fees, and receivables from our BaaS partner, and are recorded at face amounts less an allowance for doubtful accounts. Management evaluates accounts receivable and establishes the allowance for doubtful accounts based on historical experience, analysis of past due accounts, and other current available information. Accounts receivable deemed to be uncollectible are individually identified and are charged-off against the allowance for doubtful accounts. The allowance for doubtful accounts was $1.1 million at December 31, 2023 and $0.3 million at December 31, 2022. (amounts in thousands) Beginning Balance Additions Reductions Ending Balance Allowance for doubtful accounts Twelve months ended December 31, 2022 $ 79 $ 381 $ (155) $ 305 Twelve months ended December 31, 2023 $ 305 $ 1,001 $ (206) $ 1,100 |
PREMISES AND EQUIPMENT AND DEVE
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE | PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE Premises and equipment The components of premises and equipment were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, IT equipment 3 to 5 years $ 930 $ 1,377 Accumulated depreciation (395) (869) Total $ 535 $ 508 BMTX recorded depreciation expense of $0.3 million for the twelve months ended December 31, 2023 as a component of Technology, communication, and processing expense on the Consolidated Statements of Loss and $0.3 million for the twelve months ended December 31, 2022 as a component of Occupancy expense on the Consolidated Statements of Loss. BMTX recorded no impairment expense for the twelve months ended December 31, 2023 and 2022. Developed software The components of developed software were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, Higher One Disbursement business developed software 10 years $ 27,400 $ 27,400 Internally developed software 3 to 7 years 43,225 42,504 Work-in-process 6,662 3,077 77,287 72,981 Accumulated amortization (61,114) (50,657) Total $ 16,173 $ 22,324 BMTX recorded amortization expense of $11.6 million and $11.4 million for the twelve months ended December 31, 2023 and 2022, respectively, as a component of Technology, communication and processing expense on the Consolidated Statements of Loss . BMTX recorded impairment expense of $0.6 million and zero for the twelve months ended December 31, 2023 and 2022, respectively, as a component of Technology, communication and processing expense on the Consolidated Statements of Loss . |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Goodwill represents the excess of the purchase price over the identifiable net assets of the businesses acquired through business combinations accounted for under the acquisition method. Goodwill is reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. There was no goodwill impairment for the twelve months ended December 31, 2023 and 2022. Other intangibles, net represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. We have one intangible asset which is being amortized on a straight-line basis over twenty years. The components of Other intangibles, net as of December 31, 2023 and 2022 were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, Customer relationships – universities 20 years $ 6,402 $ 6,402 Accumulated amortization (2,293) (1,973) Total $ 4,109 $ 4,429 Other intangibles, net includes assets subject to amortization that are reviewed for impairment under FASB ASC Topic 360, Property, Plant and Equipment . Amortization is recorded in Other expense on the Consolidated Statements of Loss . BMTX recorded amortization expense of $0.3 million and $0.3 million for the twelve months ended December 31, 2023 and 2022, respectively. The customer relationships - universities will be amortized in future periods as follows: 2024 $ 320 2025 320 2026 320 2027 320 After 2027 2,829 Total $ 4,109 There was no impairment for Other intangibles, net for the twelve months ended December 31, 2023 and 2022. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES At January 1, 2022, BMTX leased two offices under operating leases. On March 31, 2022, one of the two office leases matured and we exited our New Haven, CT office facility. On September 30, 2022, the second office lease matured at our Wayne, PA office. On October 1, 2022, the Company entered into a 3-month short-term lease extension for this office under substantially identical terms and conditions as the original lease. At December 31, 2022, the 3-month short-term lease extension expired and was not renewed. The Company’s corporate headquarters is currently operating under a month-to-month short-term lease. Operating lease expenses are recorded in Occupancy on the Consolidated Statements of Loss . BMTX recorded lease expense of less than $0.1 million and $0.5 million, for the twelve months ended December 31, 2023 and 2022, respectively. Cash paid pursuant to operating lease liabilities totaled zero and $0.4 million for the twelve months ended December 31, 2023 and 2022. These cash payments are reported as a component of cash flows provided by operating activities in the Consolidated Statements of Cash Flows . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the consolidated financial statements that are not currently accrued for. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution may have a material adverse effect on BMTX’s results of operations for a particular period, and future changes in circumstances or additional information could result in accruals or resolution in excess of established accruals, which could adversely affect BMTX’s results of operations, potentially materially. On June 5, 2023, the Company entered into an agreement to purchase certain software technology assets from a third-party. Purchase consideration was comprised of a cash payment of less than $0.1 million at closing and potential future contingent consideration of $0.5 million over the next three years if the technology is successfully and continuously deployed by the Company. The $0.5 million of contingent consideration is reported in Other non-current liabilities on the Consolidated Balance Sheets . |
SHAREHOLDERS' EQUITY AND PRIVAT
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY | SHAREHOLDERS’ EQUITY AND PRIVATE WARRANT LIABILITY Common Stock The Company is authorized to issue 1,000,000,000 shares of common stock, par value $0.0001 per share. At December 31, 2023, there were 11,984,133 shares of common stock issued and outstanding, which includes the 300,000 performance shares discussed below. At December 31, 2022, there were 12,240,237 shares of common stock issued and outstanding, which includes the 300,000 performance shares discussed below. Each holder of common stock is entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of common stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of December 31, 2023 and 2022, there were no shares of preferred stock issued or outstanding. Performance Shares The Company has 300,000 common shares, par value $0.0001 per share, issued and outstanding, that contain a restrictive legend, subject to release only if the vesting criteria are met before the seventh anniversary of the closing date of the merger with Megalith. If the vesting criteria are not met prior to the seven Dividend Policy We have not paid any cash dividends on our common stock to date, and have no present intention to pay cash dividends in the future. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of the Board of Directors of the Company. January 4, 2021 Share-Based Compensation Award In connection with its January 4, 2021 divestiture of the Company, Customers Bank, the Company’s former parent, granted 1,317,035 of the merger consideration shares of the Company it received to certain employees and executives of the Company. The share-based compensation award was subject to vesting conditions, including a required service condition from award recipients through January 3, 2023. The grant date fair value of the award, totaling $19.6 million, was recorded as share-based compensation expense in the Company’s Consolidated Statements of Loss on a straight-line basis over the two year post-grant vesting period, net of any actual forfeitures. The shares awarded were restricted until fully vested. The holders of restricted shares were provided an option to surrender a portion of their shares on the vesting date to cover their income tax obligations. On January 3, 2023, all restricted shares, net of prior forfeitures, vested. The change in unvested shares under the January 4, 2021 Share-Based Compensation Award is shown below: Number of Awards Weighted-Average Grant-Date Fair Value Per Award Balance as of December 31, 2021 1,283,535 $ 14.87 Granted — $ 14.87 Vested (88,889) $ 14.87 Forfeited (26,500) $ 14.87 Balance as of December 31, 2022 1,168,146 $ 14.87 Granted — $ — Vested (749,854) $ 14.87 Net settlement of share-based awards for taxes (418,292) $ 14.87 Balance as of December 31, 2023 — $ — BMTX recorded share-based compensation expense related to these awards of less than $0.1 million and $9.2 million for the twelve months ended December 31, 2023 and 2022, respectively. Equity Incentive Plan Our 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”) provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all which may be granted to employees, including officers, non-employee directors, and consultants of both the Company and its affiliates. Additionally, the 2020 Equity Incentive Plan provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants. On June 20, 2023, an amendment to the 2020 Equity Incentive Plan was approved by the Company’s stockholders. The amendment increased the total number of shares of common stocks authorized under the 2020 Equity Incentive Plan by 1,279,963 from 1,220,037 (the number of shares authorized under the original 2020 Equity Incentive Plan) to 2,500,000. Grants were made under the 2020 Equity Incentive Plan for the twelve months ended December 31, 2023 and 2022 as described within Restricted Stock Units and Performance - Based Restricted Stock Units below as well as the grants of unrestricted shares to directors which vest immediately. Restricted Stock Units Restricted Stock Units (“RSUs”) granted under the 2020 Equity Incentive Plan, as amended, generally vest in three or four equal installments on each anniversary of the grant date. The RSUs that have been granted are all paid in stock upon vesting, and are thus classified as equity awards, which are measured using the grant date fair value of BMTX common stock and are not remeasured at the end of each reporting period. We recognize compensation cost starting from the grant date on a straight-line basis over the required vesting period in accordance with FASB ASC Topic 718, Compensation - Stock Compensation . We account for forfeitures as they occur and reverse any previously recognized compensation expense related to forfeited awards. Performance - Based Restricted Stock Units Performance - Based Restricted Stock Units (“PBRSUs”) granted under the 2020 Equity Incentive Plan, as amended, currently vest upon the later of: a) the third year of employment following the grant date or b) the achievement of the specified performance goals within the fifth year of the grant date. As defined by the 2020 Equity Incentive Plan, as amended, the Compensation Committee of the Board of Directors determines the number of PBRSUs a participant earns based on the extent to which the corresponding performance goals have been achieved over the five-year performance cycle. The PBRSUs that have been granted are paid in stock upon vesting, and are thus classified as equity awards, which are measured using the grant date fair value of BMTX common stock and are not remeasured at the end of each reporting period. We account for forfeitures as they occur and reverse any previously recognized compensation expense related to forfeited awards. For PBRSUs with milestones, upon the grant date, and at each subsequent reporting period, we reassess whether it is probable that we will achieve each operational milestone, and if so, the period when we expect to achieve that operational milestone. If upon the grant date, we determine that achievement of an operational milestone is probable, we allocate the full share-based compensation expense over the period between the grant date and the expected vesting condition achievement date. If upon the grant date, achievement of the operational milestone is not probable, we do not recognize compensation expense. If after the grant date, we determine achievement of an operational milestone becomes probable, we will allocate the full share-based compensation expense over the period between the grant date and the expected vesting condition achievement date, and we will recognize a catch-up expense equal to the value of previously unrecognized expense from the grant date to the vesting condition achievement date. For PBRSUs with a market condition, we used a Monte Carlo simulation to determine the fair value on the grant date, and recognize the share-based compensation expense over the derived service period. The change in unvested RSUs and PBRSUs awarded is shown below: Restricted Stock Units Performance-Based Restricted Stock Units Number of RSUs Weighted-Average Grant-Date Fair Value Per RSU Number of RSUs Weighted-Average Grant-Date Fair Value Per RSU Balance as of December 31, 2021 357,100 $ 8.99 347,500 $ 7.09 Granted 85,540 $ 7.87 — $ — Vested (93,275) $ 9.10 — $ — Forfeited (24,575) $ 9.79 (12,500) $ 7.09 Balance as of December 31, 2022 324,790 $ 8.84 335,000 $ 7.09 Granted 719,690 $ 3.13 455,000 $ 2.94 Vested (287,470) $ 4.62 — $ — Forfeited (311,904) $ 4.19 (295,000) $ 3.57 Balance as of December 31, 2023 445,106 $ 6.47 495,000 $ 2.99 For the twelve months ended December 31, 2023 and 2022, the share-based compensation expense related to the RSU awards totaled $1.3 million and $1.0 million, respectively. At December 31, 2023, unrecognized compensation expense related to the unvested portion of the RSUs was approximately $1.5 million and is expected to be recognized over a term of 1.92 years. For the twelve months ended December 31, 2023 and 2022, the share-based compensation expense related to the PBRSUs awards totaled $0.5 million and $1.0 million, respectively. At December 31, 2023, unrecognized compensation expense related to the unvested portion of the PBRSUs was approximately $0.9 million and is expected to be recognized over a term of 1.9 years. Directors Grants The Company grants common shares to its Board of Directors on a discretionary basis. These shares vest immediately upon grant. During the twelve months ended December 31, 2023 and December 31, 2022 the Company granted zero and 1,000 shares of common stock to each of its Directors, for a total of zero and 6,000 shares with share-based