Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 13, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39021 | |
Entity Registrant Name | WM TECHNOLOGY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1605615 | |
Entity Address, Address Line One | 41 Discovery | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | 844 | |
Local Phone Number | 933-3627 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001779474 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock, $0.0001 par value per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | MAPS | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 95,051,735 | |
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | MAPSW | |
Security Exchange Name | NASDAQ | |
Class V Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 55,486,361 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash | $ 35,717 | $ 34,350 |
Accounts receivable, net | 7,893 | 11,158 |
Prepaid expenses and other current assets | 6,651 | 5,978 |
Total current assets | 50,261 | 51,486 |
Property and equipment, net | 25,766 | 24,255 |
Goodwill | 68,368 | 68,368 |
Intangible assets, net | 2,369 | 2,507 |
Right-of-use assets | 14,441 | 15,629 |
Other assets | 4,644 | 4,776 |
Total assets | 165,849 | 167,021 |
Current liabilities | ||
Accounts payable and accrued expenses | 16,553 | 21,182 |
Deferred revenue | 5,786 | 5,918 |
Operating lease liabilities, current | 5,900 | 6,493 |
Tax receivable agreement liability, current | 1,756 | 122 |
Total current liabilities | 29,995 | 33,715 |
Operating lease liabilities, non-current | 25,414 | 26,550 |
Tax receivable agreement liability, non-current | 543 | 1,634 |
Warrant liability | 1,435 | 585 |
Other long-term liabilities | 1,634 | 1,386 |
Total liabilities | 59,021 | 63,870 |
Commitments and contingencies (Note 4) | ||
Stockholders’ equity | ||
Preferred Stock - $0.0001 par value; 75,000,000 shares authorized; no shares issued and outstanding at March 31, 2024 and December 31, 2023 | 0 | 0 |
Additional paid-in capital | 84,056 | 80,884 |
Accumulated deficit | (63,278) | (64,518) |
Total WM Technology, Inc. stockholders’ equity | 20,792 | 16,380 |
Noncontrolling interests | 86,036 | 86,771 |
Total stockholders’ equity | 106,828 | 103,151 |
Total liabilities and stockholders’ equity | 165,849 | 167,021 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common Stock | 9 | 9 |
Class V Common Stock | ||
Stockholders’ equity | ||
Common Stock | $ 5 | $ 5 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 95,051,735 | 94,383,053 |
Common stock, shares outstanding (in shares) | 95,051,735 | 94,383,053 |
Class V Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 55,486,361 | 55,486,361 |
Common stock, shares outstanding (in shares) | 55,486,361 | 55,486,361 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Net revenues | $ 44,389 | $ 46,416 | [1] |
Costs and expenses | |||
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 2,302 | 3,494 | [1] |
Sales and marketing | 9,634 | 12,060 | [1] |
Product development | 9,229 | 10,934 | [1] |
General and administrative | 16,526 | 20,909 | [1] |
Depreciation and amortization | 2,937 | 3,167 | [1] |
Total costs and expenses | 40,628 | 50,564 | [1] |
Operating income (loss) | 3,761 | (4,148) | [1] |
Other income (expenses), net | |||
Change in fair value of warrant liability | (850) | 725 | [1],[2] |
Change in tax receivable agreement liability | (543) | (100) | [1],[2] |
Other income (expense) | (400) | (446) | [1] |
Income (loss) before income taxes | 1,968 | (3,969) | [1] |
Provision for income taxes | 9 | 0 | [1] |
Net income (loss) | 1,959 | (3,969) | [1],[2] |
Net income (loss) attributable to noncontrolling interests | 719 | (1,494) | [1] |
Net income (loss) attributable to WM Technology, Inc. | $ 1,240 | $ (2,475) | [1] |
Class A Common Stock: | |||
Weighted average basic shares outstanding - Class A (in shares) | 94,704,164 | 92,323,757 | |
Class A Common Stock | |||
Class A Common Stock: | |||
Basic income (loss) per share - Class A (in dollars per share) | $ 0.01 | $ (0.03) | [1] |
Diluted income (loss) per share - Class A (in dollars per share) | $ 0.01 | $ (0.03) | [1] |
Class A Common Stock: | |||
Weighted average basic shares outstanding - Class A (in shares) | 94,704,164 | 92,323,757 | [1] |
Weighted average diluted shares outstanding - Class A (in shares) | 96,023,352 | 92,323,757 | [1] |
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Class P Units | Class A | Class V | Total WM Technology, Inc. Stockholders’ Equity | Total WM Technology, Inc. Stockholders’ Equity Class P Units | Common Stock Class A | Common Stock Class A Class P Units | Common Stock Class V | Additional Paid-in Capital | Additional Paid-in Capital Class P Units | (Accumulated Deficit)/ Retained Earnings | Non-controlling Interests | Non-controlling Interests Class P Units | |
Beginning balance (in shares) at Dec. 31, 2022 | 92,062,468 | 55,486,361 | |||||||||||||
Beginning balance at Dec. 31, 2022 | $ 114,777 | $ 13,380 | $ 9 | $ 5 | $ 67,986 | $ (54,620) | $ 101,397 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 4,681 | 4,396 | 4,396 | 285 | |||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes (in shares) | 475,510 | ||||||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes | 0 | 0 | 0 | 0 | |||||||||||
Distributions | (250) | (250) | |||||||||||||
Issuance of common stock - Class P Unit exchange (in shares) | 35,488 | ||||||||||||||
Issuance of common stock - Class P Unit exchange | $ 0 | $ 62 | $ 62 | $ (62) | |||||||||||
Net income (loss) | (3,969) | [1],[2] | (2,475) | (2,475) | (1,494) | ||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 92,573,466 | 55,486,361 | |||||||||||||
Ending balance at Mar. 31, 2023 | 115,239 | 15,363 | $ 9 | $ 5 | 72,444 | (57,095) | 99,876 | ||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 94,383,053 | 55,486,361 | 94,383,053 | 55,486,361 | |||||||||||
Beginning balance at Dec. 31, 2023 | 103,151 | 16,380 | $ 9 | $ 5 | 80,884 | (64,518) | 86,771 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stock-based compensation | 3,175 | 3,115 | 3,115 | 60 | |||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes (in shares) | 628,941 | ||||||||||||||
Issuance of common stock - vesting of restricted stock units, net of shares withheld for taxes | (2) | (2) | (2) | ||||||||||||
Distributions | (1,455) | (1,455) | |||||||||||||
Issuance of common stock - Class P Unit exchange (in shares) | 39,741 | ||||||||||||||
Issuance of common stock - Class P Unit exchange | $ 0 | $ 59 | $ 59 | $ (59) | |||||||||||
Net income (loss) | 1,959 | 1,240 | 1,240 | 719 | |||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 95,051,735 | 55,486,361 | 95,051,735 | 55,486,361 | |||||||||||
Ending balance at Mar. 31, 2024 | $ 106,828 | $ 20,792 | $ 9 | $ 5 | $ 84,056 | $ (63,278) | $ 86,036 | ||||||||
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | [2] | |
Cash flows from operating activities | |||
Net income (loss) | $ 1,959 | $ (3,969) | [1] |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 2,937 | 3,167 | |
Change in fair value of warrant liability | 850 | (725) | [1] |
Change in tax receivable agreement liability | 543 | 100 | [1] |
Amortization of right-of-use lease assets | 1,188 | 1,202 | |
Stock-based compensation | 2,819 | 4,383 | |
Provision (benefit) for credit losses | (658) | 360 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 3,923 | 1,677 | |
Prepaid expenses and other current assets | (673) | 2,447 | |
Other assets | 36 | 25 | |
Accounts payable and accrued expenses | (3,661) | (5,130) | |
Deferred revenue | (132) | 109 | |
Operating lease liabilities | (1,729) | (1,489) | |
Net cash provided by operating activities | 7,402 | 2,157 | |
Cash flows from investing activities | |||
Capitalized software and expenditures | (4,540) | (3,226) | |
Net cash used in investing activities | (4,540) | (3,226) | |
Cash flows from financing activities | |||
Repayments of insurance premium financing | 0 | (1,450) | |
Distributions | (1,589) | (250) | |
Proceeds from repayment of related party note | 96 | 88 | |
Taxes paid related to net share settlement of equity awards | (2) | 0 | |
Net cash used in financing activities | (1,495) | (1,612) | |
Net increase (decrease) in cash | 1,367 | (2,681) | |
Cash – beginning of period | 34,350 | 28,583 | |
Cash – end of period | 35,717 | 25,902 | |
Supplemental disclosures of noncash investing and financing activities | |||
Stock-based compensation capitalized for software development | $ 356 | $ 298 | |
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Founded in 2008, and headquartered in Irvine, California, WM Technology, Inc. (the “Company”) operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to both storefront locations and delivery operators (“retailers”) and brands in the U.S. states and U.S. territories legalized cannabis markets. The Company’s comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. The Company’s business primarily consists of its commerce-driven marketplace (“Weedmaps”), and its fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”). The Weedmaps marketplace provides cannabis consumers with information regarding cannabis retailers and brands. In addition, the Weedmaps marketplace aggregates data from a variety of sources, including retailer point-of-sale solutions (“POS”), to provide consumers with the ability to browse by strain, price, cannabinoids and other information regarding locally available cannabis products, through the Company’s website and mobile apps. The marketplace provides consumers with product discovery, access to deals and discounts, and reservation of products for pickup by consumers or delivery to consumers by participating retailers (retailers complete orders and process payments outside of the Weedmaps marketplace as Weedmaps serves only as a portal, passing a consumer’s inquiry to the dispensary). The marketplace also provides education and learning information to help newer consumers learn about the types of products to purchase. The Company believes the size, loyalty and engagement of its user base and the frequency of consumption of cannabis by its user base makes the Weedmaps marketplace highly valuable to its clients. Weedmaps for Business, the Company’s SaaS offering, is a comprehensive set of eCommerce and compliance software solutions catered towards cannabis retailers, delivery services and brands that streamline front and back-end operations and help manage compliance needs. With the development of Weedmaps for Business, the Company offers an end-to-end platform for licensed cannabis retailers to comply with state law. The Company sells a monthly subscription offering to storefront, delivery and brand clients as well as upsell and add-on offerings to licensed clients. The Company also offers other add-on products for additional fees. WM Technology, Inc. was initially incorporated in the Cayman Islands on June 7, 2019 under the name “Silver Spike Acquisition Corp” (“Silver Spike”). Silver Spike was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On June 16, 2021 (the “Closing Date”), Silver Spike consummated the business combination (the “Business Combination”), pursuant to that certain Agreement and Plan of Merger, dated December 10, 2020, by and among Silver Spike, Silver Spike Merger Sub LLC, a Delaware limited liability company and a wholly owned direct subsidiary of Silver Spike Acquisition Corp., WM Holding Company, LLC, a Delaware limited liability company (when referred to in its pre-Business Combination capacity, “Legacy WMH” and following the Business Combination, “WMH LLC”), and Ghost Media Group, LLC, a Nevada limited liability company. On the Closing Date, and in connection with the closing of the Business Combination (the “Closing”), Silver Spike was domesticated and continues as a Delaware corporation, changing its name to WM Technology, Inc. Legacy WHM was reorganized into an Up-C structure, in which substantially all of the assets and business of Legacy WHM are held by WMH LLC and continue to operate through WMH LLC and its subsidiaries, and WM Technology, Inc.’s material assets are the equity interests of WMH LLC indirectly held by it. Legacy WMH was determined to be the accounting acquirer in the Business Combination, which was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). As of March 31, 2024 , the Company had an accumulated deficit of $63.3 million . The Company has funded its operations primarily with customer payments for its services and proceeds from the issuance of common stock in connection with its initial public offering and follow-on offering. As of March 31, 2024 , the Company had cash of $35.7 million . The Company believes that its existing sources of liquidity will satisfy its working capital and capital requirements for at least the next twelve months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, certain information and footnotes required by GAAP in annual financial statements have been omitted or condensed and these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on May 24, 2024. The condensed consolidated financial statements of the Company include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Company’s financial position as of March 31, 2024, and results of its operations and its cash flows for the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the entire year. There have been no significant changes in the Company’s accounting policies from those described in the Company’s audited consolidated financial statements and the related notes to those statements. Principles of Consolidation The condensed consolidated financial statements include the accounts of WM Technology, Inc. and WMH LLC, including their wholly and majority owned subsidiaries. In conformity with GAAP, all significant intercompany accounts and transactions have been eliminated. Restatement of Previously Reported 2023 Quarterly Revenue and Credit Losses In connection with the preparation of the Company's Consolidated Financial Statements as of and for the fiscal year ended December 31, 2023, the Company discovered that in 2023, it had an inadequate policy associated with its revenue recognition related to the cash collection of a certain subset of its customers that had been placed on cash basis in 2023. For these customers, because the determination had been made that there was significant collection risk and the Company had no ability to estimate the collectability of the consideration it was entitled to, revenue recognition was prohibited under Accounting Standards Codification, (“ASC”), Topic 606, “Revenue from Contracts with Customers ” until cash was collected for the services that were provided. The Company refers to the customers in this situation as customers that have been placed on cash basis. As further discussed below, in 2023 the Company misapplied this policy in each of the first three quarters of 2023 by failing to apply (in certain cases) cash receipts to prior accounts receivable (via a credit loss recovery) and instead recognized additional revenue for the cash receipt. The Company recognizes revenue from contracts with customers under ASC 606. