| Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
| Jun. 30, 2022 |
| Basis of Presentation | Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are unaudited. These unaudited condensed consolidated financial statements do not include all disclosures that are normally included in annual audited financial statements prepared in accordance with U.S. GAAP and should be read in conjunction with the Company’s consolidated financial statements. The accompanying (a) unaudited condensed consolidated balance sheet as of December 31, 2021, which has been derived from audited financial statements, and (b) the unaudited interim condensed financial statements have been prepared in accordance pursuant to the rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Therefore, it is suggested that these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Current Report on Forms 10-K 8-K/A, In addition to the adjustments to record the Business Combination between VPCC and Legacy Dave, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, cash flows, and stockholders’ equity for the interim periods, but are not necessarily indicative of the results to be anticipated for the full year 2022 or any future period. |
| Retroactive Application of Reverse Recapitalization | Retroactive Application of Reverse Recapitalization As discussed in Note 4, The Reverse Recapitalization and Related Transactions, the Business Combination is accounted for as a reverse recapitalization of equity structure. Pursuant to U.S. GAAP, the Company recasts its Consolidated Statements of Stockholders’ Equity from December 31, 2020 to the Closing Date, the total stockholder’s equity within the Company’s Consolidated Balance Sheet as of December 31, 2021 and the weighted average outstanding shares basic and diluted for the year ended December 31, 2021 by applying the recapitalization retroactively. In addition, the Company recasts the stock class and issued and outstanding number of shares, exercise prices of options and warrants for each balance sheet period presented in these condensed consolidated financial statements and the accompanying notes. Retroactive Application of Reverse Recapitalization to the Condensed Consolidated Statements of Stockholders’ Equity Pursuant to the terms of the Business Combination Agreement, as part of the Closing, all of the issued and outstanding Series A preferred stock Legacy Dave were automatically converted into Legacy Dave common stock at a 1:1 ratio and Series B-1 B-2 Retroactive Application of Reverse Recapitalization to the Condensed Consolidated Statements of Operations Furthermore, based on the retroactive application of the reverse recapitalization to the Company’s Condensed Consolidated Statements of Stockholders’ Equity, the Company recalculated the weighted average shares for the year ended December 31, 2021. The basic and diluted weighted-average Legacy Dave Common Stock were retroactively converted to Class A Common Stock and Class V Common Stock using the Exchange Ratio to conform to the recast period (see Note 3, Net Loss Per Share Attributable to Stockholders, for additional information). Retroactive Application of Reverse Recapitalization to the Condensed Consolidated Balance Sheets Finally, to conform to the retroactive application of recapitalization to the Company’s Condensed Consolidated Statements of Stockholders’ Equity, the Company reclassified the $9,881 of Legacy Dave Series A convertible preferred stock, $49,675 of Legacy Dave Series B-1 B-2 paid-in |
| Principles of Consolidation | Principles of Consolidation The Company consolidates financial statements of all entities in which the Company has a controlling financial interest, including the accounts of any Variable Interest Entity (“VIE”) in which the Company has a controlling financial interest and for which it is the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation. |
| Variable Interest Entities | Variable Interest Entities The Company is considered the primary beneficiary of Dave OD Funding I, LLC (“Dave OD”), as it has the power over the activities that most significantly impact the economic performance of Dave OD and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant, in accordance with accounting guidance. As a result, the Company consolidated Dave OD and all intercompany accounts have been eliminated. The carrying value of Dave OD’s assets and liabilities, after elimination of any intercompany transactions and balances, in the unaudited condensed consolidated balance sheet are as follows:
As of June 30, 2022 As of December 31, 2021
Assets
Cash and cash equivalents $ 21,706 $ 26,239
and 1,315 51,358 35,835
Debt and credit facility commitment fee, current 240 470
Debt facility commitment fee, long-ter m 102 131
Total assets $ 73,406 $ 62,675
Liabilities
Accounts payable $ 462 $ 411
Credit facility 20,000 20,000
Debt facility 35,000 35,000
Other current liability — 400
Warrant liability — 3,726
Total liabilities $ 55,462 $ 59,537 |