compensation expense totaling zero and less than $0.1 million, respectively. Employee Stock Purchase Plan (“ESPP”) The Company has an ESPP (the “BM Technologies Inc. 2021 Employee Stock Purchase Plan”) which has an effective date of May 1, 2021. The purpose of the ESPP is to provide eligible employees with an incentive to advance the interests of the Company, by affording them an opportunity to purchase stock of the Company at a favorable price. As of December 31, 2023, there have been no shares purchased on behalf of employees under the ESPP, as the program has not yet been made available for employee participation. Warrants At December 31, 2023 and 2022, respectively, there were 22,703,004 warrants to purchase our common stock outstanding. The warrant totals for each period-end consist of 17,294,044 and 17,227,189 public warrants and 5,408,960 and 5,475,815 private warrants, as of December 31, 2023 and 2022, respectively. Each whole warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 per share. The warrants will expire five years after the completion of the merger with Megalith (January 4, 2026) or earlier upon redemption or liquidation; the Company has redemption rights if our common stock trades above $24.00 for 20 out of 30 days. The private warrants are identical to the public warrants except that the private warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor and certain other original holders. As of December 31, 2023, 1,600 of the Company’s outstanding public warrants have been exercised and 1,169,963 of the private warrants have been repurchased by the Company from related parties at $1.69 per warrant. During the twelve months ended December 31, 2023, 66,855 of the private warrants were reclassified to public warrants based upon a sale of the private warrants by the original holders which resulted in a modification of terms that effect classification as public warrants. During the twelve months ended December 31, 2023, there were no public warrants exercised. During the twelve months ended December 31, 2022, 300,000 of the private warrants were reclassified to public warrants based upon a sale of the private warrants by the original holders which resulted in a modification of terms that effect classification as public warrants. During the twelve months ended December 31, 2022, there were 100 public warrants exercised. The private warrants and the public warrants are treated differently for accounting purposes, as follows: Private Warrants In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the private warrants are accounted for as liabilities and are marked-to-market each reporting period with the change in fair value recognized in earnings. In general, under the mark-to-market accounting model, as our stock price increases, the private warrant liability increases, and we recognize additional expense in our Consolidated Statements of Loss – with the opposite when our stock price declines. Accordingly, the periodic revaluation of the private warrants could result in significant volatility in our reported earnings. Opening Balance Sheet Impact: As of the date of our merger with Megalith on January 4, 2021, the $30.8 million fair value of the private warrants was recorded as a warrant liability on our Consolidated Balance Sheets in Liability for private warrants with a corresponding offset to Additional paid-in capital within equity. The fair value of the private warrants was estimated using a modified version of the Black-Scholes option pricing formula. We assumed a term for the private warrants equal to the contractual term from the merger date and then discounted the resulting value to the valuation date. Among the key inputs and assumptions used in the pricing formula at January 4, 2021: a term of 5.0 years; volatility of 20%; a dividend yield of zero; an underlying stock price of $14.76; a risk free interest rate of 0.38%; and a closing price of the public warrants of $2.50 per share. Income Statement Impact : Subsequent to the close of the merger, any change in fair value of the private warrants is recognized in our Consolidated Statements of Loss below operating profit as Gain on fair value of private warrant liability with a corresponding amount recognized in the Liability for private warrants on our Consolidated Balance Sheets . For the twelve months ended December 31, 2023 and 2022, we recorded a gain of $2.7 million and $8.1 million, respectively, resulting from the revaluation of the private warrants. Balance Sheet Impact : The private warrant liability is presented in the account Liability for private warrants in the long-term liabilities section of our Consolidated Balance Sheets . As noted above, the change in fair value of the underlying private warrants results in a corresponding change in the balance of the warrant liability on our Consolidated Balance Sheets . When warrants are exercised, the fair value of the liability is reclassified to Additional paid-in capital within equity. Cash received for the exercise of warrants is reflected in Cash and cash equivalents with a corresponding offset recorded in Common Stock and Additional paid-in capital within equity. Cash Flow Impact : The impact of the change in fair value of the private warrants has no impact on our cash flows as it is a noncash adjustment. Cash received for the exercise of warrants is recorded in cash flows from financing activities. Cash paid for the repurchase of warrants is recorded in cash flows from financing activities. During the twelve months ended December 31, 2022, the Company repurchased private warrants from related parties for cash consideration totaling $2.0 million. No such transactions occurred during the twelve months ended December 31, 2023. Shareholders’ Equity Impact : The impact to Additional paid-in capital as of the opening balance sheet is described above. Exercises of private warrants results in a reduction of the Liability for private warrants on the Consolidated Balance Sheets with a corresponding increase to Common Stock and Additional paid-in capital . Public Warrants In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the public warrants are treated as equity instruments under U.S. GAAP. The public warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Exercises of the public warrants are recorded as cash is received and are recorded in Cash and cash equivalents , with a corresponding offset recorded in Common stoc k and Additional paid-in capital within equity. During the twelve months ended December 31, 2023, there were no exercises of public warrants. During the twelve months ended December 31, 2022, there were exercises of 100 public warrants with cash proceeds totaling less than $0.1 million. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues BMTX recognizes operating revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers . The following table presents BMTX’s revenues disaggregated by nature of the revenue stream and the pattern or timing of revenue recognition for the twelve months ended December 31, 2023 and 2022. The Company has one reportable segment and all revenues are earned in the U.S. Twelve Months Ended (amounts in thousands) 2023 2022 Revenues: Revenue recognized at point in time: Interchange and card revenue $ 9,447 $ 22,318 Servicing fees 31,460 44,581 Account fees 8,099 8,992 University fees - disbursement activity 881 1,108 Other revenue 202 1,720 Total revenue recognized at point in time 50,089 78,719 Revenue recognized over time: University fees - subscriptions 4,820 4,626 Other revenue - maintenance and support 343 252 Total revenue recognized over time 5,163 4,878 Total revenues $ 55,252 $ 83,597 Deferred Revenue Deferred revenue consists of payments received from customers prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied. The deferred revenue balances were as follows: December 31, (amounts in thousands) 2023 2022 Deferred revenue $ 12,449 $ 6,647 During the twelve months ended December 31, 2023, the Company recognized revenue of approximately $6.6 million included in deferred revenue at the beginning of the period. During the twelve months ended December 31, 2022, the Company recognized revenue of approximately $15.4 million included in deferred revenue at the beginning of the period. Unbilled receivables The Company had $1.5 million of unbilled receivables, or amounts recognized as revenue for which invoices have not yet been issued, as of December 31, 2023, and $2.6 million as of December 31, 2022. Unbilled receivables are reported in Accounts receivable, net on the Consolidated Balance Sheets . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of income tax expense (benefit) were as follows: Twelve Months Ended (amounts in thousands) 2023 2022 Current expense (benefit) Federal $ — $ (423) State 16 12 Total current expense (benefit) $ 16 $ (411) Deferred expense (benefit) Federal $ (4,357) $ (296) State (383) 8 Change in valuation allowance 4,740 288 Total deferred expense (benefit) $ — $ — Total income tax expense (benefit) $ 16 $ (411) Effective tax rates differ from the federal statutory rate of 21% due to the following: Twelve months ended December 31, 2023 2022 (amounts in thousands) Amount % of pretax loss Amount % of pretax loss Federal income tax at statutory rate $ (3,636) 21.00 % $ (250) 21.00 % State taxes, net of federal benefit 490 (2.83) % (457) 38.48 % Change in fair value of warrant liabilities (560) 3.23 % (1,694) 142.51 % Change in valuation allowance 4,740 (27.38) % 288 (24.23) % Nondeductible compensation 5 (0.03) % 2,183 (183.64) % Tax credits (1,023) 5.91 % (545) 45.86 % Other (1) 0.01 % 64 (5.39) % Total $ 16 (0.09) % $ (411) 34.59 % As of December 31, 2023 and 2022, the Company had no FASB ASC Topic 740-10 unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. The Company recognized interest and penalties on unrecognized tax benefits of less than $0.1 million for the twelve months ended December 31, 2023 and 2022 in Other expense on our Consolidated Statements of Loss . As of December 31, 2023, the Company had $18.5 million of federal net operating loss carryforward and $19.1 million of state net operating loss carryforwards. As of December 31, 2022, the Company had $0.3 million of federal net operating loss carryforward and $0.3 million of state net operating loss carryforwards. The federal net operating loss carryforward does not have an expiration date. The state net operating loss carryforwards have differing expiration dates depending on the jurisdiction. As of December 31, 2023 there was $0.9 million of federal tax credit carryforwards and $0.1 million of state tax credit carryforwards. The federal tax credit carryforward begins to expire in 2042 and the state tax credit carryforwards have differing expiration dates depending on the jurisdiction. Deferred income taxes reflect temporary differences in the recognition of revenue and expenses for tax reporting and financial statement purposes, principally because certain items are recognized in different periods for financial reporting and tax return purposes. The following represents the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022: (amounts in thousands) December 31, 2023 December 31, 2022 Deferred tax assets: Section 197 Intangibles $ 27,164 $ 27,794 Nondeductible compensation 752 2,005 Accrued bonuses 63 162 Tax credits 1,022 — Other 5,832 385 Less: Valuation Allowance (34,690) (29,950) Total deferred tax assets $ 143 $ 396 Deferred tax liabilities Depreciation (90) (340) Capitalized costs (53) (56) Total deferred tax liabilities $ (143) $ (396) Net deferred tax asset (liability) $ — $ — Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income within the carry back period. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, Management considered the scheduled reversal of the deferred tax liabilities, the level of historical income, and the projected future taxable income over the periods in which the temporary difference comprising the deferred tax assets will be deductible. Based on its assessment, Management determined that a full valuation allowance is necessary as of December 31, 2023 and 2022. The Company is subject to income tax examinations by federal, state, and local taxing authorities for tax periods ended after December 31, 2019. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | LOSS PER SHARE The following are the components and results of operations and loss per common share calculations for the periods presented: Twelve Months Ended (amounts in thousands, except share and per share data) 2023 2022 Net loss available to common shareholders $ (17,331) $ (779) Net loss used for EPS $ (17,331) $ (779) Weighted-average number of common shares outstanding – basic 11,574 11,942 Weighted-average number of common shares outstanding – diluted 11,574 11,942 Basic loss per common share $ (1.50) $ (0.07) Diluted loss per common share $ (1.50) $ (0.07) For basic loss per share, the performance shares are subject to forfeiture and they are considered share-indexed instruments and not outstanding shares until they are vested. During the twelve months ended December 31, 2023 and 2022, the vesting criteria has not been met and they are not included. For the twelve months ended December 31, 2023, our performance shares, public warrants, and private warrants were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved for the performance shares and the average stock price for the period was below the strike price for the warrants. The performance shares are only considered in the calculation for diluted loss per share if they are dilutive in nature. The performance shares are only dilutive when the average share price is greater than the strike price and when positive net income is reported. During the twelve months ended December 31, 2023, the average share price was below the strike price and these shares were not included in the diluted loss per share calculations. For the twelve months ended December 31, 2023, our performance-based RSUs were also excluded because the vesting is contingent upon the satisfaction of certain conditions which had not been achieved as of December 31, 2023. For the twelve months ended December 31, 2023, 445 of our service-based RSUs were also excluded as the effect would be antidilutive. For the twelve months ended December 31, 2022, our performance shares, public warrants, and private warrants were excluded from the computation of diluted weighted average shares outstanding as the necessary conditions had not been achieved for the performance shares and the average stock price for the period was below the strike price for the warrants. The performance shares are only considered in the calculation for diluted loss per share if they are dilutive in nature. The performance shares are only dilutive when the average share price is greater than the strike price and when positive net income is reported. During the twelve months ended December 31, 2022, the average share price was below the strike price and these shares were not included in the diluted loss per share calculations. For the twelve months ended December 31, 2022, our performance-based RSUs were also excluded because the vesting is contingent upon the satisfaction of certain conditions which had not been achieved as of December 31, 2022. For the twelve months ended December 31, 2022, 309 of our service-based RSUs were also excluded as the effect would be antidilutive. The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock: Twelve Months Ended (amounts in thousands) 2023 2022 Performance based shares 300 300 Public warrants 17,294 17,227 Private warrants 5,409 5,476 Performance-based RSUs 495 335 Service-based RSUs 445 309 Total 23,943 23,647 |