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Once the Company believes that it is no longer probable of collecting substantially all of the consideration to which it will be entitled in exchange for the goods or services transferred to the customer and as such is prohibited from recognizing revenue until it is probable that it will be entitled to all of the consideration. As such, when a customer with significant collection risk is identified, the Company fully reserves for all outstanding accounts receivable and records a credit loss for these receivables. Initially, revenue for contracts that the Company assesses are not probable of collection is not recognized until the customer has paid or settled all outstanding accounts receivable balances. Collectability is reassessed when there is a significant change in facts or circumstances. The assessment of collectability considers whether the Company may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. When services are still provided to customers that have been identified with significant collection risk, the Company initially applies all payments received against the customers oldest invoices. However, if the Company continues to provide services to these customers for a significant period of time, cash collections have stabilized and other factors indicate it is appropriate, cash collections are assessed to determine if any of the on-going cash receipts should be accounted for as variable consideration under ASC 606 for on-going services instead of recovery of credit losses. To date, no material variable consideration has been recognized and after applying the corrections shown in the table below, all cash collections for these customers are reflected as recovery of credit losses. Due to the inconsistency of the cash application related to the cash basis customers, and the prohibition on recognizing revenue when the Company does not believe it will receive the consideration it is entitled to, the C ompany had determined that it had improperly recognized revenue for these customers and should have instead recognized a credit loss recovery related to these cash receipts. All periods presented below have been retrospectively restated to reflect the effects of the change to revenues and operating expenses. There was no impact to operating income (loss), net income (loss), net income (loss) per share, net cash provided by operating activities and adjusted EBITDA for any periods presented. The consolidated statement of equity is not effected by this restatement. The Company has restated its unaudited condensed consolidated statements of operations for the period ended March 31, 2023 as follows (in thousands): Three Months Ended March 31, 2023 Previously Reported Adjustment As Restated Net revenues $ 48,007 $ (1,591) $ 46,416 General and administrative expenses $ 22,500 $ (1,591) $ 20,909 Total costs and expenses $ 52,155 $ (1,591) $ 50,564 The Company has restated its unaudited condensed consolidated Statements of Cash Flows for period ended March 31, 2023 as follows (in thousands): Three Months Ended March 31, 2023 Previously Reported Adjustment As Restated Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Provision for credit losses $ 1,951 $ (1,591) $ 360 Changes in operating assets and liabilities: Accounts receivable $ 86 $ 1,591 $ 1,677 Foreign Currency Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the average exchange rates during the periods. The impact of exchange rate fluctuations from translation of assets and liabilities is insignificant for the three months ended March 31, 2024 and 2023. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, the allowance for credit losses, the useful lives of long-lived assets, income taxes, website and internal-use software development costs, leases, valuation of goodwill and other intangible assets, valuation of warrant liability, deferred tax assets and the related valuation allowance, tax receivable agreement (“TRA”) liability, revenue recognition, performance and stock-based compensation and the recognition and disclosure of contingent liabilities. Risks and Uncertainties The Company operates in a relatively new industry where laws and regulations vary significantly by jurisdiction. Currently, thirty-nine states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam, and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use). Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only three states continue to prohibit cannabis entirely. Additionally, while a number of U.S. legislators have introduced various bills to legalize cannabis at the federal level, none of these bills has become law. Currently, under federal law, cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is still a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines, and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA can be a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. If any state that permits use of cannabis was to change their laws or the federal government was to actively enforce the CSA or other laws related to the federal prohibition on cannabis, the Company’s business could be adversely affected. In addition, the Company’s ability to grow and meet its operating objectives depends largely on the continued legalization and regulation of cannabis on a widespread basis. There can be no assurance that such legalization will occur on a timely basis, or at all. The geographic concentration of the Company’s clients makes the Company vulnerable to a downturn in the local market area. Historically, the Company’s business operations have been located primarily in the State of California. See Note 3, “ Revenue from Contracts with Customers ,” to these condensed consolidated financial statements for additional information. Fair Value Measurements The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. See Note 5, “Fair Value Measurements” to these condensed consolidated financial statements for additional information. Accounts Receivable, Net A receivable is recorded when an unconditional right to invoice and receive payment exists. Accounts receivable primarily include amounts related to receivables from customers. Receivables are shown net of allowance for credit losses which is maintained at a level that management believes to be sufficient to absorb estimated losses in the accounts receivable portfolio. The Company measures credit losses on its trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses . The Company calculates the expected credit losses on a pool basis for trade receivables that have similar risk characteristics. For trade receivables that do not share similar risk characteristics, the allowance for credit losses is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include balance of customer account and aging status. Account balances are written off against the allowance when it is determined that it is probable that the receivable will not be recovered. The Company had allowance for credit losses of $6.6 million and $8.7 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of the total gross accounts receivable outstanding. The following table summarizes the changes in the allowance for credit losses: Three Months Ended March 31, 2024 2023 As Restated 1 Allowance, beginning of period $ 8,748 $ 12,232 Provision (benefit) for credit losses (658) 360 Write-off, net of recoveries (1,494) (770) Allowance, end of period $ 6,596 $ 11,822 ___________________________ 1 The Provision (benefit) for credit losses for the three months ended March 31, 2023 and related allowance at the end of the period March 31, 2023, has been retrospectively adjusted to reflect the restatement of previously reported credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. Investments in Equity Securities Investments in equity securities that do not have a readily determinable fair value and qualify for the measurement alternative for equity investments provided in ASC 321, Investments – Equity Securities are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s investments in equity securities without a readily determinable fair value was nil, which is recorded within other assets on the Company’s condensed consolidated balance sheets. The Company performs a qualitative assessment at each reporting date to evaluate whether the investments in equity securities are impaired. When a qualitative assessment indicates that an investment is impaired, the investment is written down to its fair value and the impairment charge is included in asset impairment charges in the accompanying condensed consolidated statements of operations. No impairments to investments in equity securities were recorded during the three months ended March 31, 2024 and 2023. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and consist of internally developed software, computer equipment, furniture and fixtures and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and generally over three years for computer equipment, seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the remaining term of the related lease. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s condensed consolidated statements of operations. The Company assesses impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable. If an event and a change in circumstance indicates that the carrying amount of an asset (or asset group) may not be recoverable and the expected undiscounted cash flows attributable to the asset are less than its carrying value, an impairment loss equals to the excess of the asset’s carrying value over its fair value is recognized. No impairments to property and equipment were recorded during the three months ended March 31, 2024 and 2023. Capitalized Software Capitalized website and internal-use software development costs are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalizes certain costs related to the development and enhancement of the Weedmaps platform and SaaS solutions. The Company began to capitalize these costs when preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Capitalization ceases upon completion of all substantial testing. Maintenance and training costs are expensed as incurred. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred for enhancements that were expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements, generally three years. Product development costs include salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as maintaining and improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. As of March 31, 2024 and December 31, 2023, the Company has $24.2 million and $23.1 million in capitalized software costs, net, respectively which are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. During the three months ended March 31, 2024 and 2023, the Company amortized $2.5 million and $1.5 million, respectively, of internal-use software development costs included in depreciation and amortization expense in the accompanying condensed consolidated statements of operations. Goodwill and Intangible Assets Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a qualitative or quantitative process that is performed at least annually as of December 31, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. Intangible assets are recorded at cost less accumulated amortization. Intangible assets are reviewed for impairment whenever events or changes in circumstances may affect the recoverability of the net assets. Such reviews may include an analysis of current results and take into consideration the undiscounted value of projected operating cash flows. See Note 6, “Intangible Assets,” to these condensed consolidated financial statements for additional information. Leases The Company’s operating leases consist of office space located in the United States. The Company does not have any leases classified as financing leases. The Company classifies arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the condensed consolidated balance sheets as both a right-of-use asset (“ROU”) and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. The Company assesses impairment of ROU assets when an event and change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event and a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable to the ROU asset is less than its carrying value, an impairment loss equals to the excess of the ROU asset’s carrying value over its fair value is recognized. The fair values of ROU assets were estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on the sublease market rent. First, the Company tests the asset group for recoverability by comparing the undiscounted cash flows of the asset group, which include expected future lease payments related to the lease agreement offset by expected sublease income, to the carrying amount of the asset group. If the first step of the long-lived asset impairment test concludes that the carrying amount of the asset group is not recoverable, the Company performs the second step of the long-lived asset impairment test by comparing the fair value of the asset group to its carrying amount and recognizing a lease impairment charge for the amount by which the carrying amount exceeds the fair value. To estimate the fair value of the asset group, the Company relies on a discounted cash flow approach using market participant assumptions of the expected cash flows. Net rent expense f or the three months ended March 31, 2024 and 2023 was $2.2 