United States securities and exchange commission logo
October 16, 2020
A.J. Dunklau
Chief Executive Officer
Megalith Financial Acquisition Corp.
535 5th Avenue, 29th Floor
New York, NY 10017
Re: Megalith Financial
Acquisition Corp.
Preliminary Proxy
Statement on Schedule 14A
Filed September 21,
2020
File No. 001-38633
Dear Mr. Dunklau:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Preliminary Proxy Statement Filed September 21, 2020
General
1. Please provide your
analysis why the proposed issuance of Megalith common stock as
consideration for the
business combination does not require registration under the
Securities Act.
Q. How will Megalith s Sponsor, directors and officers vote? , page 13
2. Please quantify the
percentage of Megalith common stock not subject to the voting
agreement needed to be
voted in favor of the business combination, in order to approve
the business
combination. We note the first risk factor on page 43.
Megalith s Board s Reasons for the Approval of the Business
Combination, page 23
3. Please briefly describe
any negative factors considered by the board when determining
A.J. Dunklau
FirstName LastNameA.J. Dunklau
Megalith Financial Acquisition Corp.
Comapany
October 16,NameMegalith
2020 Financial Acquisition Corp.
October
Page 2 16, 2020 Page 2
FirstName LastName
whether to enter into the merger agreement with BankMobile, including
whether the board
considered BankMobile s enterprise value in relation to the criteria
in the IPO prospectus
as a negative factor.
Risk Factor
Global economic and other conditions may adversely affect trends, page 36
4. Please place this risk factor in context by quantifying the decrease
in interchange and card
revenues attributed to COVID-19 for the three months and six months
ended June 30. We
note your disclosure on page F-103.
Background of the Business Combination, page 79
5. Please expand your discussion of the parties negotiation of the
material aspects of the
transaction, including the material terms proposed in each letter of
intent.
6. Refer to the last paragraph on page 82. Please summarize the material
terms of the non-
binding letter of intent entered into with Company A and discuss why
you determined not
to pursue that transaction.
Fairness Opinion of Vantage Point Advisors, Inc., page 89
7. Please disclose the projections provided to Vantage Point Advisors and
discuss the basis
for and material assumptions underlying these projections.
Guideline Public Company Method, page 92
8. Please disclose whether any guideline companies satisfied the criteria
but were not
included in the comparison. Also briefly describe how the guideline
company profiles
were deemed comparable to BankMobile s.
Guideline Transaction Method, page 94
9. Please disclose the guideline transactions used by Vantage Point in
this analysis. Disclose
whether any transactions satisfied the criteria but were not included
and, briefly, how the
guideline transactions were deemed comparable.
Information About BankMobile
Company History , page 114
10. Refer to the second paragraph of this section. Please substantiate
that BankMobile has
saved students over $100 million in fees.
Industry Overview, page 115
11. Refer to the fourth bullet point under Favorable Industry Trends.
Please discuss the
extent to which a shift in consumer preferences to digital customer
experiences is
expected to offset the decline in revenues attributed to the impact of
COVID-19 in the
A.J. Dunklau
Megalith Financial Acquisition Corp.
October 16, 2020
Page 3
three months and six months ended June 30, 2020.
Competitive Strengths , page 116
12. Refer to the second bullet point. Please briefly explain the basis for
BankMobile s belief
that it acquires customers at significantly lower costs through the
B2B2C distribution
model.
Product and Service Offerings
Strategy, page 119
13. Please revise to disclose the details of BankMobile Vibe's program
rewards which include
the opportunity to have portions of individual student loan debt paid
off.
Strategy, page 119
14. Refer to the last paragraph under White Label Banking. Please
balance the discussion
of the pipeline of potential partners by disclosing the percentage of
revenues attributed to
T-Mobile. Similarly revise the first full risk factor on page 33.
Growth Drivers
Expand with Existing Retail Customers, page 121
15. Please revise your disclosures to address how your customer
acquisition costs are
determined.