| Use of Estimates | Use of Estimates The preparation of these condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenues and expenses incurred during the reporting periods. The Company’s estimates are based on its historical experience and on various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company’s critical accounting estimates and assumptions are evaluated on an ongoing basis including those related to the: (i) allowance for unrecoverable advances; (ii) realization of tax assets and estimates of tax liabilities; (iii) valuation of equity securities; (iv) fair value of derivatives; (v) valuation of note payable; (vi) fair value of warrant |
| Revenue Recognition | Revenue Recognition Below is detail of operating revenues (in thousands):
For the Three Months Ended For the Six Months Ended
2022 2021 2022 2021
Service based revenue, net
Processing fees, net $ 23,853 $ 18,978 $ 44,831 $ 36,378
Tips 14,546 11,063 28,494 21,062
Subscriptions 4,346 4,123 8,500 8,995
Other 246 222 434 369
Transaction based revenue, net 2,814 2,843 6,097 4,851
Total $ 45,805 $ 37,229 $ 88,356 $ 71,655
Service Based Revenue, Net: Service based revenue, net primarily consists of tips, express processing fees, and subscriptions charged to Members, net of processor costs associated with advance disbursements. Member advances are treated as financial receivables under Accounting Standards Codification (“ASC”) 310 Receivables (“ASC 310”). |
| Processing Fees, Net | Processing Fees, Net Express processing fees apply when a Member requests an expedited cash advance. At the Member’s election, the Company expedites the funding of advance funds within eight hours of the advance request, as opposed to the customary three business days. Express fees are nonrefundable loan origination fees and are recognized as revenues over the expected contractual term of the advance. Costs incurred by the Company to fund cash advances are treated as direct loan origination costs. These direct loan origination costs are netted against advance-related income over the expected contractual term of the advance. Direct origination costs recognized as a reduction of advance-related income during the three and six months ended June 30, 2022 was approximately approximately |
| Tips | Tips The Company encourages but does not contractually require its Members who receive a cash advance to leave a discretionary tip. The Company treats tips as an adjustment of yield to the advances and are recognized over the average term of advances. |
| Subscriptions | Subscriptions The Company accounts for subscriptions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company must identify the contract with a Member, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies the performance obligations. The Company has evaluated the nature of its contracts with Members and determined that further disaggregation of revenue from contracts with Members into categories beyond what is presented in the condensed consolidated statements of operations was not necessary. For revenue sources that are within the scope of Topic 606, the Company fully satisfies its performance obligations and recognizes revenue in the period it is earned as services are rendered. Transaction prices are typically fixed, charged on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying ASC 606 that significantly affects the determination of the amount and timing of revenue from contracts with the Company’s Members. Sources of revenue from contracts with Members that are in the scope of ASC 606 include subscription fees, lead generation fees, and reward program fees. Subscription fees of $1 are received on a monthly basis from Members who subscribe to the Company’s application. The Company continually fulfills its obligation to each Member over the monthly Price concessions granted to Members who have insufficient funds when subscription fees are due are forms of variable consideration under the Company’s contracts with Members. For price concessions, the Company has elected, as an accounting policy, to account for price concessions for the month at the end of the reporting month based on the actual amounts of concessions granted as the impact. Service based revenue also consists of lead generation fees from the Company’s Side Hustle advertising partners. The Company is entitled to receive these lead generation fees when Members use the application to sign up for jobs with the Company’s various partners. Lead generation contracts contain a single performance obligation. Lead generation revenue is recognized at a point in time upon satisfaction and completion of the single performance obligation. The Company also offers a reward program to enable Dave debit card Members to earn subscription credits. The Company also offers a rewards program to enable eligible Dave debit card Members to earn subscription credits by spending funds with selected vendors. The program is managed by a third-party service provider and cash received by the Company from the third-party service provider is recorded as unearned revenue and recognized as revenue as the subscription credits are earned by the Members. Transaction Based Revenue, Net: Transaction based revenue, net primarily consists of interchange and ATM revenues from Dave’s Checking Product, net of ATM-related ATM-related approximately ATM-related fees recognized as a reduction of transaction based revenue during the three and six months ended June 30, 2021 were approximately |