million and $2.2 million, respectively and is incl uded in general and administrative expense in the accompanying condensed consolidated statements of operations. In 2022, the Company entered into a sublease agreement with an affiliate of the Executive Chair. The sublease commenced on June 1, 2022, and the term is for the remainder of the original lease and will expire on February 28, 2025, or sooner in the event that the original lease is cancelled prior to the expiration date. See Note 13, “Related Party Transactions,” to these condensed consolidated financial statements for additional information. Sublease rental income is recognized as a reduction to the related lease expense on a straight-line basis over the sublease term. For the three months ended March 31, 2024 and 2023, the Company recorded rent income related to a sublease of $0.5 million and $0.5 million, respectively. Warrant Liability The Company assumed 12,499,993 Public Warrants originally issued in the initial public offering of Silver Spike (the “Public Warrants”) and 7,000,000 Private Placement Warrants that were originally issued in a private placement by Silver Spike (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) upon the Closing, all of which were issued in connection with Silver Spike’s initial public offering and entitle the holder to purchase one share of Class A Common Stock at an exercise price of at $11.50 per share. As of March 31, 2024, 12,499,973 Public Warrants and 7,000,000 Private Placement Warrants remained outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants. The Company evaluated the Warrants under ASC 815-40 - Derivatives and Hedging - Contracts in Entity’s Own Equity , and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A equity holders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in change in fair value of warrant liabilities within the condensed consolidated statements of operations at each reporting date. See Note 9, “Warrant Liability,” to these consolidated financial statements for additional information. Tax Receivable Agreement In connection with the Business Combination, the Company entered into a TRA with continuing members that provides for a payment to the continuing Class A Unit holders of 85% of the amount of tax benefits, if any, that the Company realizes, or is deemed to realize, as a result of redemptions or exchanges of Units. In connection with such potential future tax benefits resulting from the Business Combination, the Company has established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded to additional paid-in capital. The TRA liability is subject to remeasurement each reporting period, due to various factors, including changes in federal and state income tax rates and assessment of the probability of payment. As these remeasurement changes are subsequent to the initial measurement, the impact of the remeasurement is recorded in other income (loss) on the condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, tax receivable agreement liability was $2.3 million and $1.8 million, respectively. During the three months ended March 31, 2024 and 2023, the Company recognized a loss of $0.5 million and $0.1 million, respectively, related to the remeasurement of its TRA liability. See Income Taxes below for information related to the Company’s allowance against its net deferred tax assets. Revenue Recognition The Company recognizes revenue when the fundamental criteria for revenue recognition are met. In accord ance with ASC Topic 606, “Revenue from Contracts with Customers, ” t he Company recognizes revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company excludes sales taxes and other similar taxes from the measurement of the transaction price . The transaction price reflects the amount the Company expects to receive for such goods, net of discounts. Discounts issued are primarily related to the Company’s WM Teal program, which stands for “Together for Equity Access and Legislation”, through which the Company provides discounts including free software, advertising, educational materials and training programs to applicants or licenses under social equity licensing programs. The Company provides a discount to license holders who were awarded special status by the state based on owner qualifications. These are typically given in new markets to add more diversity and inclusion in the cannabis space. A license’s social equity status is validated by the Company on the applicable state’s website. During the three months ended March 31, 2024 and 2023, total discount issued was $0.2 million and $1.1 million, respectively. For clients that pay in advance for listing and other services, the Company records deferred revenue and recognizes revenue over the applicable subscription term. The Company’s revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings and other WM Ad solutions. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other WM Ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools. Other WM Ad solutions include banner ads and promotion tiles on the Company’s marketplace ad as well as other advertising products on and off the Weedmaps marketplace. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the services are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception. Revenue for service contracts that the Company assesses are not probable of collection is not recognized until the contract is completed and payment is received. Collectability is reassessed when there is a significant change in facts or circumstances. The assessment of collectability considers whether the Company may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. Se e Note 3, “Revenue from Contracts with Customers,” to these condensed consolidated financial statements for additional information. Cost of Revenues (Exclusive of Depreciation and Amortization) The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and other third party services. Advertising The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.5 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations. Stock-Based Compensation The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company sells a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients. The Company’s current Weedmaps for Business monthly subscription package includes: • WM Listings: A listing page with product menu for a retailer or brand on the Weedmaps marketplace, enabling the Company’s clients to be discovered by the marketplace’s users. This also allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law. • WM Orders: Software for retailers to receive pickup and delivery orders directly from a Weedmaps listing and connect orders directly with a client’s POS system (for certain POS systems). The marketplace also enables brands to route customer purchase interest to a retailer that carries the brand’s product. After a dispensary receives the order request from the consumer, the dispensary and the consumer can continue to communicate, adjust items in the request, and handle any stock issues, prior to and while the dispensary processes and fulfills the order. • WM Store: Customizable order and menus embed which allows retailers and brands to import their Weedmaps listing menu or product reservation functionality to their own white-labeled WM Store website or separately owned website. WM Store facilitates customer pickup or delivery orders and enables retailers to reach more customers by bringing the breadth of the Weedmaps marketplace to a client’s own website. • WM Connectors: A centralized integration platform, including API tools, for easier menu management, automatic inventory updates and streamlined order fulfillment to enable clients to save time and more easily integrate into the WM Technology ecosystem and integrate with disparate software systems. This creates business efficiencies and improves the accuracy and timeliness of information across Weedmaps, creating a more positive experience for consumers and businesses. • WM Insights: An insights and analytics platform for clients leveraging data across the Weedmaps marketplace and software solutions. WM Insights provides data and analytics on user engagement and traffic trends to a client’s listing page. For Brand clients, WM Insights allows them to monitor their brand and product rankings, identify retailers not carrying products and keep track of top brands and products by category and state. The Company also offers other add-on products for additional fees, including: • WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey including: ◦ Featured Listings: Premium placement ad solutions on high visibility locations on the Weedmaps marketplace (desktop and mobile) to amplify our clients’ businesses and maximize clients’ listings and deal presence. ◦ WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion. In some jurisdictions, it is required by applicable law to showcase discounts. ◦ Other WM Ads solutions: Includes banner ads and promotion tiles on our marketplace as well as banner ads that can be tied to keyword searches. These products provide clients with targeted ad solutions in highly visible slots across our digital surfaces. • WM Dispatch: Compliant, automated and optimized logistics and fulfillment last-mile delivery software (including driver apps) that helps clients manage their delivery fleets. This product streamlines the delivery experience from in-store to front-door. In December 2023, we completed the sunset of WM AdSuite, WM CRM and WM Screens product offerings as we continue to focus our efforts on other Weedmaps for Business products that support the Weedmaps marketplace and improve the eCommerce experience for our clients and users. Disaggregation of revenue The following table summarizes the Company’s disaggregated net revenues information (in thousands): Three Months Ended March 31, 2024 2023 As Restated 2 Net revenues: Weedmaps for Business and other SaaS solutions $ 13,282 $ 11,310 Featured and deal listings 28,166 32,280 Subtotal 41,448 43,590 Other ad solutions 2,941 2,826 Total net revenues 1 $ 44,389 $ 46,416 ___________________________ 1 Net revenues are net of discounts of $0.2 million and $1.1 million, respectively, for three months ended March 31, 2024 and 2023. 2 For the three months ended March 31, 2023, net revenue has been retrospectively adjusted to reflect the restatement of previously reported 2023 revenue. See Note 2, “Summary of Significant Accounting Policies,” for further information. Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription offerings, as described above, and is recognized as the revenue recognition criteria are met. Deferred revenue balance as of March 31, 2024 and December 31, 2023 were $5.8 million and $5.9 million, respectively, and the balance is expected to be fully recognized within the next twelve months. The Company generally invoices customers and receives payment on an upfront basis and payments do not include significant financing components or variable consideration and there are generally no rights of return or refunds after the subscription period has passed. Substantially all of the Company’s revenue has been generated in the United States for the three months ended March 31, 2024 and 2023. For three months ended March 31, 2024, approximately 52% of the Company’s net revenue originated in California compared with 53% of the for the three months ended March 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation During the ordinary course of the Company’s business, it is subject to various claims and litigation. Management believes that the outcome of such claims or litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flow. Purchase Obligations The Company has minimum outstanding purchase obligations of $5.3 million for the remaining nine months in 2024, $7.3 million in 2025 and $7.5 million in 2026, due under software license agreements, of which the majority relates to the Company’s three-year AWS Enterprise agreement. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: • Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. • Level 3: Unobservable inputs based on the Company assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): Level March 31, 2024 December 31, 2023 Liabilities: Warrant liability – Public Warrants 1 $ 875 $ 375 Warrant liability – Private Placement Warrants 3 560 210 Total warrant liability $ 1,435 $ 585 The following tables summarizes the changes in the fair value of the warrant liabilities (in thousands): Three Months Ended Public Warrants Private Placement Warrants Warrant Liabilities Fair value, beginning of period $ 375 $ 210 $ 585 Change in valuation inputs or other assumptions 500 350 850 Fair value, end of period $ 875 $ 560 $ 1,435 Three Months Ended Public Warrants Private Placement Warrants Warrant Liabilities Fair value, beginning of period $ 1,250 $ 840 $ 2,090 Change in valuation inputs or other assumptions (375) (350) (725) Fair value, end of period $ 875 $ 490 $ 1,365 Public Warrants The Company determined the fair value of the Public Warrants, based on the publicly listed trading price of such warrants as of the valuation date. Accordingly, the Public Warrants are classified as Level 1 financial instruments. The fair value of the Public Warrants was $0.9 million and $0.4 million as of March 31, 2024 and December 31, 2023, respectively. Private Placement Warrants The estimated fair value of the Private Placement Warrants is determined with Level 3 inputs using the Black-Scholes model. The significant inputs and assumptions in this method are the stock price, exercise price, volatility, risk-free rate, and term or maturity. The underlying stock price input is the closing stock price as of each valuation date and the exercise price is the price as stated in the warrant agreement. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company. Volatility for each comparable publicly traded company is calculated as the annualized standard deviation of daily continuously compounded returns. The Black-Scholes analysis is performed in a risk-neutral framework, which requires a risk-free rate assumption based upon constant-maturity treasury yields, which are interpolated based on the remaining term of the Private Placement Warrants as of each valuation date. The term/maturity is the duration between each valuation date and the maturity date, which is five years following the date the Business Combination closed, or June 16, 2026. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: March 31, 2024 December 31, 2023 Exercise price $ 11.50 $ 11.50 Stock price $ 1.33 $ 0.72 Volatility 83.0 % 87.5 % Term (years) 2.21 2.46 Risk-free interest rate 4.55 % 4.13 % Significant changes in the volatility would result in a significant lower or higher fair value measurement, respectively. The fair value of the Private Placement Warrants was $0.6 million and $0.2 million as of March 31, 2024 and December 31, 2023, respectively. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 Weighted Average Amortization Period (Years) Gross Intangible Assets Accumulated Amortization Net Intangible Assets Trade and domain names 15.0 $ 7,256 $ (5,128) $ 2,128 Software technology 5.0 249 (125) 124 Customer relationships 8.0 170 (53) 117 Total intangible assets 14.5 $ 7,675 $ (5,306) $ 2,369 December 31, 2023 Weighted Average Amortization Period (Years) Gross Intangible Assets Accumulated Amortization Net Intangible Assets Trade and domain names 15.0 $ 7,256 $ (5,008) $ 2,248 Software technology 5.0 249 (112) 137 Customer relationships 8.0 170 (48) 122 Total intangible assets 14.5 $ 7,675 $ (5,168) $ 2,507 Amortization expense for intangible assets was $0.1 million and $0.6 million, respectively, for the three months ended March 31, 2024 and 2023. The estimated future amortization expense of intangible assets as of March 31, 2024 is as follows (in thousands): Remaining period in 2024 (nine months) $ 416 Year ended December 31, 2025 555 Year ended December 31, 2026 543 Year ended December 31, 2027 505 Year ended December 31, 2028 222 Thereafter 128 Total $ 2,369 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands): March 31, 2024 December 31, 2023 Prepaid insurance $ 696 $ 1,530 Prepaid marketing 320 387 Prepaid software 2,402 2,406 Other prepaid expenses and other current assets 3,233 1,655 Total $ 6,651 $ 5,978 The Company capitalizes implementation costs incurred in cloud computing arrangements that are service contracts if they meet certain requirements. Those requirements are similar to the requirements for capitalizing implementation costs incurred to develop internal-use software. Amortization is computed using the straight-line method over the term of the associated hosting arrangement. These implementation costs are classified on the balance sheet in prepaid and other current assets, and the related cash flows are presented as cash outflows from operations. Impairment is recognized and measured when it is no longer probable that the computer software project will be completed and placed in service. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands): March 31, 2024 December 31, 2023 Accounts payable and other accrued liabilities $ 8,793 $ 7,323 Accrued employee expenses 7,760 13,859 Total $ 16,553 $ 21,182 Accrued employee expenses include accrued bonuses and commission of $2.7 million and $7.4 million as of March 31, 2024 and December 31, 2023 respectively. The decrease in accrued bonuses and commission as of March 31, 2024 compared to December 31, 2023 is primarily due to payment of accrued bonus and commission related to the year ended December 31, 2023. |
Warrant Liability
Warrant Liability | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrant Liability | Warrant Liability At March 31, 2024, there were 12,499,973 Public Warrants outstanding and 7,000,000 Private Placement Warrants outstanding. The Public Warrants entitle the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of Class A Common Stock. No fractional shares will be issued upon exercise of the warrants. The Public Warrants will expire at 5:00 p.m. New York City time on June 16, 2026, or earlier upon redemption or liquidation. The Public Warrants are listed on the NYSE under the symbol “MAPSW.” The Company may redeem the Public Warrants starting July 16, 2021, in whole and not in part, at a price of $0.01 per Public Warrant, upon not less than 30 days’ prior written notice of redemption to each holder of Public Warrants, and if, and only if, the reported last sales price of the Company’s Class A Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalization and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the holders of Public Warrants. Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants (including the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain exceptions, and they are nonredeemable as long as they are held by Silver Spike Sponsor or its permitted transferees. Silver Spike Sponsor, as well as its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis and will have certain registration rights related to such Private Placement Warrants. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than Silver Spike Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. The Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A Common Stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of shares of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. The Company concluded the Public Warrants and Private Placement Warrants, or the Warrants, meet the definition of a derivative under ASC 815- Derivatives and Hedging (as described in Note 2) and are recorded as liabilities. Upon the Closing, the fair value of the Warrants was recorded on the balance sheet. The fair value of the Warrants are remeasured as of each balance sheet date, which resulted in a non-cash loss of $0.9 million and non-cash gain of $0.7 million on the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023, respectively. For additional information, see Note 5, “Fair Value Measurements.” |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Equity | Equity Class A Common Stock Voting Rights Each holder of the shares of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of the shares of Class A Common Stock do not have cumulative voting rights in the election of directors. Generally, all matters to be voted on by 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. Notwithstanding the foregoing, the holders of the outstanding shares of Class A Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class V Common Stock. Dividend Rights Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Company’s board of directors out of funds legally available therefor. Rights upon Liquidation, Dissolution and Winding-Up In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of the shares of Class A Common Stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the shares of Class A Common Stock, then outstanding, if any. Preemptive or Other Rights The holders of shares of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the shares of Class A Common Stock. The rights, preferences and privileges of holders of shares of Class A Common Stock will be subject to those of the holders of any shares of the preferred stock that the Company may issue in the future. Class V Common Stock Voting Rights Each holder of the shares of Class V Common Stock is entitled to one vote for each share of Class V Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote. The holders of shares of Class V 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. Notwithstanding the foregoing, the holders of the outstanding shares of Class V Common Stock are entitled to vote separately upon any amendment to the Company’s certificate of incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of common stock in a manner that is disproportionately adverse as compared to the Class A Common Stock. Dividend Rights The holders of the Class V Common Stock will not participate in any dividends declared by the Company’s board of directors. Rights upon Liquidation, Dissolution and Winding-Up In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class V Common Stock are not entitled to receive any of the Company’s assets. Preemptive or Other Rights The holders of shares of Class V Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class V Common Stock. Issuance and Retirement of Class V Common Stock In the event that any outstanding share of Class V Common Stock ceases to be held directly or indirectly by a holder of Class A Units, such share will automatically be transferred to us for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V Common Stock other than in connection with the valid issuance or transfer of Units in accordance with the governing documents of WMH LLC. Preferred Stock Pursuant to the amended and restated certificate of incorporation in effect as of June 15, 2021, the Company was authorized to issue 75,000,000 shares of preferred stock 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 March 31, 2024, there were no shares of preferred stock issued or outstanding. Noncontrolling Interests |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation WM Holding Company, LLC Equity Incentive Plan The Company has accounted for the issuance of Class A-3 and Class B Units issued under WM Holding Company, LLC’s Equity Incentive Plan in accordance with ASC 718 - Stock Based Compensation . The Company considers the limitation on the exercisability of the Class A-3 and Class B Units to be a performance condition and records compensation cost when it becomes probable that the performance condition will be met. In connection with the Business Combination, each of the Class A-3 Units outstanding prior to the Business Combination were cancelled, and the holder thereof received a number of Class A units representing limited liability company interests of WMH LLC (the “Class A Units”) and an equivalent number of shares of Class V Common Stock, par value $0.0001 per share (together with the Class A Units, the “Paired Interests”), and each of the Class B Units outstanding prior to the Business Combination were cancelled and holders thereof received a number of Class P units representing limited liability company interests of WMH LLC (the “Class P Units” and together with the Class A Units, the “Units”), each in accordance with the Merger Agreement. Concurrently with the closing of the Business Combination, the Unit holders entered into an exchange agreement (the “Exchange Agreement”). The terms of the Exchange Agreement, among other things, provide the Unit holders (or certain permitted transferees thereof) with the right from time to time at and after 180 days following the Business Combination to exchange their vested Paired Interests for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications, or Class P Units for shares of Class A Common Stock with a value equal to the value of such Class P Units less their participation threshold, or in each case, at the Company’s election, the cash equivalent of such shares of Class A Common Stock. A summary of the Class P Unit activity for the three months ended March 31, 2024 is as follows: Number of Units Outstanding Class P Units, December 31, 2023 14,804,507 Cancellations — Exchanged for Class A Common Stock (125,000) Outstanding, Class P Units, March 31, 2024 14,679,507 Vested, March 31, 2024 14,619,079 As of March 31, 2024, unrecognized stock-based compensation expense for non-vested Class P Units was $0.2 million, which is expected to be recognized over a weighted-average period of 0.7 years. For the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation expense for the Class P Units of $0.1 million and $0.3 million, respectively. WM Technology, Inc. Equity Incentive Plan In connection with the Business Combination, the Company adopted the WM Technology, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the granting of incentive stock options to employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants. As of March 31, 2024, 33,146,412 shares of Class A Common Stock are authorized for issuance pursuant to awards under the 2021 Plan. The number of shares of Class A Common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to five percent (5%) of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding year; provided, however that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock. As of March 31, 2024, 22,446,927 shares of Class A Common Stock are available for future issuance. A summary of the restricted stock unit (“RSU”) activity for the three months ended March 31, 2024 is as follows: Number of RSUs Weighted-average Grant Date Fair Value Non-vested at December 31, 2023 7,683,598 $ 2.96 Granted 151,516 $ 0.99 Vested (629,884) $ 4.03 Forfeited (710,060) $ 2.37 Non-vested at March 31, 2024 6,495,170 $ 2.87 As of March 31, 2024, unrecognized stock-based compensation expense for non-vested RSUs was $16.0 million, which is expected to be recognized over a weighted-average period of 1.6 years. For the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation expense for the RSUs of $2.7 million and $4.0 million, respectively. The Company grants performance-based restricted stock units (“PRSUs”) with performance and service-based vesting conditions. The level of achievement of such goals may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. The Company recognizes expense ratably over the vesting period for the PRSUs when it is probable that the performance criteria specified will be achieved. The fair value is equal to the market price of the Company’s common stock on the date of grant. Number of PRSUs Weighted-average Grant Date Fair Value Non-vested at December 31, 2023 234,375 $ 6.40 Granted — $ — Vested — $ — Forfeited — $ — Non-vested at March 31, 2024 234,375 $ 6.40 The performance period for PRSUs ended at December 31, 2023 and the estimated attainment is 25.0%. For the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation expense for the PRSUs of $0.0 million and $0.1 million, respectively. The Company recorded stock-based compensation cost related to the RSUs, PRSUs, and Class P Units in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 Sales and marketing $ 380 $ 897 Product development 855 1,168 General and administrative 1,584 2,318 Total stock-based compensation expense 2,819 4,383 Amount capitalized to software development 356 298 Total stock-based compensation cost $ 3,175 $ 4,681 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic income (loss) per share of Class A Common Stock is computed by dividing net earnings (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share of Class A Common Stock adjusts basic net income (loss) per share of Class A Common Stock for the potentially dilutive impact of securities. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability, net of the portion attributable to non-controlling interests, and adjusts the denominator to include the dilutive shares calculated using the treasury stock method. The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three months ended March 31, 2024 and 2023 (amounts in thousands, except for share and per share amounts): Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) $ 1,959 $ (3,969) Less: net income (loss) attributable to noncontrolling interests 719 (1,494) Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - basic and diluted $ 1,240 $ (2,475) Effect of dilutive securities: Less: fair value change of Public and Private Placement Warrants, net of amounts attributable to noncontrolling interests — — Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - diluted $ 1,240 $ (2,475) Denominator: Weighted average of shares of Class A Common Stock outstanding - basic 94,704,164 92,323,757 Weighted average effect of dilutive securities: Public warrants 1 — — Private warrants 1 — — Restricted stock units 1 1,319,188 — Weighted average of shares of Class A Common Stock outstanding - diluted 96,023,352 92,323,757 Net income (loss) per share of Class A Common Stock - basic $ 0.01 $ (0.03) Net income (loss) per share of Class A Common Stock - diluted $ 0.01 $ (0.03) ¹ Calculated using the treasury stock method. Shares of the Class V Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented. However, shares of the Class V Common Stock outstanding for the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method and are included in the computation of diluted earnings (loss) per share, except when the effect would be anti-dilutive. The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive: Three Months Ended March 31, 2024 2023 Class V Units 55,486,361 55,486,361 Class P Units 14,679,507 15,024,862 RSUs 6,495,170 5,909,464 PRSUs — 859,375 Public Warrants 12,499,973 12,499,973 Private Placement Warrants 7,000,000 7,000,000 Acquisition holdback shares — 677,847 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During the second quarter of 2022, the Company entered into a sublease agreement with an affiliate of the Executive Chair. The sublease commenced on June 1, 2022, and the term is for the remainder of the original lease and will expire on February 28, 2025, or sooner in the event that the original lease is cancelled prior to the expiration date. The monthly base rent, after the rent abatement period for the first four months, is $69,000. As of March 31, 2024 and December 31, 2023, rent receivable was $0.8 million and $0.7 million, respectively, and these amounts are included in prepaid expenses and other current assets on the accompanying condensed balance sheets. Rent receivable of $0.7 million was subsequently collected in April 2024. For the three months ended March 31, 2024 and 2023, income on the sublease with related party were $0.2 million. Th e income on sublease is netted with rent expense and included in general and administrative expenses on the consolidated statements of operations. In connection with the Business Combination, the Company paid $1.1 million in certain transaction costs reimbursable by Silver Spike’s sponsor (“Silver Spike Sponsor”), an affiliate to a member of the board of directors. On March 16, 2023, Silver Spike Holdings, an affiliate of Silver Spike Sponsor, entered into a promissory note with the Company and agreed to pay the principal amount of $1.1 million in 12 equal quarterly installments commencing on March 31, 2023. The promissory note bears interest at a rate of 5% per annum commencing on March 31, 2023. In an event of default, the outstanding principal amount shall bear interest for the entire period during which the principal balance is unpaid at a rate which is equal to 10% per annum. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 1,240 | $ (2,475) | [1] |
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, certain information and footnotes required by GAAP in annual financial statements have been omitted or condensed and these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on May 24, 2024. The condensed consolidated financial statements of the Company include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Company’s financial position as of March 31, 2024, and results of its operations and its cash flows for the interim periods presented. Certain prior period amounts have been reclassified to conform to the current period presentation. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the entire year. There have been no significant changes in the Company’s accounting policies from those described in the Company’s audited consolidated financial statements and the related notes to those statements. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of WM Technology, Inc. and WMH LLC, including their wholly and majority owned subsidiaries. In conformity with GAAP, all significant intercompany accounts and transactions have been eliminated. |
Foreign Currency | Foreign Currency Assets and liabilities denominated in a foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Revenue and expense accounts are translated at the average exchange rates during the periods. The impact of exchange rate fluctuations from translation of assets and liabilities is insignificant for the three months ended March 31, 2024 and 2023. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by management include, the allowance for credit losses, the useful lives of long-lived assets, income taxes, website and internal-use software development costs, leases, valuation of goodwill and other intangible assets, valuation of warrant liability, deferred tax assets and the related valuation allowance, tax receivable agreement (“TRA”) liability, revenue recognition, performance and stock-based compensation and the recognition and disclosure of contingent liabilities. |
Risks and Uncertainties | Risks and Uncertainties The Company operates in a relatively new industry where laws and regulations vary significantly by jurisdiction. Currently, thirty-nine states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam, and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use). Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only three states continue to prohibit cannabis entirely. Additionally, while a number of U.S. legislators have introduced various bills to legalize cannabis at the federal level, none of these bills has become law. Currently, under federal law, cannabis, other than hemp (defined by the U.S. government as Cannabis sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is still a Schedule I controlled substance under the Controlled Substances Act (“CSA”). Even in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the CSA and are punishable by imprisonment, substantial fines, and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA can be a predicate for certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. If any state that permits use of cannabis was to change their laws or the federal government was to actively enforce the CSA or other laws related to the federal prohibition on cannabis, the Company’s business could be adversely affected. In addition, the Company’s ability to grow and meet its operating objectives depends largely on the continued legalization and regulation of cannabis on a widespread basis. There can be no assurance that such legalization will occur on a timely basis, or at all. The geographic concentration of the Company’s clients makes the Company vulnerable to a downturn in the local market area. Historically, the Company’s business operations have been located primarily in the State of California. See Note 3, “ Revenue from Contracts with Customers ,” to these condensed consolidated financial statements for additional information. |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance in ASC 820 - Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. See Note 5, “Fair Value Measurements” to these condensed consolidated financial statements for additional information. |
Accounts Receivable, Net | Accounts Receivable, Net A receivable is recorded when an unconditional right to invoice and receive payment exists. Accounts receivable primarily include amounts related to receivables from customers. Receivables are shown net of allowance for credit losses which is maintained at a level that management believes to be sufficient to absorb estimated losses in the accounts receivable portfolio. The Company measures credit losses on its trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses . The Company calculates the expected credit losses on a pool basis for trade receivables that have similar risk characteristics. For trade receivables that do not share similar risk characteristics, the allowance for credit losses is calculated on an individual basis. Risk characteristics relevant to the Company’s accounts receivable include balance of customer account and aging status. Account balances are written off against the allowance when it is determined that it is probable that the receivable will not be recovered. The Company had allowance for credit losses of $6.6 million and $8.7 million as of March 31, 2024 and December 31, 2023, respectively. |
Investments in Equity Securities | Investments in Equity Securities Investments in equity securities that do not have a readily determinable fair value and qualify for the measurement alternative for equity investments provided in ASC 321, Investments – Equity Securities are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s investments in equity securities without a readily determinable fair value was nil, which is recorded within other assets on the Company’s condensed consolidated balance sheets. The Company performs a qualitative assessment at each reporting date to evaluate whether the investments in equity securities are impaired. When a qualitative assessment indicates that an investment is impaired, the investment is written down to its fair value and the impairment charge is included in asset impairment charges in the accompanying condensed consolidated statements of operations. No impairments to investments in equity securities were recorded during the three months ended March 31, 2024 and 2023. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and consist of internally developed software, computer equipment, furniture and fixtures and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets and generally over three years for computer equipment, seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the remaining term of the related lease. Maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s condensed consolidated statements of operations. The Company assesses impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable. If an event and a change in circumstance indicates that the carrying amount of an asset (or asset group) may not be recoverable and the expected undiscounted cash flows attributable to the asset are less than its carrying value, an impairment loss equals to the excess of the asset’s carrying value over its fair value is recognized. No impairments to property and equipment were recorded during the three months ended March 31, 2024 and 2023. Capitalized Software Capitalized website and internal-use software development costs are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalizes certain costs related to the development and enhancement of the Weedmaps platform and SaaS solutions. The Company began to capitalize these costs when preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Capitalization ceases upon completion of all substantial testing. Maintenance and training costs are expensed as incurred. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred for enhancements that were expected to result in additional features or functionality are capitalized and expensed over the estimated useful life of the enhancements, generally three years. Product development costs include salaries and benefits for employees, including engineering and technical teams who are responsible for building new products, as well as maintaining and improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. As of March 31, 2024 and December 31, 2023, the Company has $24.2 million and $23.1 million in capitalized software costs, net, respectively which are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. During the three months ended March 31, 2024 and 2023, the Company amortized $2.5 million and $1.5 million, respectively, of internal-use software development costs included in depreciation and amortization expense |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Goodwill is reviewed for impairment each year using a qualitative or quantitative process that is performed at least annually as of December 31, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. In testing for goodwill impairment, the Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value. If it is determined that it is unlikely that the carrying value exceeds the fair value, the Company is not required to complete the quantitative goodwill impairment evaluation. If it is determined that the carrying value may exceed fair value when considering qualitative factors, a quantitative goodwill impairment evaluation is performed. When performing the quantitative evaluation, if the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. Intangible assets are recorded at cost less accumulated amortization. Intangible assets are reviewed for impairment whenever events or changes in circumstances may affect the recoverability of the net assets. Such reviews may include an analysis of current results and take into consideration the undiscounted value of projected operating cash flows. See Note 6, “Intangible Assets,” to these condensed consolidated financial statements for additional information. |