DISCLOSURES ABOUT FAIR VALUE OF
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS BMTX uses fair value measurements to determine and disclose the fair value of its financial instruments. FASB’s ASC Topic 825, Financial Instruments , requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For fair value disclosure purposes, BMTX utilized the fair value measurement criteria under FASB ASC Topic 820, Fair Value Measurements (“ASC 820”). In accordance with FASB ASC Topic 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for BMTX’s financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions were used to estimate the fair value of BMTX’s financial instruments as of December 31, 2023 and 2022: Cash and cash equivalents Cash and cash equivalents reported on the Consolidated Balance Sheets consists of non-interest bearing demand deposits, for which carrying value approximates fair value. Accounts receivable, net The carrying amount of accounts receivable approximates fair value because of the short-term nature of these items. Liability for Private Warrants The fair value of the private warrants was estimated using a modified version of the binomial lattice model incorporating the Cox-Ross-Rubenstein methodology as of December 31, 2023 and 2022. We assumed a term for the private warrants equal to the contractual term from the date of the merger with Megalith and then discounted the resulting value to the valuation date. Among the key inputs and assumptions used in the pricing formula at December 31, 2023 were the following: a term of 2.02 years; volatility of 58%; a dividend yield of zero; an underlying stock price of $2.05; a risk free interest rate of 4.18%; and a closing price of the public warrants of $0.03 per share. Among the key inputs and assumptions used in the pricing model at December 31, 2022 were the following: a term of 3.01 years; volatility of 43%; a dividend yield of zero; an underlying stock price of $5.21; a risk free interest rate of 4.17%; and a closing price of the public warrants of $0.52 per share. As of December 31, 2023 and 2022, the warrant liability is classified as a Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. The estimated fair value of BMTX’s financial instruments at December 31, 2023 and December 31, 2022 were as follows: Fair Value Measurements at December 31, 2023 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 14,288 $ 14,288 $ 14,288 $ — $ — Accounts receivable, net 9,128 9,128 9,128 — — Liabilities: Liability for private warrants $ 162 $ 162 $ — $ — $ 162 Fair Value Measurements at December 31, 2022 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 21,108 $ 21,108 $ 21,108 $ — $ — Accounts receivable, net 8,260 8,260 8,260 — — Liabilities: Liability for private warrants $ 2,847 $ 2,847 $ — $ — $ 2,847 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has several relationships with our Partner Banks, which are related parties of the Company. These relationships are described below. Customers Bank Cash management All the Company’s cash and cash equivalents are on deposit with Customers Bank. Servicing fees and interchange income On January 4, 2021, the Company entered into a Deposit Processing Services Agreement with Customers Bank, which provided that Customers Bank would establish and maintain deposit accounts and other banking services in connection with customized products and services offered by the Company, and the Company would provide certain other related services in connection with the accounts. Customers Bank retained any and all revenue generated from the funds held in the deposit accounts, and in exchange, paid the Company a 3% servicing fee based on average monthly deposit balances, subject to certain contractual adjustments, and a monthly interchange fee equal to all debit card interchange revenues on the demand deposit accounts, plus the difference between Durbin exempt and Durbin regulated interchange revenue. On June 29, 2022, the Company received written notice from Customers Bank that it did not intend to renew the Deposit Servicing Agreement with the Company. The 180-day notice was given in accordance with the terms of the Deposit Servicing Agreement, as a result of which, the Deposit Servicing Agreement would terminate effective December 31, 2022. On November 7, 2022, the Company and Customers Bank entered into the DPSA Amendment to extend the Deposit Servicing Agreement termination date to the earlier of the Company’s successful completion of the transfer of the Company’s serviced deposits to a new partner bank or June 30, 2023. The DPSA Amendment also removed Customers Bank’s obligation to pay the Company the difference between the Durbin exempt and Durbin regulated interchange revenues. The other terms of the Deposit Servicing Agreement remained in effect through the new termination date. On March 22, 2023, the Company and Customers Bank entered into the DPSA Second Amendment. The DPSA Second Amendment, among other things, extended the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s serviced deposits to a Durbin exempt sponsor bank; or (ii) June 30, 2024; and revised the fee structure of the Deposit Processing Services Agreement. The other terms of the Deposit Processing Services Agreement, as amended by the DPSA Amendment, remained in effect through the new termination date. On August 18, 2023, the Company and Customers Bank entered into a third amendment to the Deposit Processing Services Agreement (the “DPSA Third Amendment”) for the Higher Education serviced deposit accounts. The DPSA Third Amendment extended the termination date of the Deposit Processing Services Agreement until the earlier of (i) the transfer of the Company’s Higher Education serviced deposits to a Durbin-exempt partner bank; or (ii) April 15, 2025. On March 22, 2023, the Company and Customers Bank entered into the 2023 Deposit Servicing Agreement, under which, effective March 31, 2023, the Company will perform, on behalf of Customers Bank, Customer Bank’s services, duties, and obligations under the Private Label Banking Program Agreement (the “PLBPA”) by and between Customers Bank and T-Mobile USA, Inc. that are not required by Applicable Law (as defined in the 2023 Deposit Servicing Agreement) to be provided by an FDIC insured financial institution. The obligations of the Company and Customers Bank under the 2023 Deposit Servicing Agreement are similar to those under the Deposit Processing Services Agreement; provided, however, that (i) as of March 31, 2023, the 2023 Deposit Servicing Agreement and not the Deposit Processing Services Agreement shall govern the terms, conditions, roles, responsibilities, duties, and obligations of the Company and Customers Bank with respect to the PLBPA and the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement); (ii) the Deposit Processing Services Agreement is amended to the extent necessary or advisable to effect the same, including, without limitation, such that “Depositor” under the Deposit Processing Services Agreement shall not include any T-Mobile Customer (as defined in the PLBPA); and (iii) there is a different fee structure under the 2023 Deposit Servicing Agreement from that set forth in the Deposit Processing Services Agreement. The initial term of the 2023 Deposit Servicing Agreement continues until February 24, 2025, and will automatically renew for additional one year terms unless either party gives written notice of non-renewal at least 180 days prior to the expiration of the then-current term. The 2023 Deposit Servicing Agreement may be terminated early by either party upon material breach, upon notice of an uncured objection from a regulatory authority, or by the Company upon 120 days’ written notice upon the satisfaction of certain conditions. As compensation under the 2023 Deposit Servicing Agreement, Customers Bank will retain any and all revenue generated from the funds held in the deposit accounts, and Customers Bank will pay the Company monthly servicing fees as set forth in the 2023 Deposit Servicing Agreement. In addition, the Company will have the right to retain all revenue generated by or from the Depositor Accounts (as defined in the 2023 Deposit Servicing Agreement), including, but not limited to, fees and all other miscellaneous revenues. The Company also shall retain all fees (including without limitation interchange fees), and charges generated by its ATMs and from its payment processing services. The Company will be solely liable for any and all fees, expenses, costs, reimbursements, and other amounts that are or may become due and payable under the PLBPA, including, without limitation, any Durbin-Exempt Interchange (as defined in the 2023 Deposit Servicing Agreement) fees payable to T-Mobile under the PLBPA. Customers Bank may set off any and all PLBPA Amounts against any compensation payable to the Company under the 2023 Deposit Servicing Agreement. Transition Services Agreement On January 4, 2021, we entered into a Transition Services Agreement with Customers Bank, pursuant to which each party agreed for a period of up to twelve months to provide certain transition services listed therein to the other party. A limited number of these transition services were subsequently extended through March 31, 2022. In consideration for the services, we paid Customers Bank a service fee of $12,500 per month, plus any expenses associated with the services. The Transition Services Agreement included a provision for providing the Company with assistance in the establishment and administration of a 401(k) plan for the benefit of Company employees. The Customers Bank 401(k) plan is a multi-employer plan, as defined by the U.S. Department of Labor in accordance with the Employee Retirement Income Security Act of 1974, and through December 31, 2022, the Customers Bank 401(k) covered both the full-time employees of Customers Bank and the Company. The Company records its contributions to the Customers Bank 401(k) Plan in Salaries and employee benefits on the Consolidated Statements of Loss . The Company’s employer contribution to the Customers Bank 401(k) Plan for the twelve months ended December 31, 2023 and 2022 totaled zero and $0.8 million, respectively. Other On January 4, 2021, the Company entered into a Software License Agreement with Customers Bank which provides it with a non-exclusive, non-transferable, royalty-free license to utilize our mobile banking technology for a period up to 10 years. The Software License Agreement is cancellable by Customers Bank at any time, without notice, and without penalty, and for any reason or no reason at all. To date, Customers Bank has not utilized the Company’s mobile banking technology and zero consideration has been paid or recognized under the Software License Agreement. On January 4, 2021, the Company entered into a Non-Competition and Non-Solicitation Agreement with Customers Bank providing that Customers Bank will not, for a period of 4 years after the closing of the divestiture, directly or indirectly engage in the Company’s business in the territory (both as defined in the Non-Competition Agreement), except for white label digital banking services with previously identified parties and passive investments of no more than 2% of a class of equity interests of a competitor that is publicly traded. Customers Bank also agreed not to directly or indirectly hire or solicit any employees of the Company. On November 29, 2021, the Company entered into an agreement with Customers Bank which terminated the $10.0 million letter of credit and gave the Company the right to any shares that were forfeited as part of the January 4, 2021 Share-Based Compensation Award. During the twelve months ended December 31, 2023, zero forfeited shares were reacquired by the Company from Customers Bank. During the twelve months ended December 31, 2022, 26,500 forfeited shares were reacquired by the Company from Customers Bank and 19,000 forfeited shares prior to the execution of the agreement were returned to Customers Bank. Both the President and Executive Chairman of the Board of Customers Bank are immediate family members of the Company’s CEO, and together with their spouses own less than 5.0% of the Company’s outstanding common stock as of December 31, 2023 and 2022. On March 1, 2022, the Company reached an agreement, with settlement on March 11, 2022, to reacquire 1,169,963 private warrants at a price of $1.69 per warrant, or a total cost of $2.0 million, from Ms. Sherry Sidhu and Mr. Samvir Sidhu, who are immediate family members of our CEO. The transaction price was established based on the range of market prices during the repurchase conversations and was approved by the Company’s Audit Committee. On April 20, 2022, the Company entered into a Special Limited Agency Agreement (“SLA”) with Customers Bank that provides for marketing assistance from the Company for originating consumer installment loans funded by Customers Bank. In consideration for this marketing assistance, the Company receives certain fees specified within the SLA which are recorded as a component of Other revenue within the Consolidated Statements of Loss . During the twelve ended December 31, 2022, less than $0.1 million of revenue was realized under the SLA. The SLA expired on December 31, 2022. Positions with Customers Bank are presented on our Consolidated Balance Sheets in Accounts receivable, net , Deferred revenue, current, and Accounts payable and accrued liabilities . The Accounts receivable balances related to Customers Bank as of December 31, 2023 and 2022 were $1.4 million and $1.4 million, respectively. The Deferred revenue balances related to Customers Bank as of December 31, 2023 and 2022 were $1.3 million and $3.8 million, respectively. The Accounts payable and accrued liabilities balances related to Customers Bank as of December 31, 2023 and 2022 were zero and $3.8 million, respectively. The