| Processing and Servicing Fees | Processing and Servicing Fees Processor fees consist of fees paid to the Company’s processors for the recovery of advances, tips, processing fees, and subscriptions. These expenses also include fees paid for services to connect Member’s bank accounts to the Company’s application. Except for processing and service fees associated with advance disbursements, which are recorded net against revenue, all other processing and service fees are expensed as incurred. |
| Cash and Cash Equivalents | Cash and Cash Equivalents The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. |
| Restricted Cash | Restricted Cash Restricted cash primarily represents cash held at financial institutions that is pledged as collateral for specific accounts that may become overdrawn. |
| Marketable Securities | Marketable Securities Marketable securities consist of investment in a money market mutual fund. The Co mpany carries this investment at f |
| Short-Term Investments | Short- Term Short-term investments consist of corporate bonds and notes, asset backed securities, and government securities and are classified as “available-for-sale”, as the sale of such securities may be required prior to maturity to implement the Company’s strategies. The fair value of short-term investments are determined by quoted prices in active markets with unrealized gains and losses (other than credit related impairment) reported as a separate component of other comprehensive income. Unrealized gains and losses of short-term investments are included in accumulated other comprehensive income, net of tax, in our condensed consolidated balance sheets, with unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity as accumulated other comprehensive income (loss). For securities with unrealized losses, any credit related portion of the loss is recognized in earnings. If it is more likely than not that the Company will be unable or does not intend to hold the security to recovery of the non-credit related unrealized loss, the loss is recognized in earnings. Realized gains and losses are determined using the specific identification method and recognized in our condensed consolidated statements of comprehensive income. Any related amounts recorded in accumulated other comprehensive income are reclassified to earnings (on a pretax basis). |
| Member Advances | Member Advances Member advances include non-recourse Advances to Members are not interest-bearing. The Company recognizes these advances at the advanced amount and does not use discounting techniques to determine present value of advances due to their short-term average maturity. The consequent discount impact under the imputed interest rate method does not result in a significant impact to the consolidated financial statements. The Company does not provide modifications to advances. |
| Allowance for Unrecoverable Advances | Allowance for Unrecoverable Advances The Company maintains an allowance for unrecoverable advances at a level estimated to be adequate to absorb credit losses inherent in outstanding Member advances. Management currently estimates the allowance balance required using historical loss and collections experience, and, if relevant, the nature and volume of the portfolio, economic conditions, and other factors. Interpretations of past cash recovery patterns and projections of future economic conditions involve a high degree of subjectivity. Changes to the allowance have a direct impact on the provision for unrecoverable advances in the condensed consolidated statements of operations. The Company considers advances over 120 days past due or which become uncollectible based on information available to the Company as impaired. All impaired advances are deemed uncollectible and subsequently written-off written-off, |
| Internally Developed Software | Internally Developed Software Internally developed software is capitalized when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. Capitalized costs consist of salaries and other compensation costs for employees incurred for time spent on upgrades and enhancements to add functionality to the software and fees paid to third-party consultants who are directly involved in development efforts. These capitalized costs are included on the condensed consolidated balance sheets as intangible assets, net. Other costs are expensed as incurred and included within Other general and administrative expenses in the condensed consolidated statements of operations. Amortization of internally developed software commences when the software is ready for its intended use (i.e., after all substantial testing is complete). Internally developed software is amortized over its estimated useful life of 3 years. The Company’s accounting policy is to perform annual reviews of capitalized internally developed software projects to determine whether any |