Leases | Leases The Company’s operating leases consist of office space located in the United States. The Company does not have any leases classified as financing leases. The Company classifies arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the condensed consolidated balance sheets as both a right-of-use asset (“ROU”) and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for all classes of assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term. The Company assesses impairment of ROU assets when an event and change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event and a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable to the ROU asset is less than its carrying value, an impairment loss equals to the excess of the ROU asset’s carrying value over its fair value is recognized. The fair values of ROU assets were estimated using an income approach based on management’s forecast of future cash flows expected to be derived based on the sublease market rent. First, the Company tests the asset group for recoverability by comparing the undiscounted cash flows of the asset group, which include expected future lease payments related to the lease agreement offset by expected sublease income, to the carrying amount of the asset group. If the first step of the long-lived asset impairment test concludes that the carrying amount of the asset group is not recoverable, the Company performs the second step of the long-lived asset impairment test by comparing the fair value of the asset group to its carrying amount and recognizing a lease impairment charge for the amount by which the carrying amount exceeds the fair value. To estimate the fair value of the asset group, the Company relies on a discounted cash flow approach using market participant assumptions of the expected cash flows. Net rent expense f or the three months ended March 31, 2024 and 2023 was $2.2 million and $2.2 million, respectively and is incl uded in general and administrative expense in the accompanying condensed consolidated statements of operations. In 2022, the Company entered into a sublease agreement with an affiliate of the Executive Chair. The sublease commenced on June 1, 2022, and the term is for the remainder of the original lease and will expire on February 28, 2025, or sooner in the event that the original lease is cancelled prior to the expiration date. See Note 13, “Related Party Transactions,” to these condensed consolidated financial statements for additional information. |
Warrant Liability | Warrant Liability The Company assumed 12,499,993 Public Warrants originally issued in the initial public offering of Silver Spike (the “Public Warrants”) and 7,000,000 Private Placement Warrants that were originally issued in a private placement by Silver Spike (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) upon the Closing, all of which were issued in connection with Silver Spike’s initial public offering and entitle the holder to purchase one share of Class A Common Stock at an exercise price of at $11.50 per share. As of March 31, 2024, 12,499,973 Public Warrants and 7,000,000 Private Placement Warrants remained outstanding. The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants, and become Public Warrants and be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants. The Company evaluated the Warrants under ASC 815-40 - Derivatives and Hedging - Contracts in Entity’s Own Equity , and concluded they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of our Class A equity holders. Because not all of the voting stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Warrants do not meet the conditions to be classified in equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in change in fair value of warrant liabilities within the condensed consolidated statements of operations at each reporting date. See Note 9, “Warrant Liability,” to these consolidated financial statements for additional information. |
Tax Receivable Agreement | Tax Receivable Agreement In connection with the Business Combination, the Company entered into a TRA with continuing members that provides for a payment to the continuing Class A Unit holders of 85% of the amount of tax benefits, if any, that the Company realizes, or is deemed to realize, as a result of redemptions or exchanges of Units. In connection with such potential future tax benefits resulting from the Business Combination, the Company has established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded to additional paid-in capital. The TRA liability is subject to remeasurement each reporting period, due to various factors, including changes in federal and state income tax rates and assessment of the probability of payment. As these remeasurement changes are subsequent to the initial measurement, the impact of the remeasurement is recorded in other income (loss) on the condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, tax receivable agreement liability was $2.3 million and $1.8 million, respectively. During the three months ended March 31, 2024 and 2023, the Company recognized a loss of $0.5 million and $0.1 million, respectively, related to the remeasurement of its TRA liability. See Income Taxes |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the fundamental criteria for revenue recognition are met. In accord ance with ASC Topic 606, “Revenue from Contracts with Customers, ” t he Company recognizes revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) the Company satisfies these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services. The Company excludes sales taxes and other similar taxes from the measurement of the transaction price . The transaction price reflects the amount the Company expects to receive for such goods, net of discounts. Discounts issued are primarily related to the Company’s WM Teal program, which stands for “Together for Equity Access and Legislation”, through which the Company provides discounts including free software, advertising, educational materials and training programs to applicants or licenses under social equity licensing programs. The Company provides a discount to license holders who were awarded special status by the state based on owner qualifications. These are typically given in new markets to add more diversity and inclusion in the cannabis space. A license’s social equity status is validated by the Company on the applicable state’s website. During the three months ended March 31, 2024 and 2023, total discount issued was $0.2 million and $1.1 million, respectively. For clients that pay in advance for listing and other services, the Company records deferred revenue and recognizes revenue over the applicable subscription term. The Company’s revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings and other WM Ad solutions. The Company’s Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other WM Ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools. Other WM Ad solutions include banner ads and promotion tiles on the Company’s marketplace ad as well as other advertising products on and off the Weedmaps marketplace. The Company has a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the services are provided. The Company rarely needs to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, the Company recognizes revenue in proportion to the standalone selling prices of the underlying services at contract inception. Revenue for service contracts that the Company assesses are not probable of collection is not recognized until the contract is completed and payment is received. Collectability is reassessed when there is a significant change in facts or circumstances. The assessment of collectability considers whether the Company may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. Se e Note 3, “Revenue from Contracts with Customers,” to these condensed consolidated financial statements for additional information. Substantially all of the Company’s revenue has been generated in the United States for the three months ended March 31, 2024 and 2023. For three months ended March 31, 2024, approximately 52% of the Company’s net revenue originated in California compared with 53% of the for the three months ended March 31, 2023. |
Cost of Revenues (Exclusive of Depreciation and Amortization) | Cost of Revenues (Exclusive of Depreciation and Amortization) The Company’s cost of revenue primarily consists of web hosting, internet service costs, credit card processing costs and other third party services. |
Advertising | Advertising The Company expenses the cost of advertising in the period incurred. Advertising expense totaled $2.5 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively, and are included in sales and marketing expense in the accompanying condensed consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company measures fair value of employee stock-based compensation awards on the date of grant and allocates the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units is equal to the market price of the Company’s common stock on the date of grant. The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. The expected volatility is based on the historical volatility and implied volatilities for comparable companies, the expected life of the award is based on the simplified method. When awards include a performance condition that impacts the vesting of the award, the Company records compensation cost when it becomes probable that the performance condition will be met and the expense will be attributed over the performance period. See Note 11, “Stock-based Compensation,” to these condensed consolidated financial statements for additional information. |
Employee Benefit Plan | Employee Benefit Plan The Company’s 401(k) saving plan is a tax-qualified deferred compensation arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating U.S. employees may contribute a portion of their eligible earnings, subject to applicable U.S. Internal Revenue Service and plan limits. The Company matches up to 3.5% of the employee’s eligible compensation, vested upon two years of service. For the three months ended March 31, 2024 and 2023, the Company expensed $0.5 million and $0.6 million, respectively, related to employer contributions for the 401(k) saving plan. |
Other Income (Expense), net | Other Income (Expense), net Other income (expense), net consists primarily of change in fair value of warrant liability, TRA liability remeasurement and other tax related expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes under ASC 740 - Income Taxes. Under the guidance, deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. The Company assesses whether it is “more-likely-than-not” that it will realize its deferred tax assets. The Company establishes a valuation allowance when available evidence indicates that it is more-likely-than-not that the deferred tax asset will not be realized. In assessing the need for a valuation allowance, the Company considers the amounts and timing of expected future deductions or carry forwards and sources of taxable income that may enable utilization. This includes an analysis of the Company’s current financial position, results of operations for the current and prior years and all currently available information about future years. This assessment and estimates require significant management judgment. The Company maintains an existing valuation allowance until enough positive evidence exists to support its reversal. Change in the amount or timing of expected future deductions or taxable income may have a material impact on the level of income tax valuation allowances. For the year ending December 31, 2023 and for three months ended March 31, 2024, the Company conducted similar analyses, and determined that a full valuation allowance was still required. As of March 31, 2024 and December 31, 2023, tax receivable agreement liability $2.3 million and $1.8 million, respectively. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, is subject to variation due to several factors, including variability in pre-tax income (or loss), revaluations of the warrant liability, changes in flow-through income not subject to tax, valuation allowances and tax law developments. As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by WMH LLC is passed through to and included in the taxable income or loss of its members, including WM Technology, Inc. on a pro rata basis. WM Technology, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of WMH LLC following the Business Combination. The Company is also subject to taxes in foreign jurisdictions. WMH LLC will generally be required from time to time to make pro rata distributions in cash to the Company and the other holders of WMH Units at certain assumed tax rates in amounts that are intended to be sufficient to cover the taxes on the Company’s and the other WMH equity holders’ respective allocable shares of the taxable income of WMH LLC For the three months ended March 31, 2024, the Company recorded $9 thousand in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. For the three months ended March 31, 2023, the Company recorded zero income tax provisions due to the impact of the full valuation allowance on its net deferred assets. The effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of valuation allowances, warrant valuations, non-controlling interests represented by the portion of the flow-through income not subject to tax, permanent stock-based compensation and state taxes. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company does not believe it has any uncertain income tax positions that are more-likely-than-not to materially affect its condensed consolidated financial statements. |