Company recognized $48.3 million and $74.7 million in revenues from Customers Bank for the twelve months ended December 31, 2023 and 2022, respectively. Of these amounts, $20.9 million and $22.5 million are paid directly by MasterCard or individual account holders to the Company for the twelve months ended December 31, 2023 and 2022, respectively. These amounts are presented on our Consolidated Statements of Loss in Total operating revenues . The Company recognized zero and less than $0.1 million of expenses from Customers Bank for the twelve months ended December 31, 2023 and 2022, respectively. These amounts are presented on our Consolidated Statements of Loss in Total operating expenses . First Carolina Bank Deposit Servicing Agreement for Higher Education On March 16, 2023, the Company entered into a Deposit Servicing Agreement (the “FCB Deposit Servicing Agreement”) with a new partner bank, First Carolina Bank, a North Carolina chartered, non-member community bank (“FCB”), which provides that FCB will establish and maintain deposit accounts and other banking services in connection with customized products and services offered by the Company to its Higher Education institution clients, and the Company will provide certain other related services in connection with the accounts. FCB retains any and all revenue generated from the funds held in the deposit accounts, and in exchange, pays the Company a deposit servicing fee that is based on a calculation provided by the terms in the FCB Deposit Servicing Agreement, based on average monthly deposit balances and subject to certain contractual adjustments, and a monthly interchange fee equal to all debit card interchange revenues on the demand deposit accounts, minus an interchange share percentage. On August 20, 2023, the Company and FCB entered into an amendment to the FCB Deposit Servicing Agreement (the “FCB DPSA First Amendment”). The FCB DPSA First Amendment, among other things, (i) extends the initial term from four years to five years after the effective date, (ii) provides that FCB will work with the Company and Customers Bank on the timely transfer of existing student depositor accounts on or before the effective date, and as agreed to by the parties, and (iii) amends the effective date to be the date on which FCB takes on deposits from the existing student depositor accounts. The FCB Deposit Servicing Agreement and Amendment thereof may be terminated early by either party upon material breach, by either party upon notice that the continuation of the Depositor Program violates Applicable Law or Network Rules (as defined in the FCB Deposit Servicing Agreement); by FCB if a regulatory authority determined that the performance of its obligations under the FCB Deposit Servicing Agreement was not consistent with safe and sound banking practices; by either party upon the other party commencing or being subject to certain bankruptcy proceedings; and by the Company should it experience a change in control on or after March 16, 2026. On December 1, 2023, the Company and FCB completed the transfer of existing student depositor accounts from Customers Bank to FCB. Positions with FCB are presented on our Consolidated Balance Sheets in Accounts receivable, net , Deferred revenue, current, and Accounts payable and accrued liabilities . The Accounts receivable balance related to FCB as of December 31, 2023 was $0.2 million. The Deferred revenue balance related to FCB as of December 31, 2023 was $7.4 million. The Accounts payable and accrued liabilities balance related to FCB as of December 31, 2023 was zero. The Company recognized $3.4 million in net revenues from FCB for the twelve months ended December 31, 2023, which is presented on our Consolidated Statements of Loss in Total operating revenues . |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES On January 26, 2023, and in connection with our previously announced near-term strategy to focus on being an innovative, efficient, risk oriented fintech with a partner bank model, the Company committed to a targeted Profit Enhancement Plan (the “PEP”) that is intended to reduce operating costs, improve operating margins, improve operating cash flow, and continue advancing the Company’s ongoing commitment to profitable growth and continued innovation, and direct the Company’s resources toward its best opportunities. Included within the PEP was a targeted reduction of the Company’s 2023 employee workforce of approximately 25% as compared to its headcount at December 31, 2022. This workforce reduction was in addition to targeted spend reduction and service provider rationalization. The Company completed a workforce reduction of 58 employees during the twelve months ended December 31, 2023. The Company’s workforce reduction expenses, consisting of severance and other termination benefits for the twelve months ended December 31, 2023, totaled $1.0 million and are recorded in Restructuring, merger, and acquisition related expenses on the Consolidated Statements of Loss. $0.2 million of these expenses were incurred but not paid at December 31, 2023 and are included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets |
IMMATERIAL CORRECTION OF PRIOR
IMMATERIAL CORRECTION OF PRIOR PERIOD ERROR | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
IMMATERIAL CORRECTION OF PRIOR PERIOD ERROR | IMMATERIAL CORRECTION OF PRIOR PERIOD ERROR In accordance with FASB ASC Topic 606, Revenue from Contracts with Customers , the Company presents its interchange and card revenue net of related interchange expenses as it is deemed to be agent in these contracts. During the preparation of its December 31, 2023 consolidated financial statements, the Company identified an immaterial error in its accounting for certain of its interchange expenses for the three months ended March 31, 2023, three months ended June 30, 2023, and the three months ended September 30, 2023, reflecting the impacted revenues gross instead of net as required. The effect of these errors: • Overstated Interchange and card revenue and Technology, communication, and processing expense by an equal and offsetting $0.1 million during the three months ended March 31, 2023, • Overstated Interchange and card revenue and Technology, communication, and processing expense by an equal and offsetting $0.3 million during the three months ended June 30, 2023, and • Overstated Interchange and card revenue and Technology, communication, and processing expense by an equal and offsetting $0.4 million during the three months ended September 30, 2023. The impact of these errors had no effect on Net loss . The Company assessed the materiality of these errors on the interim period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections ). Based on this assessment, the Company concluded that these error corrections in its Consolidated Statements of Loss are not material to any previously presented consolidated financial statements. The correction had no impact on the Consolidated Balance Sheets , Consolidated Statements of Changes in Shareholders’ Equity , Consolidated Statements of Cash Flows , or Notes to the Consolidated Financial Statements , other than Note 9 - Revenues and Note 13 - Related Party Transactions |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Changes to Executive Management On February 5, 2024, James Dullinger, the Company’s current Chief Financial Officer, provided notice to, and the Company mutually agreed to not to renew Mr. Dullinger’s existing Employment Agreement dated January 26, 2023 (as amended, the “Dullinger Agreement”) upon its expiration on March 31, 2024. On March 26, 2024, the Company’s Board of Directors approved the extension of Mr. Dullinger’s service as Chief Financial Officer and the Company and Mr. Dullinger executed a second amendment to Mr. Dullinger’s Employment Agreement providing for the extension of Mr. Dullinger’s employment as Chief Financial Officer of the Company through April 5, 2024, payment of an extension bonus, payment for earned paid time off, and deletion of non-compete restrictions (the “Dullinger Amendment”). On February 5, 2024, the Company appointed Ajay Asija to serve as Deputy Chief Financial Officer effective February 5, 2024 for a transition period, and as Chief Financial Officer, effective April 1, 2024. In conjunction with the appointment, the Company and Mr. Asija entered into an employment agreement (the “Asija Agreement”) which provides for: • An annual base salary of not less than $275,000; • Potential for annual cash and equity incentive compensation in an amount, form, and at such time as provided in executive incentive plans as approved by the Board of Directors from time to time; • Severance compensation for up to one year’s compensation based upon then-current base salary, plus average annual performance bonus over the preceding three years, together with vesting of certain awards in the event of a termination of Mr. Asija’s employment without cause or by Mr. Asija for good reason as those terms are defined in the Asia Employment Agreement; • Automatic vesting of 50% of equity awards if employment is terminated by Mr. Asija for good reason within the initial term of one (1) year; or if such termination occurs within 12 months of a change in control; • Automatic vesting of all equity awards if employment is terminated by the Company without cause; of if employment is terminated by Mr. Asija for good reason after the initial term of one (1) year; • Customary non-disclosure, non-compete, and non-disparagement provisions; and • A term of one (1) year commencing on February 5, 2024, and renewing automatically on each one (1) year anniversary for an additional term of one (1) year, unless either party delivers notice to the contrary to the other party at least sixty (60) days prior to such one (1) year anniversary. In addition, and in connection with Mr. Asija’s appointment to Chief Financial Officer, the Company awarded Mr. Asija 300,000 restricted stock units under an Inducement Award Agreement (the “Inducement RSUs”) with a grant date of February 5, 2024. Of the Inducements RSUs, 50% are service-based, one-fourth of which will vest on each anniversary of the vesting commencement date over a four-year period, in each case subject to Mr. Asija’s continued employment with the Company until such respective vesting date. The remaining 50% are performance-based, based on the attainment of performance criteria as specified in the Inducement Award Agreement, and subject to a vesting schedule where shares are earned based on performance within the first three years, evaluated at each quarter-end following the grant date, provided no shares of Company common stock will be paid out until at least the third anniversary of the grant date. In connection with the Dullinger Amendment, the Company and Mr. Asija entered into a first amendment (the “Asija Amendment”) to the Asija Agreement to modify the effective date on which Mr. Asija will assume the role as the Company's Chief Financial Officer, from April 1, 2024 to April 6, 2024. Cancellation and Replacement of Performance-based Restricted Stock Units On February 6, 2024, Luvleen Sidhu, the Company’s Chief Executive Officer, and Jamie Donahue, the Company’s President and Chief Technology Officer (collectively, the “Covered Executives”), entered into a letter agreement with the Company (the “RSU Cancellation Agreement”), pursuant to which each Covered Executive and the Company mutually agreed to the cancellation of the unvested performance-based restricted stock unit awards previously granted to the Covered Executives effective September 30, 2021. The RSU Cancellation Agreement was entered into by the Covered Executives in consideration for their continued employment and for the Company’s issuance of new performance-based restricted stock units in such amounts as approved by the Compensation Committee of the Board of Directors with modified performance-based vesting criteria, in accordance with the terms of the 2020 Equity Incentive Plan, as amended. On February 5, 2024, the Company granted service-based and performance-based restricted stock units under the Company’s 2020 Equity Incentive Plan, as amended, to certain officers of the Company, inclusive of the new performance-based restricted stock units issued to the Covered Executives in connection with the RSU Cancellation Agreement. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net loss | $ (17,331) | $ (779) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared in conformity with U.S. GAAP. Any reference to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). FASB ASC Topic 205-40, P resentation of Financial Statements - Going Concern , requires Management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date. Management has performed this required assessment as of April 5, 2024, and believes there are sufficient funds available to support its ongoing business operations and continue as a going concern for at least the next 12 months with projected liquidity of $10.0 million at April 5, 2025. Management’s assessment is subject to known and unknown risks, uncertainties, assumptions, and changes in circumstances, many of which are beyond our control including the impact of the macroeconomic environment, and that are difficult to predict as to timing, extent, likelihood, and degree of occurrence, and that could cause actual results to differ from estimates and forecasts, potentially materially. Based upon the results of Management’s assessment, these consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements do not include any adjustments that could result from the outcome of the aforementioned risks and uncertainties. |
Consolidation Policy | Consolidation Policy |
Use of Estimates | Use of Estimates These financial statements reflect all normal and recurring adjustments that are, in the opinion of Management, necessary to present a fair statement of the financial position and the results of operations and cash flows of BMTX for the periods presented. The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include share-based compensation, provision for operating losses, valuation of deferred tax assets, valuation of the private warrants, internally developed software, and goodwill and other intangible asset impairment analysis. Actual results could differ from those estimates. |
Segment Reporting | Segment Reporting The Company conducts its operations through a single operating segment and, therefore, one reportable segment. Operating segments are revenue-generating components of a company for which separate financial information is internally produced for regular use by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess the performance of the business. Our CODM, Luvleen Sidhu, our Chief Executive Officer (“CEO”), uses a variety of measures to assess the performance of the business; however, detailed profitability information of the nature that could be used to allocate resources and assess the performance of the business are managed and reviewed for the Company as a whole. |