| Property and Equipment, Net | Property and Equipment , Net Property and equipment are stated at cost less accumulated depreciation. Property and equipment are recorded at cost and depreciated over the estimated useful lives ranging from 3 to 7 years using the straight-line method. Maintenance and repair costs are charged to operations as incurred and included within other operating expenses in the condensed |
| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses the impairment of long-lived assets, primarily property and equipment and amortizable intangible assets, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. If the sum of the expected undiscounted future cash flows from an asset is less than the carrying amount of the asset, the Company estimates the fair value of the assets. The Company measures the loss as the amount by which the carrying amount exceeds its fair value calculated using the present value of estimated net future cash flows. |
| Warrants | Warrants The Company reviewed the terms of warrants to purchase its Common Stock to determine whether warrants should be classified as liabilities or stockholders’ equity in its condensed consolidated balance sheet. In order for a warrant to be classified in stockholders’ equity, the warrant must be (a) indexed to the Company’s equity and (b) meet the conditions for equity classification in ASC Subtopic 815-40, |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurement Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Following are the major categories of assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):
June 30, 2022 Level 1 Level 2 Level 3 Total
Assets
Marketable securities $ 36,083 $ — $ — $ 36,083
Short-term investments — 194,347 — 194,347
Total assets $ 36,083 $ 194,347 $ — $ 230,430
Liabilities
Warrant liabilities - public warrants $ 539 $ — $ — $ 539
Warrant liabilities - private placement warrants — — 631 631
Earnout liabilities — — 48 48
Total liabilities $ 539 $ — $ 679 $ 1,218
December 31, 2021 Level 1 Level 2 Level 3 Total
Assets
Marketable securities $ 8,226 $ — $ — $ 8,226
Derivative asset on loans to stockholders — — 35,253 35,253
Total assets $ 8,226 $ — $ 35,253 $ 43,479
Liabilities
Warrant liability $ — $ — $ 3,726 $ 3,726
Note payab l e — — 15,051 15,051
Total liabilities $ — $ — $ 18,777 $ 18,777
The Company had no assets and liabilities measured at fair value on a non-recurring The Company also has financial instruments not measured at fair value. The Company has evaluated cash and cash equivalents, Member advances, net, restricted cash, accounts payable, and accrued expenses, and believes the carrying value approximates the fair value due to the short-term nature of these balances. The debt facility, convertible debt, and credit facility are not measured at fair value on a recurring basis. The fair value of the debt facility, convertible debt, and credit facility approximate their carrying values. Marketable Securities: The Company evaluated the quoted market prices in active markets for its marketable securities and has classified its securities as Level 1. The Company’s investments in marketable securities are exposed to price fluctuations. The fair value measurements for the securities are based upon the quoted prices of identical Short-Term Investments: The following describes the valuation techniques used by the Company to measure the fair value of short-term investments held at June 30, 2022 and December 31, 2021. U.S. Government Securities The fair value of U.S. government securities is estimated by independent pricing services who use computerized valuation formulas to calculate current values. U.S. government securities are categorized in Level 2 of the fair value hierarchy. Corporate Bonds and Notes The fair value of corporate bonds and notes is estimated by independent pricing services who use computerized valuation formulas to calculate current values. These securities are generally categorized in Level 2 of the fair value hierarchy or in Level 3 when market-based transaction activity is unavailable and significant unobservable inputs are used. Asset-Backed Securities The fair value of these instruments is estimated by independent pricing services who use computerized valuation formulas to calculate current values. These securities are generally categorized in Level 2 of the fair value hierarchy or in Level 3 when market-based transaction activity is unavailable and significant unobservable inputs are used. Derivative Asset Related to Loans to Stockholders: In relation to certain loans to stockholders, the