Segment Reporting | Segment Reporting The Company has identified one business segment which management also considers to be one reporting unit as the Company’s Executive Chair and Interim Chief Financial Officer allocate resources, assess performance and manage the businesses as one segment. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to WM Technology, Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted income (loss) per share is computed giving effect to all potential weighted-average dilutive shares for the period. The dilutive effect of outstanding awards or financial instruments, if any, is reflected in diluted income (loss) per share by application of the treasury stock method or if-converted method, as applicable. Potential common shares are excluded from the calculation of diluted EPS in the event they are antidilutive or subject to performance conditions for which the necessary conditions have not been satisfied by the end of the reporting period. See Note 12, “Earnings Per Share,” for additional information on dilutive securities. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s financial instruments are potentially subject to concentrations of credit risk. The Company places its cash with high quality credit institutions and the Company’s cash balances at these institutions typically exceed the Federal Deposit Insurance Corporation limit. As of March 31, 2024, the Company had cash balances that exceeded the deposit insurance limit with four financial institutions. Management believes that the risk of loss is not significant and has not experienced any losses in such accounts. |
Recently Adopted And Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company reviewed the accounting pronouncements that became effective for fiscal year 2024 and determined that either they were not applicable, or they did not have a material impact on the consolidated financial statements. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. We are currently evaluating the impact of the adoption of this standard. The Company also reviewed other recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The Company has restated its unaudited condensed consolidated statements of operations for the period ended March 31, 2023 as follows (in thousands): Three Months Ended March 31, 2023 Previously Reported Adjustment As Restated Net revenues $ 48,007 $ (1,591) $ 46,416 General and administrative expenses $ 22,500 $ (1,591) $ 20,909 Total costs and expenses $ 52,155 $ (1,591) $ 50,564 The Company has restated its unaudited condensed consolidated Statements of Cash Flows for period ended March 31, 2023 as follows (in thousands): Three Months Ended March 31, 2023 Previously Reported Adjustment As Restated Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Provision for credit losses $ 1,951 $ (1,591) $ 360 Changes in operating assets and liabilities: Accounts receivable $ 86 $ 1,591 $ 1,677 |
Schedule of Restatement of Previously Issued Financial Statements | The following table summarizes the changes in the allowance for credit losses: Three Months Ended March 31, 2024 2023 As Restated 1 Allowance, beginning of period $ 8,748 $ 12,232 Provision (benefit) for credit losses (658) 360 Write-off, net of recoveries (1,494) (770) Allowance, end of period $ 6,596 $ 11,822 ___________________________ 1 The Provision (benefit) for credit losses for the three months ended March 31, 2023 and related allowance at the end of the period March 31, 2023, has |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Net Revenues | The following table summarizes the Company’s disaggregated net revenues information (in thousands): Three Months Ended March 31, 2024 2023 As Restated 2 Net revenues: Weedmaps for Business and other SaaS solutions $ 13,282 $ 11,310 Featured and deal listings 28,166 32,280 Subtotal 41,448 43,590 Other ad solutions 2,941 2,826 Total net revenues 1 $ 44,389 $ 46,416 ___________________________ 1 Net revenues are net of discounts of $0.2 million and $1.1 million, respectively, for three months ended March 31, 2024 and 2023. 2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Liabilities Measured on Recurring Basis | The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): Level March 31, 2024 December 31, 2023 Liabilities: Warrant liability – Public Warrants 1 $ 875 $ 375 Warrant liability – Private Placement Warrants 3 560 210 Total warrant liability $ 1,435 $ 585 |
Schedule of Derivative Liabilities at Fair Value | The following tables summarizes the changes in the fair value of the warrant liabilities (in thousands): Three Months Ended Public Warrants Private Placement Warrants Warrant Liabilities Fair value, beginning of period $ 375 $ 210 $ 585 Change in valuation inputs or other assumptions 500 350 850 Fair value, end of period $ 875 $ 560 $ 1,435 Three Months Ended Public Warrants Private Placement Warrants Warrant Liabilities Fair value, beginning of period $ 1,250 $ 840 $ 2,090 Change in valuation inputs or other assumptions (375) (350) (725) Fair value, end of period $ 875 $ 490 $ 1,365 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: March 31, 2024 December 31, 2023 Exercise price $ 11.50 $ 11.50 Stock price $ 1.33 $ 0.72 Volatility 83.0 % 87.5 % Term (years) 2.21 2.46 Risk-free interest rate 4.55 % 4.13 % |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 Weighted Average Amortization Period (Years) Gross Intangible Assets Accumulated Amortization Net Intangible Assets Trade and domain names 15.0 $ 7,256 $ (5,128) $ 2,128 Software technology 5.0 249 (125) 124 Customer relationships 8.0 170 (53) 117 Total intangible assets 14.5 $ 7,675 $ (5,306) $ 2,369 December 31, 2023 Weighted Average Amortization Period (Years) Gross Intangible Assets Accumulated Amortization Net Intangible Assets Trade and domain names 15.0 $ 7,256 $ (5,008) $ 2,248 Software technology 5.0 249 (112) 137 Customer relationships 8.0 170 (48) 122 Total intangible assets 14.5 $ 7,675 $ (5,168) $ 2,507 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense of intangible assets as of March 31, 2024 is as follows (in thousands): Remaining period in 2024 (nine months) $ 416 Year ended December 31, 2025 555 Year ended December 31, 2026 543 Year ended December 31, 2027 505 Year ended December 31, 2028 222 Thereafter 128 Total $ 2,369 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands): March 31, 2024 December 31, 2023 Prepaid insurance $ 696 $ 1,530 Prepaid marketing 320 387 Prepaid software 2,402 2,406 Other prepaid expenses and other current assets 3,233 1,655 Total $ 6,651 $ 5,978 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands): March 31, 2024 December 31, 2023 Accounts payable and other accrued liabilities $ 8,793 $ 7,323 Accrued employee expenses 7,760 13,859 Total $ 16,553 $ 21,182 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Class P Unit Activities | A summary of the Class P Unit activity for the three months ended March 31, 2024 is as follows: Number of Units Outstanding Class P Units, December 31, 2023 14,804,507 Cancellations — Exchanged for Class A Common Stock (125,000) Outstanding, Class P Units, March 31, 2024 14,679,507 Vested, March 31, 2024 14,619,079 |
Schedule of Restricted Stock Units Activity | A summary of the restricted stock unit (“RSU”) activity for the three months ended March 31, 2024 is as follows: Number of RSUs Weighted-average Grant Date Fair Value Non-vested at December 31, 2023 7,683,598 $ 2.96 Granted 151,516 $ 0.99 Vested (629,884) $ 4.03 Forfeited (710,060) $ 2.37 Non-vested at March 31, 2024 6,495,170 $ 2.87 |
Schedule of Performance Shares Activity | The fair value is equal to the market price of the Company’s common stock on the date of grant. Number of PRSUs Weighted-average Grant Date Fair Value Non-vested at December 31, 2023 234,375 $ 6.40 Granted — $ — Vested — $ — Forfeited — $ — Non-vested at March 31, 2024 234,375 $ 6.40 |
Schedule of Stock-based Payment Arrangement | The Company recorded stock-based compensation cost related to the RSUs, PRSUs, and Class P Units in the following expense categories on the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 Sales and marketing $ 380 $ 897 Product development 855 1,168 General and administrative 1,584 2,318 Total stock-based compensation expense 2,819 4,383 Amount capitalized to software development 356 298 Total stock-based compensation cost $ 3,175 $ 4,681 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computation of income (loss) per share attributable to WM Technology, Inc. and weighted-average shares of the Company’s Class A Common Stock outstanding are as follows for the three months ended March 31, 2024 and 2023 (amounts in thousands, except for share and per share amounts): Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) $ 1,959 $ (3,969) Less: net income (loss) attributable to noncontrolling interests 719 (1,494) Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - basic and diluted $ 1,240 $ (2,475) Effect of dilutive securities: Less: fair value change of Public and Private Placement Warrants, net of amounts attributable to noncontrolling interests — — Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - diluted $ 1,240 $ (2,475) Denominator: Weighted average of shares of Class A Common Stock outstanding - basic 94,704,164 92,323,757 Weighted average effect of dilutive securities: Public warrants 1 — — Private warrants 1 — — Restricted stock units 1 1,319,188 — Weighted average of shares of Class A Common Stock outstanding - diluted 96,023,352 92,323,757 Net income (loss) per share of Class A Common Stock - basic $ 0.01 $ (0.03) Net income (loss) per share of Class A Common Stock - diluted $ 0.01 $ (0.03) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following securities from its computation of diluted shares outstanding for the periods presented, as their effect would have been anti-dilutive: Three Months Ended March 31, 2024 2023 Class V Units 55,486,361 55,486,361 Class P Units 14,679,507 15,024,862 RSUs 6,495,170 5,909,464 PRSUs — 859,375 Public Warrants 12,499,973 12,499,973 Private Placement Warrants 7,000,000 7,000,000 Acquisition holdback shares — 677,847 |
Business and Organization (Deta
Business and Organization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 63,278 | $ 64,518 |
Cash | $ 35,717 | $ 34,350 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Restatement of Previously Issued Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Income Statement [Abstract] | |||
Net revenues | $ 44,389 | $ 46,416 | [1] |
General and administrative expenses | 20,909 | ||
Total costs and expenses | 40,628 | 50,564 | [1] |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Provision for credit losses | (658) | 360 | [2] |
Changes in operating assets and liabilities: | |||
Accounts receivable | $ 3,923 | 1,677 | [2] |
Previously Reported | |||
Income Statement [Abstract] | |||
Net revenues | 48,007 | ||
General and administrative expenses | 22,500 | ||
Total costs and expenses | 52,155 | ||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Provision for credit losses | 1,951 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 86 | ||
Adjustment | |||
Income Statement [Abstract] | |||
Net revenues | (1,591) | ||
General and administrative expenses | (1,591) | ||
Total costs and expenses | (1,591) | ||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Provision for credit losses | (1,591) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | $ 1,591 | ||
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2024 USD ($) segment shares | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Jul. 16, 2021 $ / shares | Jun. 16, 2021 $ / shares shares | ||
Accounting Policies [Line Items] | |||||||
Allowance of bad debt | $ 6,596,000 | $ 11,822,000 | $ 8,748,000 | $ 12,232,000 | |||
Equity securities without readily determinable fair value | 0 | 0 | |||||
Impairment loss | 0 | 0 | |||||
Asset impairment charges | 0 | 0 | |||||
Tangible asset impairment charges | 24,200,000 | 23,100,000 | |||||
Capitalized computer software, accumulated amortization | 2,500,000 | 1,500,000 | |||||
Lease costs, net | 2,200,000 | 2,200,000 | |||||
Contra rent expense | $ 500,000 | 500,000 | |||||
Tax receivable agreement liabilities as percent of expected benefit | 85% | ||||||
Tax receivable agreement, percent recorded in additional paid-in capital | 15% | ||||||
Tax receivable agreement, liability | $ 2,300,000 | $ 1,800,000 | |||||
Change in tax receivable agreement liability | (543,000) | (100,000) | [1],[2] | ||||
Sales discount | 2,302,000 | 3,494,000 | [1] | ||||
Advertising expense | $ 2,500,000 | 1,000,000 | |||||
Requisite service period | 2 years | ||||||
Defined contribution cost | $ 500,000 | 600,000 | |||||
Provision for income taxes | $ 9,000 | 0 | [1] | ||||
Number of operating segments | segment | 1 | ||||||
Number of reportable segments | segment | 1 | ||||||
Number of financial institutions with cash balance exceeding FDIC limit | segment | 4 | 4 | |||||
Sales Discount | |||||||
Accounting Policies [Line Items] | |||||||
Sales discount | $ 200,000 | $ 1,100,000 | |||||
Maximum | |||||||
Accounting Policies [Line Items] | |||||||
Employer matching contribution, percent of match | 3.50% | ||||||
Public Warrants | |||||||
Accounting Policies [Line Items] | |||||||
Origination warrants (in shares) | shares | 12,499,993 | ||||||
Warrants outstanding (in shares) | shares | 12,499,973 | ||||||
Private warrants1 | |||||||
Accounting Policies [Line Items] | |||||||
Origination warrants (in shares) | shares | 7,000,000 | ||||||
Warrants outstanding (in shares) | shares | 7,000,000 | ||||||
Class A Common Stock, $0.0001 par value per share | |||||||
Accounting Policies [Line Items] | |||||||
Right to purchase shares (in shares) | shares | 1 | ||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||
Minimum requirement for cash settlement as percent of stockholders | 50% | ||||||
Payment to continuing members as percent of amount of tax benefit | 85% | ||||||
Computer equipment | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life | 3 years | ||||||
Furniture and fixtures | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life | 7 years | ||||||
Software technology | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life | 3 years | ||||||
Enhancements | |||||||
Accounting Policies [Line Items] | |||||||
Property and equipment, useful life | 3 years | ||||||
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance, beginning of period | $ 8,748 | $ 12,232 | |
Provision (benefit) for credit losses | (658) | 360 | [1] |
Write-off, net of recoveries | (1,494) | (770) | |
Allowance, end of period | $ 6,596 | $ 11,822 | |
[1]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Disaggregated Net Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | $ 44,389 | $ 46,416 | [1] |
Sales discount | 2,302 | 3,494 | [1] |
Weedmaps for Business and other SaaS solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 13,282 | 11,310 | |
Featured and deal listings | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 28,166 | 32,280 | |