Customer and Vendor Concentrations | Customer and Vendor Concentrations At December 31, 2023 and December 31, 2022, Customers Bank accounted for 16% and 17% of our total Accounts receivable, net , respectively. At December 31, 2023 and December 31, 2022, a BaaS partner accounted for 48% and 60% of our total Accounts receivable, net, respectively. At December 31, 2023 and December 31, 2022, MasterCard accounted for 21% and 10% of our total Accounts receivable, net , respectively. For the twelve months ended December 31, 2023 and 2022, Customers Bank, through a Deposit Processing Services Agreement and Amendment thereof, accounted for 87% and 89% of our Total operating revenues , respectively. See Note 13 – Related Party Transactions for additional information. Certain of these revenues are paid directly by MasterCard or individual account holders to the Company. For the twelve months ended December 31, 2023 and 2022, there is one vendor that accounted for 11% and 12% of our Total operating expenses , respectively. |
Business Combinations | Business Combinations Business combinations are accounted for by applying the acquisition method in accordance with FASB ASC Topic 805, Business Combinations . Under the acquisition method, identifiable assets acquired and liabilities assumed are measured at their fair values as of the date of acquisition, and are recognized separately from goodwill. Results of operations of the acquired entity are included in the statement of income from the date of acquisition. BMTX recognizes goodwill when the acquisition price exceeds the estimated fair value of the net assets acquired. |
Cash and Cash Equivalents | Cash and Cash Equivalents Our cash is maintained at Customers Bank, with a large majority of our cash balances at December 31, 2023 exceeding the FDIC’s $250,000 insured limit per account. We have not experienced losses on cash balances exceeding the federally insured limits, but there can be no assurance that we will not experience such losses in the future. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily relate to billings for deposit processing services provided to our Partner Banks in addition to reimbursements to be received from a BaaS partner, as described in collaborative arrangements below, MasterCard incentive income, and uncollected university subscription and disbursement services fees. These amounts are recorded at face amounts less an allowance for doubtful accounts. Management evaluates accounts receivable and establishes the allowance for doubtful accounts based on historical experience, analysis of past due accounts, and other current available information. Accounts receivable deemed to be uncollectible are individually identified and are charged-off against the allowance for doubtful accounts. |
Premises and Equipment | Premises and Equipment Premises and equipment are recorded at cost less accumulated depreciation. Depreciation is charged to operations on a straight-line basis over the estimated useful lives of the assets or, in the case of leasehold improvements, the lease period, if shorter. Upon disposal or retirement of property and equipment, cost and related accumulated depreciation are removed from the accounts. Gains and losses from dispositions are credited or charged to operations. Expenditures for ordinary maintenance and repairs are charged to expense. Additions or betterments to property and equipment are capitalized at cost. The respective expenses are recorded in Technology, communication, and processing and Occupancy on the Consolidated Statements of Loss |
Developed Software | Developed Software Developed software includes internally developed software and developed software acquired in the Higher One Disbursement business acquisition. Internally developed software and related capitalized work-in-process costs relate to the development of our fintech digital banking platform. BMTX capitalizes certain internal and external costs incurred to develop internal-use software during the application development stage. BMTX also capitalizes the cost of specified upgrades and enhancements to internal-use software that result in additional functionality. Once a development project is substantially complete and the software is ready for its intended use, BMTX begins amortizing these costs on a straight-line basis over the internal-use software’s estimated useful life, which ranges from three Technology, communication, and processing on the Consolidated Statements of Loss. The Higher One Disbursement business developed software is related to the disbursement business services to colleges and universities and delivering services to students. The Higher One Disbursement business developed software was recorded at the amount determined by a third-party valuation expert at acquisition date and was estimated based on expected revenue attributable to the software utilizing a discounted cash flow methodology, giving consideration to potential obsolescence. The estimated useful life of the Higher One Disbursement business developed software is 10 years. Amortization expense is recorded in Technology, communication, and processing on the Consolidated Statements of Loss. At each reporting period, the Company performs an assessment to determine if any indicators of impairment are present. If indicators are present, the Company performs a recoverability test by measuring the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the Company determines that the carrying amount is impaired, the asset is written down to fair value. Fair value is determined based on discounted cash flows or Management’s estimates, depending on the nature of the assets. Developed software impairment expense for the twelve months ended December 31, 2023 and 2022 totaled $0.6 million and zero, respectively. Impairment expense is recorded in Technology, communication, and processing on the Consolidated Statements of Loss. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Goodwill represents the excess of the purchase price over the identifiable net assets of businesses acquired through business combinations accounted for under the acquisition method. Goodwill is reviewed for impairment annually as of October 31 and between annual tests when events and circumstances indicate that impairment may have occurred. A goodwill impairment charge represents the amount by which the reporting unit’s carrying amount exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. BMTX applies a qualitative assessment to determine if the Step 1 quantitative impairment test is necessary. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as university relationships, are subject to impairment testing. Intangible assets are amortized on a straight-line basis over twenty years. Other intangibles subject to amortization are reviewed for impairment under FASB ASC Topic 360, Property, Plant and Equipment , which requires that a long-lived asset or asset group be tested for recoverability whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the Company determines that the carrying amount is impaired, the asset is written down to fair value. Fair value is determined based on discounted cash flows or Management’s estimates, depending on the nature of the assets. As part of its quantitative and qualitative assessment, BMTX reviews regional and national trends in current and expected economic conditions. BMTX also considers its own historical performance, expectations of future performance, indicative deal values, and other trends specific to its industry. Based on its quantitative and qualitative assessment, BMTX determined that there was no evidence of impairment of the balance of goodwill or other intangible assets. As of December 31, 2023 and 2022, Goodwill was $5.3 million and Other intangibles, net was $4.1 million and $4.4 million, respectively. |
Leases | Leases BMTX enters into lease agreements primarily for the use of office space, all which are classified as operating leases. At lease commencement date, BMTX recognizes right-of-use (“ROU”) assets and lease liabilities measured at the present value of lease payments over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease expense for rental payments are recognized on a straight-line basis over the lease term and are included in Occupancy. In addition to rent, BMTX pays taxes and maintenance expenses, including an annual increase in operating expenses over the initial year’s expenses under certain leases as variable lease payments. For the twelve months ended December 31, 2023, the Company had one month to month short term office lease that qualified for the short-term lease exemption under FASB ASC Topic 842, Leases . and as such, did not require capitalization as a right of use asset or lease liability. |
Deferred Revenue and Revenue Recognition | Deferred Revenue Deferred revenue consists of payments received from customers, most significantly from its Partner Banks, prior to the performance of services. Deferred revenue is recognized over the service period on a straight-line basis or when the contractual performance obligation has been satisfied. The Company classifies deferred revenue on the Consolidated Balance Sheets in Deferred revenue, current and Deferred revenue, non-current. Revenue Recognition BMTX’s revenues from interchange and card revenue, servicing fees, account fees, and university fees are within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers . The Company recognizes revenue in accordance with FASB ASC Topic 606 when the performance obligations related to the transfer of services under the terms of a contract are satisfied. Some obligations are satisfied at a point in time while others are satisfied over a period of time. Revenue is recognized as the amount of consideration to which the Company expects to be entitled to in exchange for transferring services to a customer. The Company’s customer contracts do not contain terms that require significant judgment to determine the variability impacting the transaction price. A performance obligation is deemed satisfied when the control over services is transferred to the customer. Control is transferred to a customer either at a point in time or over time. To determine when control is transferred at a point in time, the Company considers indicators, including but not limited to, the right to payment, transfer of significant risk and rewards of ownership, and acceptance by the customer. When control is transferred over a period of time, the output method is used to measure progress for the transfer. The measure of progress used to assess completion of the performance obligation is based on time over the period of service. We assess our revenue arrangements against specific criteria in order to determine if we are acting as principal or agent. The Company determined that it is the agent in contracts for interchange and card revenue, and presents these revenues net of related expenses under FASB ASC Topic 606. Interchange and card revenue Interchange fees are earned whenever debit cards serviced by BMTX are processed through card payment networks. Interchange fees are recognized concurrent with the processing of the card transaction. Card revenue includes foreign ATM fees and MasterCard incentive income. ATM fees are recognized when the fee is deducted from the serviced account; MasterCard incentive income is primarily tied to debit spend volume and is recognized concurrent with spend. Servicing fees BMTX sources and services deposit accounts for its Partner Banks, and in exchange, is paid servicing fees. Servicing fees and terms are established by individually negotiated contractual agreements. A rate is applied to the daily average deposit balances. In all periods, servicing fees are recognized monthly based on average daily balances. Account fees BMTX earns account fees on BMTX serviced deposit accounts for transaction-based, account maintenance services. Account maintenance fees, which relate primarily to monthly maintenance fees for BMTX serviced accounts that do not meet minimum deposit balance requirements, are earned on a monthly basis representing the period over which BMTX satisfies its performance obligation. Transaction-based fees, which include services such as wire transfer fees, card replacement, and cash deposit via Green Dot network fees, are recognized at the time the transaction is completed. Service charges on deposit accounts are withdrawn from the depositor’s account balance. University fees BMTX earns university fees from Higher Education clients in exchange for financial aid and other student refund disbursement services provided. BMTX facilitates the distribution of financial aid and other refunds to students, while simultaneously enhancing the ability of the higher education institutions to comply with the federal regulations applicable to financial aid transactions. For these services, Higher Education institution clients are charged an annual subscription fee and/or per-transaction fees (e.g., check issuance, new card, card replacement fees) for certain transactions. The annual subscription fee is recognized ratably over the period of service using the output method and the transaction fees are recognized when the transaction is completed. BMTX typically enters into long-term (generally three or five-year initial term) contracts with Higher Education institutions to provide these refund management disbursement services. |
Public & Private Warrants | Public & Private Warrants The Company has public and private warrants outstanding as a result of the merger transaction with Megalith that occurred on January 4, 2021. Each warrant entitles the registered holder to purchase one whole share of common stock at a price of $11.50 a share. The warrants expire January 4, 2026, or earlier upon redemption or liquidation and the Company has redemption rights if our common stock trades above $24.00 for 20 out of 30 days. The private warrants are identical to the public warrants except that the private warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the sponsor and certain others. The private warrants and the public warrants are treated differently for accounting purposes. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the private warrants are accounted for as liabilities and are marked-to-market each reporting period with the change recognized in earnings. In general, under the mark-to-market accounting model, as the Company’s stock price increases, the warrant liability increases, and the Company recognizes additional expense in its Consolidated Statements of Loss – the opposite when the stock price declines. Accordingly, the periodic revaluation of the private warrants could result in significant volatility in reported earnings. For the twelve months ended December 31, 2023 and 2022, respectively, the Company recognized non-cash gains of $2.7 million and $8.1 million related to the mark-to-market accounting on its private warrants. In accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity, the public warrants are treated as equity instruments. Accordingly, the public warrants are not marked-to-market each reporting period, thus there is no impact to earnings. Any future exercises of the public warrants will be recorded as cash received and recorded in Cash and cash equivalents , with a corresponding offset to Additional paid-in capital in equity. |