Description of Securities After the Business Combination
Exclusive Forum, page 142
16. We note that your forum selection provision identifies the Court of
Chancery of the State
of Delaware as the exclusive forum for certain litigation, including any
derivative
action. Please disclose whether this provision applies to actions
arising under the
Exchange Act. In that regard, we note that Section 27 of the Exchange
Act creates
exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created
by the Exchange Act or the rules and regulations thereunder. If this
provision does not
apply to actions arising under the Exchange Act, please also ensure that
the exclusive
forum provision in the governing documents states this clearly, or tell
us how you will
inform investors in future filings that the provision does not apply to
any actions arising
under the Exchange Act. Additionally, please disclose that the federal
courts will be the
exclusive forum for claims arising under the Securities Act and that
investors cannot
waive
FirstName the company s
LastNameA.J. compliance with the federal securities laws.
Additionally revise the
Dunklau
reference to the "exclusive Megalith" in last risk factor on page 50.
Comapany NameMegalith Financial Acquisition Corp.
October 16, 2020 Page 3
FirstName LastName
A.J. Dunklau
FirstName LastNameA.J. Dunklau
Megalith Financial Acquisition Corp.
Comapany
October 16,NameMegalith
2020 Financial Acquisition Corp.
October
Page 4 16, 2020 Page 4
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Notes to Financial Statements
Note 3 - Significant Accounting Policies and Basis of Presentation
Goodwill and Other Intangible Assets, page F-51
17. We note the company has continued to recognize net losses as well as
having a full
valuation allowance on the net deferred tax assets for each of the
annual and interim
periods presented. Please provide us with your goodwill impairment
analysis to support
the conclusions reached that there has been no impairment in goodwill.
Provision for Operating Losses , page F-53
18. Please revise to provide a rollfoward of activity for each of the
annual and interim periods
presented.
19. In addition, please revise to disclose the estimated amounts recorded
for unresolved
disputes at each period end reported.
Management s Discussion and Analysis of Financial Condition and Results of
Operation
Results of Operations
Operating revenues, page F-74
20. Please revise to provide additional information addressing the
specific changes in the
agreements with Customers Bank which resulted in increased servicing
and account fees
in fiscal 19 as compared to fiscal 18 and the decrease in the
interim period of 2020. Also
address the expected trends for these fees.
21. Please revise to discuss and quantify the activity volumes in each
period and address
whether there has been any changes in the percentage or amounts of
interchange card
revenues recognized on individual transactions during the periods
presented.
22. Please revise to provide a more detailed discussion of the white
label partnership in
terms of the revenues recognized compared to the expenses incurred in
each of the periods
presented.
Operating expenses, page F-78
23. Please revise to disclose the increase in the number of average full
time team members in
fiscal 2019 and in interim 2020 due to the expansion of services
provided.
24. Given that the provisions for operating losses has represented a
material amount in
comparison to total revenues recognized in each period presented,
please address the steps
being taken to address the problems being encountered and indicate
whether you expect
these trends to continue.
A.J. Dunklau
FirstName LastNameA.J. Dunklau
Megalith Financial Acquisition Corp.
Comapany
October 16,NameMegalith
2020 Financial Acquisition Corp.
October
Page 5 16, 2020 Page 5
FirstName LastName
Overview, page F-100
25. Please revise to address how the transition services agreement, the
license agreement and
the deposit servicing agreements entered into with Customers Bank will
impact financial
operating results of the Company once they are executed.
Unaudited Interim Financial Statements of BankMobile Technologies, Inc.
Management s Discussion and Analysis of Financial Condition and Results of
Operation
Results of Operations
Operating Revenues, page F-103
26. Please revise to provide a discussion of the impact of COVID-19 on all
of the revenue line
items.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Michael Henderson, Staff Accountant at (202) 551-3361
or Marc
Thomas, Staff Accountant, at (202) 551-3452 if you have questions regarding
comments on the
financial statements and related matters. Please contact J. Nolan McWilliams,
Attorney-
Advisor, at (202) 551-3217 or John Dana Brown, Attorney-Advisor, at (202)
551-3859 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: Tamar Donikyan, Esq.