Subtotal | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 41,448 | 43,590 | |
Other ad solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenues | 2,941 | 2,826 | |
Sales Discount | |||
Disaggregation of Revenue [Line Items] | |||
Sales discount | $ 200 | $ 1,100 | |
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue | $ 5,786 | $ 5,918 | |
California | Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 52% | 53% |
Commitment and Contingencies -N
Commitment and Contingencies -Narrative (Details) - Software License Agreements $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Indefinite-Lived Intangible Assets [Line Items] | |
2024 | $ 5.3 |
2025 | 7.3 |
2026 | $ 7.5 |
Agreement period | 3 years |
Fair Value Measurements - Warra
Fair Value Measurements - Warrants (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Jun. 16, 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | $ 1,435 | $ 1,365 | ||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 585 | 2,090 | ||
Change in valuation inputs or other assumptions | 850 | (725) | [1],[2] | |
Fair value, end of period | 1,435 | 1,365 | ||
Warrants | ||||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Remaining maturity | 5 years | |||
Public Warrants | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 875 | 875 | ||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 375 | 1,250 | ||
Change in valuation inputs or other assumptions | 500 | (375) | ||
Fair value, end of period | 875 | 875 | ||
Private warrants1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 560 | 490 | ||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 210 | 840 | ||
Change in valuation inputs or other assumptions | 350 | (350) | ||
Fair value, end of period | 560 | $ 490 | ||
Recurring Basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 1,435 | |||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 585 | |||
Fair value, end of period | 1,435 | |||
Recurring Basis | Level 1 | Public Warrants | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 875 | |||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 375 | |||
Fair value, end of period | 875 | |||
Recurring Basis | Level 3 | Private warrants1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrant liability | 560 | |||
Changes In Fair Value Of Warrant Liabilities [Roll Forward] | ||||
Fair value, beginning of period | 210 | |||
Fair value, end of period | $ 560 | |||
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information (Details) $ in Thousands | Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrant liability | $ | $ 1,435 | $ 585 | $ 1,365 | $ 2,090 |
Private warrants1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrant liability | $ | $ 560 | $ 210 | $ 490 | $ 840 |
Level 3 | Private warrants1 | Exercise price | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | $ / shares | 11.50 | 11.50 | ||
Level 3 | Private warrants1 | Stock price | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | $ / shares | 1.33 | 0.72 | ||
Level 3 | Private warrants1 | Volatility | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0.830 | 0.875 | ||
Level 3 | Private warrants1 | Term (years) | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, term | 2 years 2 months 15 days | 2 years 5 months 15 days | ||
Level 3 | Private warrants1 | Risk-free interest rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 0.0455 | 0.0413 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 14 years 6 months | 14 years 6 months |
Gross Intangible Assets | $ 7,675 | $ 7,675 |
Accumulated Amortization | (5,306) | (5,168) |
Net Intangible Assets | $ 2,369 | $ 2,507 |
Trade and domain names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Intangible Assets | $ 7,256 | $ 7,256 |
Accumulated Amortization | (5,128) | (5,008) |
Net Intangible Assets | $ 2,128 | $ 2,248 |
Software technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 5 years | 5 years |
Gross Intangible Assets | $ 249 | $ 249 |
Accumulated Amortization | (125) | (112) |
Net Intangible Assets | $ 124 | $ 137 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 8 years | 8 years |
Gross Intangible Assets | $ 170 | $ 170 |
Accumulated Amortization | (53) | (48) |
Net Intangible Assets | $ 117 | $ 122 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $ 0.1 | $ 0.6 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining period in 2024 (nine months) | $ 416 | |
Year ended December 31, 2025 | 555 | |
Year ended December 31, 2026 | 543 | |
Year ended December 31, 2027 | 505 | |
Year ended December 31, 2028 | 222 | |
Thereafter | 128 | |
Net Intangible Assets | $ 2,369 | $ 2,507 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 696 | $ 1,530 |
Prepaid marketing | 320 | 387 |
Prepaid software | 2,402 | 2,406 |
Other prepaid expenses and other current assets | 3,233 | 1,655 |
Total | $ 6,651 | $ 5,978 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accounts payable and other accrued liabilities | $ 8,793 | $ 7,323 |
Accrued employee expenses | 7,760 | 13,859 |
Accounts payable and accrued expenses | 16,553 | 21,182 |
Accrued bonuses | $ 2,700 | $ 7,400 |
Warrant Liability (Details)
Warrant Liability (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Jul. 16, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Jun. 16, 2021 | ||
Derivative [Line Items] | |||||
Unit price (in dollars per share) | $ 11.50 | ||||
Notice period to redeem warrants | 30 days | ||||
Threshold trading days | 20 days | ||||
Trading period | 30 days | ||||
Change in valuation inputs or other assumptions | $ 850 | $ (725) | [1],[2] | ||
Common Stock | |||||
Derivative [Line Items] | |||||
Stock price trigger (in dollars per share) | $ 18 | ||||
Public Warrants | |||||
Derivative [Line Items] | |||||
Warrants outstanding (in shares) | 12,499,973 | ||||
Warrant redemption price (in dollars per share) | $ 0.01 | ||||
Change in valuation inputs or other assumptions | $ 500 | (375) | |||
Private warrants1 | |||||
Derivative [Line Items] | |||||
Warrants outstanding (in shares) | 7,000,000 | ||||
Number of ordinary shares called by each warrant (in shares) | 1 | ||||
Notice period to redeem warrants | 30 days | ||||
Change in valuation inputs or other assumptions | $ 350 | $ (350) | |||
Class A Common Stock | |||||
Derivative [Line Items] | |||||
Number of ordinary shares called by each warrant (in shares) | 1 | ||||
Exercise price of warrant (in dollars per share) | $ 11.50 | $ 11.50 | |||
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Equity (Details)
Equity (Details) | 3 Months Ended | ||
Mar. 31, 2024 vote shares | Dec. 31, 2023 shares | Jun. 15, 2021 shares | |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | 75,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
WMH Units | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interests, percent of outstanding units held | 38.20% | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Votes per share | vote | 1 | ||
Class V Common Stock | |||
Class of Stock [Line Items] | |||
Votes per share | vote | 1 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 16, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period of exchange agreement | 180 days | |||
Shares converted basis (in shares) | 1 | |||
Share-based compensation expense | $ 2,819 | $ 4,383 | ||
Class P Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested award, cost not yet recognized | $ 200 | |||
Nonvested award, period for recognition | 8 months 12 days | |||
Share-based compensation expense | $ 100 | 300 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested award, cost not yet recognized | $ 16,000 | |||
Nonvested award, period for recognition | 1 year 7 months 6 days | |||
Share-based compensation expense | $ 2,700 | 4,000 | ||
PRSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 100 | ||
Estimated attainment | 25% | |||
PRSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target award | 0% | |||
PRSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target award | 200% | |||
Class V Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Class A Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Class A Common Stock | 2021 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 33,146,412 | |||
Period of automatic increase of shares | 10 years | |||
Percent of increase in shares from capital stock outstanding | 5% | |||
Number of shares available for future issuance (in shares) | 22,446,927 |
Stock-based Compensation - Clas
Stock-based Compensation - Class P Units Activity (Details) - Class P Units | 3 Months Ended |
Mar. 31, 2024 shares | |
Number of Units | |
Outstanding beginning balance (in shares) | 14,804,507 |
Cancellations (in shares) | 0 |
Exchanged for Class A common stock (in shares) | (125,000) |
Outstanding ending balance (in shares) | 14,679,507 |
Vested (in shares) | 14,619,079 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Units Activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
RSUs | |
Number of RSUs and PSUs | |
Beginning balance (in shares) | shares | 7,683,598 |
Granted (in shares) | shares | 151,516 |
Vested (in shares) | shares | (629,884) |
Forfeited (in shares) | shares | (710,060) |
Ending balance (in shares) | shares | 6,495,170 |
Weighted-average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 2.96 |
Granted (in dollars per share) | $ / shares | 0.99 |
Vested (in dollars per share) | $ / shares | 4.03 |
Forfeited (in dollars per share) | $ / shares | 2.37 |
Ending balance (in dollars per share) | $ / shares | $ 2.87 |
PRSUs | |
Number of RSUs and PSUs | |
Beginning balance (in shares) | shares | 234,375 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 234,375 |
Weighted-average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 6.40 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 6.40 |
Stock-based Compensation - St_2
Stock-based Compensation - Stock-Based Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 2,819 | $ 4,383 | |
Amount capitalized to software development | 356 | 298 | [1] |
Total stock-based compensation cost | 3,175 | 4,681 | |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 380 | 897 | |
Product development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 855 | 1,168 | |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 1,584 | $ 2,318 | |
[1]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Earnings Per Share - Computatio
Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Numerator: | |||
Net income (loss) | $ 1,959 | $ (3,969) | [1],[2] |
Less: net income (loss) attributable to noncontrolling interests | 719 | (1,494) | |
Effect of dilutive securities: | |||
Less: fair value change of Public and Private Placement Warrants, net of amounts attributable to noncontrolling interests | $ 0 | $ 0 | |
Denominator: | |||
Weighted average of shares of Class A common stock outstanding - basic (in shares) | 94,704,164 | 92,323,757 | |
Restricted stock units (in shares) | 1,319,188 | 0 | |
Public Warrants | |||
Denominator: | |||
Warrants (in shares) | 0 | 0 | |
Private warrants1 | |||
Denominator: | |||
Warrants (in shares) | 0 | 0 | |
Class A Common Stock | |||
Numerator: | |||
Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - basic and diluted | $ 1,240 | $ (2,475) | |
Effect of dilutive securities: | |||
Net income (loss) attributable to WM Technology, Inc. Class A Common Stock - diluted | $ 1,240 | $ (2,475) | |
Denominator: | |||
Weighted average of shares of Class A common stock outstanding - basic (in shares) | 94,704,164 | 92,323,757 | [1] |
Weighted average of shares of Class A common stock outstanding - diluted (in shares) | 96,023,352 | 92,323,757 | [1] |
Net income (loss) per share of Class A common stock - basic (in dollars per share) | $ 0.01 | $ (0.03) | [1] |
Net income (loss) per share of Class A common stock - diluted (in dollars per share) | $ 0.01 | $ (0.03) | [1] |
[1]For the three months ended March 31, 2023, net revenues and general and administrative expenses have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information.[2]For the three months ended March 31, 2023, provision (benefit) for credit losses and change in accounts receivable have been retrospectively adjusted to reflect the restatement of previously reported revenue and credit losses. See Note 2, “Summary of Significant Accounting Policies,” for further information. |
Earnings Per Share - Dilutive S
Earnings Per Share - Dilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class V Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 55,486,361 | 55,486,361 |
Class P Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 14,679,507 | 15,024,862 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,495,170 | 5,909,464 |
PRSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 859,375 |
Public Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 12,499,973 | 12,499,973 |
Private Placement Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,000,000 | 7,000,000 |
Acquisition holdback shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 677,847 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 10 Months Ended | |
Apr. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) installment | Dec. 31, 2023 USD ($) | |
Related Party Transaction [Line Items] | ||||
Accounts receivable, net | $ 7,893 | $ 11,158 | ||
Other Current Assets | ||||
Related Party Transaction [Line Items] | ||||
Rents received, related party | $ 800 | 700 | ||
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Number of installments | installment | 12 | |||
Interest rate | 5% | |||
Interest rate if defaulted | 10% | |||
Accounts receivable, net | $ 600 | 700 | ||
Investment Income, Interest | 100 | |||
Related Party | Prepaid Expenses and Other Current Assets | ||||
Related Party Transaction [Line Items] | ||||
Accounts receivable, net | 300 | 400 | ||
Related Party | Other Assets | ||||
Related Party Transaction [Line Items] | ||||
Accounts receivable, net | 300 | $ 300 | ||
Silver Spike Sponsor | Silver Spike | ||||
Related Party Transaction [Line Items] | ||||
Transaction expenses | 1,100 | |||
Sublease Agreement | ||||
Related Party Transaction [Line Items] | ||||
Income on the sublease | $ 69 | |||
Sublease income, net | $ 200 | |||
Sublease Agreement | Related Party | Subsequent Event | ||||
Related Party Transaction [Line Items] | ||||
Rent receivable collected | $ 700 |