Income Taxes | Income Taxes BMTX accounts for income taxes under the liability method of accounting for income taxes. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. BMTX determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. In assessing the realizability of federal or state deferred tax assets, Management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and prudent, feasible, and permissible as well as available tax planning strategies in making this assessment. A tax position is recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the term upon examination includes resolution of the related appeals or litigation process. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to Management’s judgment. |
Loss Contingencies | Loss Contingencies In the ordinary course of business, the Company is regularly subject to various claims, suits, regulatory inquiries, and investigations. The Company records a liability for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable, and the loss can be reasonably estimated. Management has also identified certain other legal matters where they believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the Company’s business, financial position, results of operations, or cash flows, these matters are subject to inherent uncertainties and Management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. |
Advertising and Promotion | Advertising and Promotion Advertising and promotion costs are expensed as incurred. |
Collaborative Arrangements | Collaborative Arrangements In the normal course of business, BMTX may enter into collaborative arrangements primarily to develop and commercialize banking products to its BaaS partners’ customers. Collaborative arrangements are contractual agreements with third-parties that involve a joint operating activity where both BMTX and the collaborating BaaS partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Collaborative activities typically include research and development, technology, product development, marketing, and day-to-day operations of the banking product. These agreements create contractual rights and do not represent an entity in which we have an equity interest. BMTX accounts for its rights and obligations under the specific requirements of the contracts. These arrangements often require the sharing of revenue and expense. BMTX’s expenses incurred pursuant to these arrangements are reported net of any payments due to or amounts due from BMTX’s BaaS partner, which are recognized at the time the BaaS partner becomes obligated to pay. For the twelve months ended December 31, 2023 and 2022, BMTX recognized fee sharing from its BaaS partners of $3.9 million and $7.5 million, respectively, from collaborative arrangements. These net proceeds include $(1.0) million and $1.4 million, respectively, in revenues (contra-revenues), recorded in Other revenue, Interchange and card revenue, and Servicing fees on the Consolidated Statements of Loss and $4.9 million and $6.1 million, respectively, in expense reimbursements, recorded in Technology, communication and processing, Salaries and employee benefits, and Professional services on the Consolidated Statements of Loss . |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company uses share-based compensation, including stock, restricted stock units, and performance stock units, to provide long-term performance incentives for its employees and directors. Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on the grant-date fair value for service-based awards. Compensation related to performance-based awards is recognized over the period the performance obligation is expected to be satisfied. For compensation related to performance-based awards with milestones, upon the grant date, and at each subsequent reporting period, we reassess whether it is probable that we will achieve each operational milestone, and if so, the period when we expect to achieve that operational milestone. For compensation related to performance-based awards with a market condition, we use a Monte Carlo simulation to determine the fair value of the award on the grant date, and recognize the share-based compensation expense over the derived service period. Forfeitures are recognized as they occur. Share-based compensation expense is included in Salaries and employee benefits . In addition, holders of shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations. 401(k) Plan On January 3, 2023, the Company implemented the BM Technologies, Inc. 401(k) Plan (the “401(k) Plan”) for the benefit of BMTX’s eligible employees. The 401(k) Plan permits eligible employees to make voluntary contributions combined with employer contributions, up to a maximum of $63.5 thousand per year, subject to certain limitations. The Company offers a matching contribution equal to 50% of an eligible employee’s deferral election up to 3% of their annual salary. The Company records its contributions to the 401(k) Plan in Salaries and employee benefits on the Consolidated Statements of Loss . The Company’s employer contribution to the 401(k) Plan for the twelve months ended December 31, 2023 totaled $0.6 million. |
Provision for Operating Losses | Provision for Operating Losses The provision for operating losses represents BMTX’s obligation for losses resulting from fraud transactions that have generally been disputed by our serviced deposit account holders, Regulation E card claim losses incurred by us, an estimated liability for fraud and Regulation E losses where such disputes have not been resolved as of the end of the reporting period, a provision for overdrawn serviced deposit accounts for which we are responsible, net of any related recoveries. Fraud losses are recognized when realized or incurred. The main source of Regulation E losses is card holder claims of unauthorized use of their debit card. BMTX’s loss includes closed disputes where the customer is entitled to keep the funds advanced, an expected loss on actual disputes that are pending investigation, which is based on historical experience, as well as an estimate of disputes incurred, but not yet disputed. The estimated liability for disputes incurred, but not yet disputed is determined by analyzing historical rates of transactions disputed and applying that experience rate to actual debit card volume in the period. This estimate of future disputes is then adjusted for our estimate of the amount disputed that we expect to result in a loss, which is estimated based on our historical experience. The estimated liability totaled $1.3 million and $0.4 million as of December 31, 2023 and 2022, respectively; the changes period over period are presented within Provision for Operating Losses on the Consolidated Statements of Loss . |
Restructuring, Merger and Acquisition Related Expenses | Restructuring, Merger and Acquisition Related Expenses In connection with the Company’s Profit Enhancement Plan (the “PEP”), and previous unconsummated merger, BMTX incurred $0.9 million and $0.3 million in merger and acquisition expenses for the twelve months ended December 31, 2023 and 2022, respectively, which are recorded within Restructuring, merger and acquisition related expenses on the Consolidated Statements of Loss |
Recently Adopted Accounting Standards and Accounting Pronouncements Issued But Not Yet Adopted | Recently Adopted Accounting Standards As of December 31, 2023, there were no recently adopted accounting standards that had a material impact on the Company’s consolidated financial statements and related disclosures. Accounting Standards Issued but Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB that are adopted by BMTX as of the required effective dates. ASUs not listed below were assessed and determined to be either not applicable or to not have a material impact on BMTX’s financial statements taken as a whole. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in FASB ASC Topic 470-20, Debt: Debt with Conversion and Other Options , that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in FASB ASC Topic 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in FASB ASC Topic 260, Earnings Per Share , to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted earnings per share when an instrument may be settled in cash or shares. As a smaller reporting company, ASU 2020-06 is effective for BMTX for fiscal years beginning after December 15, 2023. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has determined that ASU 2020-06 will not have a material impact on its consolidated financial statements and related disclosure. In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Allowance for Doubtful Accounts | (amounts in thousands) Beginning Balance Additions Reductions Ending Balance Allowance for doubtful accounts Twelve months ended December 31, 2022 $ 79 $ 381 $ (155) $ 305 Twelve months ended December 31, 2023 $ 305 $ 1,001 $ (206) $ 1,100 |
PREMISES AND EQUIPMENT AND DE_2
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Components of Premises and Equipment and Developed Software | The components of premises and equipment were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, IT equipment 3 to 5 years $ 930 $ 1,377 Accumulated depreciation (395) (869) Total $ 535 $ 508 The components of developed software were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, Higher One Disbursement business developed software 10 years $ 27,400 $ 27,400 Internally developed software 3 to 7 years 43,225 42,504 Work-in-process 6,662 3,077 77,287 72,981 Accumulated amortization (61,114) (50,657) Total $ 16,173 $ 22,324 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Other Intangibles | The components of Other intangibles, net as of December 31, 2023 and 2022 were as follows: (amounts in thousands) Expected Useful Life December 31, December 31, Customer relationships – universities 20 years $ 6,402 $ 6,402 Accumulated amortization (2,293) (1,973) Total $ 4,109 $ 4,429 |
Schedule of Future Amortization | The customer relationships - universities will be amortized in future periods as follows: 2024 $ 320 2025 320 2026 320 2027 320 After 2027 2,829 Total $ 4,109 |
SHAREHOLDERS' EQUITY AND PRIV_2
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Summary of Change in Unvested Awards | The change in unvested shares under the January 4, 2021 Share-Based Compensation Award is shown below: Number of Awards Weighted-Average Grant-Date Fair Value Per Award Balance as of December 31, 2021 1,283,535 $ 14.87 Granted — $ 14.87 Vested (88,889) $ 14.87 Forfeited (26,500) $ 14.87 Balance as of December 31, 2022 1,168,146 $ 14.87 Granted — $ — Vested (749,854) $ 14.87 Net settlement of share-based awards for taxes (418,292) $ 14.87 Balance as of December 31, 2023 — $ — |
Summary of Change in Unvested RSUs | The change in unvested RSUs and PBRSUs awarded is shown below: Restricted Stock Units Performance-Based Restricted Stock Units Number of RSUs Weighted-Average Grant-Date Fair Value Per RSU Number of RSUs Weighted-Average Grant-Date Fair Value Per RSU Balance as of December 31, 2021 357,100 $ 8.99 347,500 $ 7.09 Granted 85,540 $ 7.87 — $ — Vested (93,275) $ 9.10 — $ — Forfeited (24,575) $ 9.79 (12,500) $ 7.09 Balance as of December 31, 2022 324,790 $ 8.84 335,000 $ 7.09 Granted 719,690 $ 3.13 455,000 $ 2.94 Vested (287,470) $ 4.62 — $ — Forfeited (311,904) $ 4.19 (295,000) $ 3.57 Balance as of December 31, 2023 445,106 $ 6.47 495,000 $ 2.99 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The Company has one reportable segment and all revenues are earned in the U.S. Twelve Months Ended (amounts in thousands) 2023 2022 Revenues: Revenue recognized at point in time: Interchange and card revenue $ 9,447 $ 22,318 Servicing fees 31,460 44,581 Account fees 8,099 8,992 University fees - disbursement activity 881 1,108 Other revenue 202 1,720 Total revenue recognized at point in time 50,089 78,719 Revenue recognized over time: University fees - subscriptions 4,820 4,626 Other revenue - maintenance and support 343 252 Total revenue recognized over time 5,163 4,878 Total revenues $ 55,252 $ 83,597 |
Schedule of Deferred Revenue Balances | The deferred revenue balances were as follows: December 31, (amounts in thousands) 2023 2022 Deferred revenue $ 12,449 $ 6,647 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows: Twelve Months Ended (amounts in thousands) 2023 2022 Current expense (benefit) Federal $ — $ (423) State 16 12 Total current expense (benefit) $ 16 $ (411) Deferred expense (benefit) Federal $ (4,357) $ (296) State (383) 8 Change in valuation allowance 4,740 288 Total deferred expense (benefit) $ — $ — Total income tax expense (benefit) $ 16 $ (411) |
Schedule of Effective Income Tax Rate Reconciliation | Effective tax rates differ from the federal statutory rate of 21% due to the following: Twelve months ended December 31, 2023 2022 (amounts in thousands) Amount % of pretax loss Amount % of pretax loss Federal income tax at statutory rate $ (3,636) 21.00 % $ (250) 21.00 % State taxes, net of federal benefit 490 (2.83) % (457) 38.48 % Change in fair value of warrant liabilities (560) 3.23 % (1,694) 142.51 % Change in valuation allowance 4,740 (27.38) % 288 (24.23) % Nondeductible compensation 5 (0.03) % 2,183 (183.64) % Tax credits (1,023) 5.91 % (545) 45.86 % Other (1) 0.01 % 64 (5.39) % Total $ 16 (0.09) % $ (411) 34.59 % |