Company purchased call options which grant the Company the right to acquire a fixed number of the Company’s Common Stock, held by such stockholders over the exercise period (four years). However, the exercise price per share is not fixed. The approximate $3.273 exercise price per share increases by a nominal amount of approximately $0.005 for each month that lapses from the call option issuance date. As of the date of the Business Combination, the exercise price per share was approximately $3.42. The Company understands that this variability in the exercise price of the call option is tied to the passage of time, which is not an input to the fair value of the Company’s shares per ASC 815, Derivatives and Hedging (“ASC 815”). Therefore, the Company does not believe the call option meets the scope exception under ASC 815. As the scope exception is not met, the call option is accounted for as a derivative instrument. Accordingly, the call option was measured at fair value and presented as a derivative asset on loans to stockholders on the Company’s condensed consolidated balance sheets. Interest earned on the non-recourse in the period incurred. The call option was measured at fair value at the end of each reporting period with change in fair value recorded in earnings. The fair value of the call option as of June 30, 2022 and December 31, 2021, was $0 and $35.3 million, respectively. Upon consummation of the Business Combination in January 2022, all of the call options related to the Loans to Stockholders were exercised, settling the derivative asset on Loans to Stockholders o f $29.7 million and the contra-equity Loans to Stockholders of $15.2 million with APIC being the offsetting entry. A roll-forward of the Level 3 derivative asset on loans to stockholders is as follows (dollars in thousands):
Opening value at January 1, 2021 $ 457
Amendment to loan to stockholder 5
Change in fair value during the year 34,791
Ending value at December 31, 2021 35,253
Change in fair value during the period (5,572 )
Exercise of call option (29,681 )
Ending value at June 30, 2022 $ —
The Company used a probability-weighted expected return method (“PWERM”) to weight the indicated call options value determined under the binomial option pricing model to determine the fair value of the call options. The following table presents the assumptions used to value the call options for the year ended December 31, 2021:
December 31, 2021
Expected volatility 61.5 %
Risk-free interest rate 0.2 %
Remaining term 3.0 Years Warrant Liability Related to Debt Facility: As discussed further in Note 1 5 A roll-forward of the Level 3 warrant liability is as follows (dollars in thousands):
Opening value at January 1, 2021 $ —
Initial fair value at the original issuance date 106
Change in fair value during the year 3,620
Ending value at December 31, 2021 3,726
Change in fair value during the year (361 )
Exercise of warrant (3,365 )
Ending value at June 30, 2022 $ —
The Company used a PWERM to weight the indicated warrant liability value determined under the binomial option pricing model to determine the fair value of the warrant liability. The following table presents the assumptions used to value the warrant liability for the period ended December 31, 2021:
Expected volatility 57.0 %
Risk-free interest rate 0.1 - 0.6 %
Remaining term 0.0 -1.5 Years Note Payable: As discussed in Note 1 3 825-10. 815-15-25-1 4 A roll-forward of the Level 3 promissory note is as follows (dollars in thousands):
Opening value at January 1, 2021 $ —
Fair value at issuance 14,608
Change in fair value during the year 443
Ending value at December 31, 2021 15,051
Change in fair value during the year (51 )
Discharge of obligation through the issuance of Common Stock (15,000 )
Ending value at June 30, 2022 $ —
Public Warrants: As discussed further in Note 1 4 non-cash Private Warrants: As discussed further in Note 1 4 terms of the warrants, were required to be liability classified. This warrant liability was initially recorded as a liability at fair value, with the offsetting entry recorded as a non-cash condensed consolidated A roll-forward of the Level 3 private warrant liability is as follows (dollars in thousands):
Opening value at January 1, 2022 $ —
Initial fair value at the merger date 6,681
Change in fair value during the period (6,050 )
Ending value at June 30, 2022 $ 631
The Company used a Black-Scholes option pricing model to determine the fair value of the private warrant liability. The following table presents the assumptions used to value the private warrant liability for the period ended June 30, 2022:
Exercise Price $ 11.50
Expected volatility 88.2 %
Risk-free interest rate 3.01 %
Remaining term 4.51 years