Schedule of Deferred Tax Assets and Liabilities | The following represents the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022: (amounts in thousands) December 31, 2023 December 31, 2022 Deferred tax assets: Section 197 Intangibles $ 27,164 $ 27,794 Nondeductible compensation 752 2,005 Accrued bonuses 63 162 Tax credits 1,022 — Other 5,832 385 Less: Valuation Allowance (34,690) (29,950) Total deferred tax assets $ 143 $ 396 Deferred tax liabilities Depreciation (90) (340) Capitalized costs (53) (56) Total deferred tax liabilities $ (143) $ (396) Net deferred tax asset (liability) $ — $ — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Components and Results of Operations and Earnings (Loss) Per Common Share Calculations | The following are the components and results of operations and loss per common share calculations for the periods presented: Twelve Months Ended (amounts in thousands, except share and per share data) 2023 2022 Net loss available to common shareholders $ (17,331) $ (779) Net loss used for EPS $ (17,331) $ (779) Weighted-average number of common shares outstanding – basic 11,574 11,942 Weighted-average number of common shares outstanding – diluted 11,574 11,942 Basic loss per common share $ (1.50) $ (0.07) Diluted loss per common share $ (1.50) $ (0.07) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock: Twelve Months Ended (amounts in thousands) 2023 2022 Performance based shares 300 300 Public warrants 17,294 17,227 Private warrants 5,409 5,476 Performance-based RSUs 495 335 Service-based RSUs 445 309 Total 23,943 23,647 |
DISCLOSURES ABOUT FAIR VALUE _2
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Estimated Fair Values of Financial Instruments | The estimated fair value of BMTX’s financial instruments at December 31, 2023 and December 31, 2022 were as follows: Fair Value Measurements at December 31, 2023 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 14,288 $ 14,288 $ 14,288 $ — $ — Accounts receivable, net 9,128 9,128 9,128 — — Liabilities: Liability for private warrants $ 162 $ 162 $ — $ — $ 162 Fair Value Measurements at December 31, 2022 (amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 21,108 $ 21,108 $ 21,108 $ — $ — Accounts receivable, net 8,260 8,260 8,260 — — Liabilities: Liability for private warrants $ 2,847 $ 2,847 $ — $ — $ 2,847 |
DESCRIPTION OF THE BUSINESS - N
DESCRIPTION OF THE BUSINESS - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 revenue_source | |
Business Description And Reverse Recapitalization [Abstract] | |
Number of primary revenue sources | 4 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) | 1 Months Ended | 12 Months Ended | ||
Jan. 03, 2023 USD ($) | Apr. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) segment trading_day $ / shares | Dec. 31, 2022 USD ($) | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Impairment recognized | $ 600,000 | $ 0 | ||
Intangible asset amortization period | 20 years | |||
Goodwill | $ 5,259,000 | 5,259,000 | ||
Other intangibles, net | $ 4,109,000 | 4,429,000 | ||
Exercise price (in dollars per share) | $ / shares | $ 11.50 | |||
Redemption rights, stock price trigger (in dollars per share) | $ / shares | $ 24 | |||
Redemption rights, threshold trading days | trading_day | 20 | |||
Redemption rights, threshold trading day period | trading_day | 30 | |||
Gain on fair value of private warrant liability | $ 2,665,000 | 8,066,000 | ||
Collaborative arrangements | 3,900,000 | 7,500,000 | ||
Defined contribution plan, maximum annual contributions per employee, amount | $ 63,500 | |||
Employer matching contribution, percent of match | 50% | |||
Employer matching contribution, percent of eligible compensation | 3% | |||
401(k) matching contributions | 600,000 | |||
Estimated exposure | 1,300,000 | 400,000 | ||
Restructuring, merger, and acquisition related expenses | 937,000 | 290,000 | ||
Forecast | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Projected liquidity of ongoing project | $ 10,000,000 | |||
Other revenue and Interchange and card revenue | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Collaborative arrangements | $ (1,000,000) | $ 1,400,000 | ||
Collaborative Arrangement, Revenue Not from Contract with Customer, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total operating revenues | Total operating revenues | ||
Salaries and employee benefits and Professional services | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Collaborative arrangements | $ 4,900,000 | $ 6,100,000 | ||
Collaborative Arrangement, Revenue Not from Contract with Customer, Statement of Income or Comprehensive Income [Extensible Enumeration] | Salaries and employee benefits, Professional services | Salaries and employee benefits, Professional services | ||
Higher One Disbursement business developed software | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Expected useful life (in years) | 10 years | |||
Intangible asset amortization period | 10 years | |||
Minimum | Internally developed software | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Expected useful life (in years) | 3 years | |||
Intangible asset amortization period | 3 years | |||
Maximum | Internally developed software | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Expected useful life (in years) | 7 years | |||
Intangible asset amortization period | 7 years | |||
Operating Expense | Supplier Concentration Risk | Top Supplier One | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Concentration risk | 11% | 12% | ||
Partner Bank | Accounts Receivable | Customer Concentration Risk | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Concentration risk | 16% | 17% | ||
Partner Bank | Operating Revenue | Customer Concentration Risk | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Concentration risk | 87% | 89% | ||
BaaS Partner | Accounts Receivable | Customer Concentration Risk | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Concentration risk | 48% | 60% | ||
MasterCard | Accounts Receivable | Customer Concentration Risk | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Concentration risk | 21% | 10% |
ACCOUNTS RECEIVABLE - Narrative
ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | |||
Allowance for doubtful accounts | $ 1,100 | $ 305 | $ 79 |
ACCOUNTS RECEIVABLE - Schedule
ACCOUNTS RECEIVABLE - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Allowance for doubtful accounts | ||
Beginning Balance | $ 305 | $ 79 |
Additions | 1,001 | 381 |
Reductions | (206) | (155) |
Ending Balance | $ 1,100 | $ 305 |
PREMISES AND EQUIPMENT AND DE_3
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Accumulated depreciation | $ (395) | $ (869) |
Total | 535 | 508 |
Depreciation expense | 265 | 298 |
IT equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 930 | $ 1,377 |
IT equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Expected useful life (in years) | 3 years | |
IT equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Expected useful life (in years) | 5 years |
PREMISES AND EQUIPMENT AND DE_4
PREMISES AND EQUIPMENT AND DEVELOPED SOFTWARE - Developed Software (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Developed software, gross | $ 77,287 | $ 72,981 |
Accumulated amortization | (61,114) | (50,657) |
Total | 16,173 | 22,324 |
Amortization of developed software | 11,591 | 11,445 |
Impairment recognized | $ 600 | 0 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Technology, communication, and processing | |
Higher One Disbursement business developed software | ||
Property, Plant and Equipment [Line Items] | ||
Expected useful life (in years) | 10 years | |
Developed software, gross | $ 27,400 | 27,400 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Developed software, gross | $ 43,225 | 42,504 |
Internally developed software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Expected useful life (in years) | 3 years | |
Internally developed software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Expected useful life (in years) | 7 years | |
Work-in-process | ||
Property, Plant and Equipment [Line Items] | ||
Developed software, gross | $ 6,662 | $ 3,077 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset amortization period | 20 years | |
Goodwill impairment | $ 0 | $ 0 |
Amortization expense | 320,000 | 320,000 |
Impairment of intangible assets | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Components of Other Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Expected useful life (in years) | 20 years | |
Accumulated amortization | $ (2,293) | $ (1,973) |
Total | $ 4,109 | 4,429 |
Customer relationships – universities | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Expected useful life (in years) | 20 years | |
Other intangibles, gross | $ 6,402 | $ 6,402 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Future Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 320 | |
2025 | 320 | |
2026 | 320 | |
2027 | 320 | |
After 2027 | 2,829 | |
Total | $ 4,109 | $ 4,429 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 01, 2022 | Mar. 31, 2022 location | Jan. 01, 2022 location | |
Leases [Abstract] | |||||
Number of office space locations leased under operating leases | location | 2 | 2 | |||
Number of office space locations matured under operating leases | location | 1 | ||||
Operating lease terms (in years) | 3 months | 3 months | |||
Lease expenses related to operating leases | $ | $ 0.1 | $ 0.5 | |||
Operating lease cash payments | $ | $ 0 | $ 0.4 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Jun. 05, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase obligation | $ 0.5 | $ 0.1 |
Purchase obligation, to be paid, year one | 0.5 | |
Purchase obligation, to be paid, year two | 0.5 | |
Purchase obligation, to be paid, year three | $ 0.5 |
SHAREHOLDERS' EQUITY AND PRIV_3
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2023 USD ($) installment vote $ / shares shares | Jun. 20, 2023 shares | Mar. 01, 2022 USD ($) | Jan. 04, 2021 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) trading_day vote installment $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Jun. 19, 2023 shares | |
Class of Warrant or Right [Line Items] | |||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares outstanding (in shares) | 11,984,133 | 11,984,133 | 12,240,237 | ||||
Common stock, shares issued (in shares) | 11,984,133 | 11,984,133 | 12,240,237 | ||||
Performance shares (in shares) | 300,000 | 300,000 | |||||
Number of votes for each share held | vote | 1,000 | 1,000 | |||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||||
Performance shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Performance shares, period post closing date of merger after which shares would be forfeited and cancelled if no Release Event has occurred | 7 years | ||||||
Performance shares, stock price trigger (in dollars per share) | $ / shares | $ 15 | $ 15 | |||||
Performance shares, threshold trading days | trading_day | 20 | ||||||
Performance shares, threshold trading day period | trading_day | 30 | ||||||
Number of additional shares authorized (in shares) | 1,279,963 | ||||||
Number of shares authorized (in shares) | 2,500,000 | 1,220,037 | |||||
Service period | 5 years | ||||||
Warrants to purchase common stock outstanding (in shares) | 22,703,004,000 | 22,703,004,000 | |||||
Number of whole shares of common stock entitled to purchase upon exercise of each whole warrant ( in shares) | 1 | 1 | |||||
Exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||
Maximum expiration period after completion of merger (in years) | 5 years | ||||||
Redemption rights, stock price trigger (in dollars per share) | $ / shares | $ 24 | $ 24 | |||||
Redemption rights, threshold trading days | trading_day | 20 | ||||||
Redemption rights, threshold trading day period | trading_day | 30 | ||||||
Reclassified warrants (in shares) | 66,855 | 300,000 | |||||
Liability for private warrants | $ | $ 162 | $ 162 | $ 2,847 | ||||
Gain on fair value of private warrant liability | $ | (2,665) | (8,066) | |||||
Cash consideration | $ | 0 | 1,977 | |||||
Proceeds from exercise of warrants | $ | $ 0 | $ 1 | |||||
Merger Consideration Share Based Compensation Award | |||||||
Class of Warrant or Right [Line Items] | |||||||
Granted (in shares) | 1,317,035 | 0 | 0 | ||||
Vesting period | 2 years | ||||||
Share-based compensation expense | $ | $ 100 | $ 9,200 | |||||
Merger Consideration Share Based Compensation Award | Revision of Prior Period, Error Correction, Adjustment | |||||||
Class of Warrant or Right [Line Items] | |||||||
Fair value | $ | $ 19,600 | ||||||
Restricted Stock Units (RSUs) | |||||||
Class of Warrant or Right [Line Items] | |||||||
Granted (in shares) | 719,690 | 85,540 | |||||
Share-based compensation expense | $ | $ 1,300 | $ 1,000 | |||||
Unrecognized compensation expense | $ | $ 1,500 | $ 1,500 | |||||
Period for recognition | 1 year 11 months 1 day | ||||||
Restricted Stock Units (RSUs) | Minimum | |||||||
Class of Warrant or Right [Line Items] | |||||||
Vesting installments | installment | 3 | 3 | |||||
Restricted Stock Units (RSUs) | Maximum | |||||||
Class of Warrant or Right [Line Items] | |||||||
Vesting installments | installment | 4 | 4 | |||||
Performance Based Restricted Stock Units | |||||||
Class of Warrant or Right [Line Items] | |||||||
Granted (in shares) | 455,000 | 0 | |||||
Share-based compensation expense | $ | $ 500 | $ 1,000 | |||||
Unrecognized compensation expense | $ | $ 900 | $ 900 | |||||
Period for recognition | 1 year 10 months 24 days | ||||||
Public warrants | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrants to purchase common stock outstanding (in shares) | 17,294,044,000 | 17,294,044,000 | 17,227,189,000 | ||||
Outstanding warrants exercised (in shares) | 1,600 | 0 | 100 | ||||
Proceeds from exercise of warrants | $ | $ 100 | $ 100 | |||||
Private warrants | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrants to purchase common stock outstanding (in shares) | 5,408,960,000 | 5,408,960,000 | 5,475,815,000 | ||||
Outstanding warrants repurchased (in shares) | 1,169,963 | 1,169,963 | |||||
Repurchase price (in dollars per share) | $ / shares | $ 1.69 | $ 1.69 | |||||
Liability for private warrants | $ | $ 30,800 | ||||||
Fair value assumptions, expected term (in years) | 5 years | 2 years 7 days | 3 years 3 days | ||||
Fair value assumptions, volatility rate (as a percent) | 20% | 58% | 43% | ||||
Fair value assumptions, dividend yield | 0% | 0% | 0% | ||||
Fair value assumptions, underlying stock price (in dollars per share) | $ / shares | 2.05 | $ 14.76 | $ 2.05 | $ 5.21 | |||
Fair value assumptions, risk free interest rate (as a percent) | 0.38% | 4.18% | 4.17% | ||||
Fair value assumptions, exercise price, closing price of Public Warrants (in dollars per share) | $ / shares | $ 0.03 | $ 2.50 | $ 0.03 | $ 0.52 | |||
Gain on fair value of private warrant liability | $ | $ (2,700) | $ (8,100) | |||||
Cash consideration | $ | $ 2,000 | $ 2,000 | |||||
Director | |||||||
Class of Warrant or Right [Line Items] | |||||||
Shares issued per director (in shares) | 0 | 1,000 | |||||
Issuance of common stock (in shares) | 0 | 6,000 | |||||
Share-based compensation expense | $ | $ 0 | $ 100 |
SHAREHOLDERS' EQUITY AND PRIV_4
SHAREHOLDERS' EQUITY AND PRIVATE WARRANT LIABILITY - Summary of Change in Unvested Awards and RSUs (Details) - $ / shares | 12 Months Ended | ||
Jan. 04, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Merger Consideration Share Based Compensation Award | |||
Number of Awards | |||
Beginning balance (in shares) | 1,168,146 | 1,283,535 | |
Granted (in shares) | 1,317,035 | 0 | 0 |
Vested (in shares) | (749,854) | (88,889) | |
Forfeited (in shares) | (418,292) | (26,500) | |
Ending balance (in shares) | 0 | 1,168,146 | |
Weighted-Average Grant-Date Fair Value Per Award | |||
Beginning balance (in dollars per share) | $ 14.87 | $ 14.87 | |
Granted (in dollars per share) | 0 | 14.87 | |
Vested (in dollars per share) | 14.87 | 14.87 | |
Forfeited (in dollars per share) | 14.87 | 14.87 | |
Ending balance (in dollars per share) | $ 0 | $ 14.87 | |
Restricted Stock Units (RSUs) | |||
Number of Awards | |||
Beginning balance (in shares) | 324,790 | 357,100 | |
Granted (in shares) | 719,690 | 85,540 | |
Vested (in shares) | (287,470) | (93,275) | |
Forfeited (in shares) | (311,904) | (24,575) | |
Ending balance (in shares) | 445,106 | 324,790 | |
Weighted-Average Grant-Date Fair Value Per Award | |||
Beginning balance (in dollars per share) | $ 8.84 | $ 8.99 | |
Granted (in dollars per share) | 3.13 | 7.87 | |
Vested (in dollars per share) | 4.62 | 9.10 | |
Forfeited (in dollars per share) | 4.19 | 9.79 | |
Ending balance (in dollars per share) | $ 6.47 | $ 8.84 | |
Performance Based Restricted Stock Units | |||
Number of Awards | |||
Beginning balance (in shares) | 335,000 | 347,500 | |
Granted (in shares) | 455,000 | 0 | |
Vested (in shares) | 0 | 0 | |
Forfeited (in shares) | (295,000) | (12,500) | |
Ending balance (in shares) | 495,000 | 335,000 | |
Weighted-Average Grant-Date Fair Value Per Award | |||
Beginning balance (in dollars per share) | $ 7.09 | $ 7.09 | |
Granted (in dollars per share) | 2.94 | 0 | |
Vested (in dollars per share) | 0 | 0 | |
Forfeited (in dollars per share) | 3.57 | 7.09 | |
Ending balance (in dollars per share) | $ 2.99 | $ 7.09 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of reportable segments | segment | 1 | |
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | $ 55,252 | $ 83,597 |
Interchange and card revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 9,447 | 22,318 |
Servicing fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 31,460 | 44,581 |
Account fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 8,099 | 8,992 |
University fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 5,701 | 5,734 |
Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 545 | 1,972 |
Revenue recognized at point in time: | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 50,089 | 78,719 |
Revenue recognized at point in time: | Interchange and card revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 9,447 | 22,318 |
Revenue recognized at point in time: | Servicing fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 31,460 | 44,581 |
Revenue recognized at point in time: | Account fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 8,099 | 8,992 |
Revenue recognized at point in time: | University fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 881 | 1,108 |
Revenue recognized at point in time: | Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 202 | 1,720 |
Revenue recognized over time: | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 5,163 | 4,878 |
Revenue recognized over time: | University fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | 4,820 | 4,626 |
Revenue recognized over time: | Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenues | $ 343 | $ 252 |
REVENUES - Deferred Revenue Bal
REVENUES - Deferred Revenue Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Change in Contract with Customer, Liability [Abstract] | ||
Deferred revenue | $ 12,449 | $ 6,647 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Amount recognized in the period from amounts included in deferred revenue at beginning of period | $ 6.6 | $ 15.4 |
Unbilled receivables | $ 1.5 | $ 2.6 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current expense (benefit) | ||
Federal | $ 0 | $ (423) |
State | 16 | 12 |
Total current expense (benefit) | 16 | (411) |
Deferred expense (benefit) | ||
Federal | (4,357) | (296) |
State | (383) | 8 |
Change in valuation allowance | 4,740 | 288 |
Total deferred expense (benefit) | 0 | 0 |
Income tax expense (benefit) | $ 16 | $ (411) |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Amount | ||
Federal income tax at statutory rate | $ (3,636) | $ (250) |
State taxes, net of federal benefit | 490 | (457) |
Change in fair value of warrant liabilities | (560) | (1,694) |
Change in valuation allowance | 4,740 | 288 |
Nondeductible compensation | 5 | 2,183 |
Tax credits | (1,023) | (545) |
Other | (1) | 64 |
Income tax expense (benefit) | $ 16 | $ (411) |
% of pretax loss | ||
Federal income tax at statutory rate | 21% | 21% |
State taxes, net of federal benefit | (2.83%) | 38.48% |
Change in fair value of warrant liabilities | 3.23% | 142.51% |
Change in valuation allowance | (27.38%) | (24.23%) |
Nondeductible compensation | (0.03%) | (183.64%) |
Tax credits | 5.91% | 45.86% |
Other | 0.01% | (5.39%) |
Total | (0.09%) | 34.59% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Interest and penalties on unrecognized tax benefits | 0.1 | 0.1 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 18.5 | 0.3 |
Credit carryforwards | 0.9 | |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 19.1 | $ 0.3 |
Credit carryforwards | $ 0.1 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Section 197 Intangibles | $ 27,164 | $ 27,794 |
Nondeductible compensation | 752 | 2,005 |
Accrued bonuses | 63 | 162 |
Tax credits | 1,022 | 0 |
Other | 5,832 | 385 |
Less: Valuation Allowance | (34,690) | (29,950) |
Total deferred tax assets | 143 | 396 |
Deferred tax liabilities | ||
Depreciation | (90) | (340) |
Capitalized costs | (53) | (56) |
Total deferred tax liabilities | (143) | (396) |
Net deferred tax asset (liability) | $ 0 | $ 0 |
LOSS PER SHARE - Components and
LOSS PER SHARE - Components and Results of Operations and Earnings (Loss) Per Common Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss available to common shareholders | $ (17,331) | $ (779) |
Net loss used for EPS | $ (17,331) | $ (779) |
Weighted-average number of common shares outstanding – basic (in shares) | 11,574 | 11,942 |
Weighted-average number of common shares outstanding – diluted (in shares) | 11,574 | 11,942 |
Basic loss per common share (in dollars per share) | $ (1.50) | $ (0.07) |
Diluted loss per common share (in dollars per share) | $ (1.50) | $ (0.07) |
LOSS PER SHARE - Antidilutive S
LOSS PER SHARE - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 23,943 | 23,647 |
Performance based shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 300 | 300 |
Public warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 17,294 | 17,227 |
Private warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 5,409 | 5,476 |
Performance-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 495 | 335 |
Service-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 445 | 309 |
DISCLOSURES ABOUT FAIR VALUE _3
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - Private warrants - $ / shares | 12 Months Ended | ||
Jan. 04, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||
Fair value assumptions, expected term (in years) | 5 years | 2 years 7 days | 3 years 3 days |
Fair value assumptions, volatility rate (as a percent) | 20% | 58% | 43% |
Fair value assumptions, dividend yield | 0% | 0% | 0% |
Fair value assumptions, underlying stock price (in dollars per share) | $ 14.76 | $ 2.05 | $ 5.21 |
Fair value assumptions, risk free interest rate (as a percent) | 0.38% | 4.18% | 4.17% |
Fair value assumptions, exercise price, closing price of Public Warrants (in dollars per share) | $ 2.50 | $ 0.03 | $ 0.52 |
DISCLOSURES ABOUT FAIR VALUE _4
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability for private warrants | $ 162 | $ 2,847 |
Carrying Amount | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 14,288 | 21,108 |
Accounts receivable, net | 9,128 | 8,260 |
Liability for private warrants | 162 | 2,847 |
Estimated Fair Value | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 14,288 | 21,108 |
Accounts receivable, net | 9,128 | 8,260 |
Liability for private warrants | 162 | 2,847 |
Estimated Fair Value | Fair Value, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 14,288 | 21,108 |
Accounts receivable, net | 9,128 | 8,260 |
Liability for private warrants | 0 | 0 |
Estimated Fair Value | Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Liability for private warrants | 0 | 0 |
Estimated Fair Value | Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Liability for private warrants | $ 162 | $ 2,847 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||||||||
Aug. 20, 2023 | Mar. 22, 2023 | Mar. 16, 2023 | Jan. 03, 2023 | Mar. 01, 2022 | Nov. 29, 2021 | Jan. 04, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||||||
Deposit servicing agreement, renewal term | 1 year | ||||||||
Deposit servicing agreement, notice period required for non renewal | 180 days | ||||||||
Deposit servicing agreement, notice period required for termination | 120 days | ||||||||
Employer matching contribution, percent of match | 50% | ||||||||
Employer matching contribution, percent of eligible compensation | 3% | ||||||||
401(k) matching contributions | $ 600,000 | ||||||||
Treasury stock returned (in shares) | 19,000 | 0 | 26,500 | ||||||
Warrants reacquired (in shares) | 1,169,963 | ||||||||
Warrant price (in dollars per share) | $ 1.69 | ||||||||
Cash consideration | $ 0 | $ 1,977,000 | |||||||
Total operating revenues | 55,252,000 | 83,597,000 | |||||||
Accounts receivable, net | 9,128,000 | 8,260,000 | |||||||
Deposit servicing agreement, initial term | 5 years | 4 years | |||||||
Deferred revenue, current | 12,322,000 | 6,647,000 | |||||||
Accounts payable and accrued liabilities | $ 10,577,000 | 12,684,000 | |||||||
Private warrants | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash consideration | $ 2,000,000 | $ 2,000,000 | |||||||
BM Technologies, Inc. | Affiliated Entity, Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage (less than) | 5% | 5% | |||||||
BM Technologies, Inc. | Affiliated Entity, Executive Chairman Of Board | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership percentage (less than) | 5% | 5% | |||||||
Affiliated Entity | Partner Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Non-competition and non-solicitation agreement period | 4 years | ||||||||
Percentage of equity interests in competitor | 2% | ||||||||
Line of credit, maximum borrowing capacity | $ 10,000,000 | ||||||||
Total operating revenues | $ 48,300,000 | $ 74,700,000 | |||||||
Accounts receivable, net | 1,400,000 | 1,400,000 | |||||||
Deferred revenue, current | 1,300,000 | 3,800,000 | |||||||
Accounts payable and accrued liabilities | 0 | 3,800,000 | |||||||
Expenses | 0 | 100,000 | |||||||
Affiliated Entity | MasterCard | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total operating revenues | 20,900,000 | 22,500,000 | |||||||
Affiliated Entity | First Carolina Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total operating revenues | 3,400,000 | ||||||||
Accounts receivable, net | 200,000 | ||||||||
Deferred revenue, current | 7,400,000 | ||||||||
Accounts payable and accrued liabilities | 0 | 0 | |||||||
Deposit Servicing Agreement | Affiliated Entity | Partner Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Servicing fee percentage | 3% | ||||||||
Period of written notice of non-renewal required prior to expiration of the term | 180 days | ||||||||
Transition Services Agreement | Affiliated Entity | Partner Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Period each party agreed to provide certain transition services to the other party (up to) | 12 months | ||||||||
Monthly service fee | $ 12,500 | ||||||||
401(k) matching contributions | $ 0 | 800,000 | |||||||
Software Licensing Agreement | Affiliated Entity | Partner Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Licensing agreement, term | 10 years | ||||||||
Special Limited Agency Agreement | Affiliated Entity | Partner Bank | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total operating revenues | $ 100,000 |
RESTRUCTURING ACTIVITIES (Detai
RESTRUCTURING ACTIVITIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) employee | Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring and related cost percent | 25% | |
Employee reduction | employee | 58 | |
Workforce reduction expenses | $ 1 | |
Expenses incurred but not paid | $ 0.2 |
IMMATERIAL CORRECTION OF PRIO_2
IMMATERIAL CORRECTION OF PRIOR PERIOD ERROR (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total operating revenues | $ (55,252) | $ (83,597) | |||
Technology, communication, and processing | (27,775) | (29,176) | |||
Interchange and card revenue | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total operating revenues | $ (9,447) | $ (22,318) | |||
Revision of Prior Period, Error Correction, Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Technology, communication, and processing | $ 400 | $ 300 | $ 100 | ||
Revision of Prior Period, Error Correction, Adjustment | Interchange and card revenue | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total operating revenues | $ 400 | $ 300 | $ 100 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 05, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restricted Stock Units (RSUs) | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 719,690 | 85,540 | |
Performance Based Restricted Stock Units | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 455,000 | 0 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Base salary | $ 275 | ||
Percentage of equity awards vested upon termination | 50% | ||
Initial term of employment agreement | 1 year | ||
Renewal term of employment agreement | 1 year | ||
Termination notice period | 60 days | ||
Percentage of equity awards vested upon performance conditions | 50% | ||
Subsequent Event | Restricted Stock Units (RSUs) | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 300,000 | ||
Vesting period | 4 years | ||
Subsequent Event | Restricted Stock Units (RSUs) | Tranche 1 | |||
Subsequent Event [Line Items] | |||
Vesting rights | 25% | ||
Subsequent Event | Restricted Stock Units (RSUs) | Tranche 2 | |||
Subsequent Event [Line Items] | |||
Vesting rights | 25% | ||
Subsequent Event | Restricted Stock Units (RSUs) | Tranche 3 | |||
Subsequent Event [Line Items] | |||
Vesting rights | 25% | ||
Subsequent Event | Restricted Stock Units (RSUs) | Tranche 4 | |||
Subsequent Event [Line Items] | |||
Vesting rights | 25% | ||
Subsequent Event | Performance Based Restricted Stock Units | |||
Subsequent Event [Line Items] | |||
Vesting period | 3 years |