Dividend yield 0 % Earnout Shares Liability: As discussed further in Note 4, The Reverse Recapitalization and Related Transactions, as part of the recapitalization , 1,586,037 shares of Class A Common Stock held by founders of VPCC are subject to forfeiture if the vesting condition is not met over the five year term following the Closing Date (“Founder Holder Earnout Shares”). These Founder Holder Earnout Shares were initially recorded as a liability at fair value and subsequently recorded at fair value at each reporting period, with changes in fair value reflected in earnings. The gain related to the change in fair value of the Founder Holder Earnout Shares liabilities in the three and six months ended June 30, 2022, was million, respectively, which is presented within changes in fair value of earnout liabilities in the condensed consolidated statements of operations. A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (dollars in thousands):
Opening value at January 1, 2022 $ —
Initial fair value at the merger date 9,682
Change in fair value during the period (9,634 )
Ending value at June 30, 2022 $ 48
The Company used a Monte Carlo Simulation Method to determine the fair value of the Founder Holder Earnout Shares liability. The following table presents the assumptions used to value the Founder Holder Earnout Shares liability for the period ended June 30, 2022:
June 30, 2022
Exercise Price $ 11.50
Expected volatility 55.0 %
Risk-free interest rate 3.01 %
Remaining term 4.51 years
Dividend yield 0 % There were no other assets or liabilities that were required to be measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021. |
| Fair Value of Common Stock | Fair Value of Common Stock Up until the Closing of the Business Combination in which the Company became publicly traded on Nasdaq, the Company was required to estimate the fair value of the Common Stock underlying the Company’s share-based awards. The fair value of the Common Stock underlying the Company’s stock-based awards was determined, in each case, based on a valuation model as discussed further below, and was approved by the Company’s Board of Directors. The Company’s Board of Directors intends all stock options granted to be exercisable at a price per share not less than the fair value per share of the ordinary share underlying those stock options on the date of grant. In the absence of a public market for the Common Stock prior to the date of the Business Combination, the valuation of the Common Stock was determined using a market approach, income approach, and subject company transaction method. The allocation of equity value was determined using the option pricing method. The valuation was performed in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation. The Company considered various objective and subjective factors to determine the fair value of its Common Stock as of each grant date, including:
• Historical financial performance;
• The Company’s business strategy;
• Industry information, such as external market conditions and trends;
• Lack of marketability of the Common Stock;
• Likelihood of achieving a liquidity event, such as an initial public offering, special-purpose acquisition company (“SPAC”) merger, or strategic sale given prevailing market conditions and the nature and history of the Company’s business;
• Prices, privileges, powers, preferences, and rights of our convertible preferred stock relative to those of the Common Stock;
• Forecasted cash flow projections for the Company;
• Publicly traded price of the SPAC;
• Primary preferred stock financings and secondary common stock transactions of the Company’s equity securities;
• Lack of marketability/illiquidity of the common stock underlying the Company’s stock-based awards involving securities in a private company; and
• Macroeconomic conditions. The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. The probability of a liquidity event and the derived discount rate are significant assumptions used to estimate the fair value of the Common Stock. If the Company had used different assumptions or estimates, the fair value of the Common Stock and the Company’s stock-based compensation expense could have been materially different. During 2019 and 2020, the Company’s estimated fair value of its Common Stock remained relatively consistent, fluctuating between $0.935 per share as of August 5, 2019 (“August 2019 Valuation”), and $0.981 per share as of August 30, 2020 (“August 2020 Valuation”). The August 2019 Valuation and August 2020 Valuation utilized the income and market approaches in estimating the fair value. The fair value of the Company’s common stock was estimated to b e $0.935 per share as of August 5, 2019 (“August 2019 Valuation”) an d $0.981 per share as of August 30, 2020 (“August 2020 Valuation”). In 2021, the Company’s management team first contemplated a transaction with a special purpose acquisition company (“SPAC Transaction”), which was incorporated into the June 7, 2021 valuation that resulted in a fair value of Dave’s Common Stock f $8.67 per share (“June 2021 Valuation”). The SPAC Transaction was considered in the subsequent valuation performed as of October 6, 2021 that resulted in a fair value of Dave’s Common Stock f $10.80 per share (“October 2021 Valuation”). The August 2019 Valuation and August 2020 Valuations were completed prior to the contemplation of the Business Combination, and at the time of these valuations management did not expect a near-term exit. The August 2019 Valuation was performed at the time of the close of Dave’s Series B-1 B-2 Common Stock The June 2021 Valuation and October 2021 Valuation both used the hybrid method, wherein a PWERM incorporated an expected near-term SPAC exit scenario as well as an OPM. The OPM was used to model the value of common stock in a delayed exit/stay private scenario. Total equity values for each scenario management identified were estimated as of the measurement date. The delayed exit/stay private scenario total equity value was estimated using the discounted cash flow method under the income approach and the GPCM under the market approach. The total equity value in the SPAC Transaction scenario included in the June 2021 Valuation was determined based on the expected Business Combination pre-money The increase in the fair value of the Company’s Common Stock Common Stock |
| Concentration of Risk | Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, Member cash advances, and accounts receivable. The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limits were approximately $25.8 million and $31.9 million T A-1/P-1 No Member individually exceeded 10% or more of the Company’s Member cash advances balances as of June 30, 2022 and December 31, 2021. |
| Leases | Leases ASC 842, Leases (“ASC 842”) requires lessees to recognize most leases on the condensed right-of-use Right-of-use Right-of-use The Company leases office space under three separate leases, all of which are considered operating leases. One lease includes the option to renew and the exercise of the renewal option is at the Company’s sole discretion. Options to extend or terminate a lease are considered as part of calculating the lease term to the extent that the option is reasonably certain of exercise. The leases do not include the options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Covenants imposed by the leases include letters of credit required to be obtained by the lessee. The incremental borrowing rate (“IBR”) represents the rate of interest the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. When determinable, the Company uses the rate implicit in the lease to determine the present value of lease payments. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. |
| Loans to Stockholders | Loans to Stockholders In 2019, the Company entered into loan, pledge, and option agreements with various employees, who are also stockholders, to provide those employees cash in exchange for non-recourse |
| Stock-Based Compensation | Stock-Based Compensation Stock Option Awards: ASC 718, Compensation-Stock Compensation (“ASC 718”), requires the estimate of the fair value of all stock-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Model. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its peer company average volatilities, including industry, stage of life cycle, size, and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. The Company recognizes forfeitures as they occur. Restricted Stock Unit Awards: Restricted stock units (“RSUs”) are valued on the grant date and the fair value of the RSUs is equal to the estimated fair value of the Company’s Common Stock on the grant date. This compensation cost is recognized over the requisite service period as a component of stock-based compensation expense, presented within compensation and benefits in the condensed consolidated statements of operations. The Company recognizes forfeitures as they occur. |
| Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising expense for the three and six months ended June 30, 2022 were are |
| Income Taxes | Income Taxes The Company follows ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the asset will not be realized. The effective tax rate used for interim periods is the estimated annual effective tax rate, based on the current estimate of full year results, except those taxes related to specific discrete events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon several significant estimates and judgments, including the estimated annual pre-tax income of the Company in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, the Company’s tax expense can be impacted by changes in tax rates or laws and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not more-likely-than-not, more-likely-than-not The Company’s policy is to recognize interest expense and penalties accrued on any unrecognized tax benefits as a component of income tax expense within the statement of operations. |
| Segment Information | Segment Information The Company determines its operating segments based on how its chief operating decision makers manage operations, make operating decisions, and evaluate operating performance. The Company has determined that the Chief Operating Decision Maker (“CODM”) is a joint role shared by the Chief Executive Officer and Chief Financial Officer. Based upon the way the CODM reviews financial information and makes operating decisions and considering that the CODM reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance, the service-based and transaction-based operations constitute a single operating segment and one reportable segment. |
| Net (Loss) Income Per Share Attributable to Stockholders | Net Loss Per Share Attributable to Stockholders The Company has two classes of participating securities (Class A Common Stock and Class V Common Stock) issued and outstanding as of June 30, 2022. Prior to the consummation of the Business Combination, the Company had five classes of participating securities (Series A preferred stock, par value per share (“Series A Preferred Shares”), Series B-1 preferred stock, par value per share (“Series B-1 Preferred Shares”), and Series B-2 preferred stock, par value per share (“Series B-2 B-1 restricted stock awards two-class two-class restricted stock awards exercised Basic net loss attributable to holders of Common Stock per share is calculated by dividing net loss attributable to holders of Common Stock by the weighted-average number of shares outstanding, excluding shares issued in relation to unvested restricted stock awards and vested early exercise options funded by non-recourse 20 Diluted net loss per share attributable to holders of Common Stock adjusts the basic net loss per share attributable to stockholders and the weighted-average number of shares outstanding for the potentially dilutive impact of stock options, warrants, and restricted stock units using the treasury stock method and convertible preferred stock using the as-if-converted The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to holders of Common Stock (in thousands, except share data):
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 2022 2021
Numerator
Net (loss) income $ (27,115 ) $ (864 ) $ (59,910 ) $ 3,088
Less: noncumulative dividend to — — — (3,088 )
Less: undistributed earnings to participating securities — — — —
Net loss attributed to common stockholders—basic (27,115 ) (864 ) (59,910 ) —
Add: undistributed earnings reallocated to common stockholders — — — —
Net loss attributed to common $ (27,115 ) $ (864 ) $ (59,910 ) $ —
Denominator
Weighted-average shares of common 371,540,222 135,906,931 370,170,270 134,341,921
Dilutive effect of convertible preferred — — — 185,833,546
Dilutive effect of equity incentive awards — — — 34,167,964
Weighted-average shares of common 371,540,222 135,906,931 370,170,270 354,343,431
Net loss per share
Basic $ (0.07 ) $ (0.01 ) $ (0.16 ) $ 0.00
Diluted $ (0.07 ) $ (0.01 ) $ (0.16 ) $ 0.00 The following potentially dilutive shares were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 2022 2021
Equity incentive awards 15,094,013 40,779,422 15,065,036 1
Convertible debt 10,000,000 — 10,000,000 —
Convertible preferred stock — 203,882,182 — 18,048,635
Series B-1 — 2,333,122 — 2,333,122
Total 25,094,013 246,994,726 25,065,036 20,381,758 |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 2016-13”). 2016-13 held-to 2016-13, In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Recently Adopted Accounting Pronouncements: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. The amendments in ASU 2019-12 remove certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of U.S. GAAP. This ASU is effective for public companies for annual periods beginning after December 15, 2020. Early adoption is permitted. The Company adopted the standard effective January 1, 2022. The Company has evaluated the effect that the updated standard had on its internal processes, condensed consolidated financial statements, and related disclosures, and has determined that the adoption did not have a significant impact on its condensed consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) 815-40): (“ASU 2020-06”). in ASU 2020-06 simplifies the ASU 2020-06 also 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity if-converted in ASU 2020-06 are In October 2020, the FASB issued ASU 2020-10, Codification Improvements (“Codification”). The update provides incremental improvements on various topics in the Codification to provide clarification, correct errors in, and simplification on a variety of topics. Among other things, the guidance includes presentation disclosures for the amount of income tax expense or benefit related to other comprehensive income. The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted the standard effective January 1, 2021. The Company has evaluated the effect that the updated standard had on its internal processes, condensed consolidated financial statements, and related disclosures, and has determined that the adoption did not have a significant impact on its condensed consolidated financial statements and related disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), 815-40), |
