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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2024-03-05 compared with 2023-03-13 · 452 added, 646 removed, 628 unchanged (64% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firms

Reports of Independent Registered Public Accounting Firm (PCAOB Firm ID:

Consolidated Balance Sheets as of December 31, 2023 and 2022

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Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Stockholders’

Equity for the Years Ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 202 2

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Dave Inc.

and subsidiary (the "Company") as of December 31, 2022 and the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for the year ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Dave Inc.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

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We have served as the Company's auditor since 2022.

Report of Moss Adams LLP

The Shareholders and the Board of Directors Dave Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Dave Inc.

and subsidiary (the “Company”) as of December 31, 2021, the related consolidated statements of operations, comprehensive loss, stockholders’

equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Moss Adams LLP

Los Angeles, California

March 25, 2022

(except for the effects of the reverse recapitalization described in Note 3, as to which the date is August 22, 2022, and the effects of the 1-for-32 reverse stock split described in Notes 2 and 22, as to which the date is March 13, 2023)

We served as the Company’s auditor from 2018 to 2022.

Consolidated Balance Sheets

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Marketable securities

Member advances, net of allowance for unrecoverable advances of $ 24,501 and $ 11,995 as of December 31, 2022 and December 31, 2021, respectively

Short-term investments

Member advances, net of allowance for credit losses of $ 20,310 and $ 24,501 as of December 31, 2023 and December 31, 2022, respectively

Prepaid income taxes

Deferred issuance costs

Prepaid expenses and other current assets

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Intangible assets, net

Derivative asset on loans to stockholders

Debt facility commitment fee, long-term

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Other non-current assets

Liabilities, and stockholders’

Liabilities, and stockholders’ equity

Current liabilities:

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Legal settlement accrual

Credit facility

Convertible debt, current

Interest payable, convertible notes, current

Other current liabilities

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Convertible debt, long-term

Warrant liabilities

Earnout liabilities

Warrant and earnout liabilities

Other non-current liabilities

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Commitments and contingencies (Note 12)

Stockholders’

Stockholders’ equity:

Preferred stock, par value per share $ 0.0001 , 10,000,000 shares authorized;

0 shares issued and outstanding at December 31, 2022 and 2021

0 shares issued and outstanding at December 31, 2023 and December 31, 2022

Class A common stock, par value per share $ 0.0001 , 500,000,000 shares authorized;

10,334,220 and 9,365,213 shares issued at December 31, 2022 and 2021, respectively;

10,284,657 and 9,283,010 shares outstanding at December 31, 2022 and 2021, respectively;

10,683,736 and 10,334,220 shares issued at December 31, 2023 and December 31, 2022, respectively;

10,634,173 and 10,284,657 shares outstanding at December 31, 2023 and December 31, 2022, respectively;

Class V common stock, par value per share $ 0.0001 , 100,000,000 shares authorized;

1,514,082 shares issued and outstanding at December 31, 2022 and 2021, respectively;

Treasury stock

1,514,082 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively;

Additional paid-in capital

Accumulated other comprehensive loss

Loans to stockholders

Accumulated other comprehensive gain (loss)

Accumulated deficit

Total stockholders’

Total liabilities, and stockholders’

Total stockholders’ equity

Total liabilities, and stockholders’ equity

See accompanying notes to the consolidated financial statements.

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except share data)

The following table presents the assets and liabilities of a consolidated variable interest entity (“VIE”), which are included in the consolidated balance sheets above.

The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations.

All intercompany accounts have been eliminated.

December 31, 2023

December 31, 2022

Cash and cash equivalents

Member advances, net of allowance for unrecoverable advances

Member advances, net of allowance for credit losses

Debt facility commitment fee, current

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Accounts payable

Current portion of debt facility

Other current liabilities

Long-term debt facility

Warrant liability

Total liabilities

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Operating expenses:

Provision for unrecoverable advances

Provision for credit losses

Processing and servicing costs

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Changes in fair value of public and private warrant liabilities

Total other income, net

Net loss before (benefit from) provision for income taxes

(Benefit from) provision for income taxes

Total other expense (income), net

Net loss before provision for (benefit from) income taxes

Provision for (benefit from) income taxes

Net loss per share:

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(in thousands)

Year Ended December 31,

Other comprehensive loss:

Unrealized loss on available-for-sale securities

For the Year Ended December 31,

Other comprehensive gain (loss):

Unrealized gain (loss) on available-for-sale securities

Comprehensive loss

See accompanying notes to the consolidated financial statements.

Consolidated Statement of Stockhol ders’

Consolidated Statement of Stockhol ders’ Equity

(in thousands, except share data)

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Treasury stock

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Accumulated deficit

Total stockholders’

Total stockholders’ equity

Balance at January 1, 2022

Issuance of Class A common stock in connection with stock plans

Vesting of stock option early exercises

Stockholder loans interest and amendment

Stock-based compensation

Balance at December 31, 2021

Issuance of Class A common stock in connection with stock plans

Issuance of Class A common stock pursuant to the PIPE financing

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Balance at December 31, 2022

Issuance of Class A common stock in connection with stock plans

Payment for fractional shares on reverse stock split

Stock-based compensation

Unrealized gain on available-for-sale securities

Balance at December 31, 2023

See accompanying notes to the consolidated financial statements.

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(in thousands)

Year Ended December 31,

For the Year Ended December 31,

Operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

Provision for unrecoverable advances

Provision for credit losses

Changes in fair value of derivative asset on loans to stockholders

Changes in fair value of earnout liabilities

Changes in fair value of warrant liabilities

Disposal of property and equipment

Changes in fair value of public and private warrant liabilities

Gain on extinguishment of liability

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Non-cash lease expense

Changes in fair value of marketable securities and short-term investments

Changes in fair value of marketable securities and investments

Changes in operating assets and liabilities:

Member advances, service revenue

Member advances, service based revenue

Prepaid income taxes

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Other non-current assets

Interest payable, convertible notes

Net cash used in operating activities

Net cash provided by (used in) operating activities

Investing activities

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Net disbursements and collections of Member advances

Purchase of short-term investments

Sale and maturity of short-term investments

Purchase of investments

Sale and maturity of investments

Purchase of marketable securities

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Financing activities

Repayment on line of credit

Proceeds from PIPE offering

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Payment of issuance costs

Payment for fractional shares on reverse stock split

Proceeds from issuance of common stock for stock option exercises

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Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of the year

Cash and cash equivalents and restricted cash, end of the year

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of the period

Cash and cash equivalents and restricted cash, end of the period

Supplemental disclosure of non-cash investing and financing activities:

Property and equipment purchases in accounts payable and accrued liabilities

Operating lease right of use assets recognized

Operating lease liabilities recognized

Property and equipment purchases in accounts payable

Conversion of convertible preferred stock to Class A common stock in connection with the reverse recapitalization

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Discharge of PIPE promissory note in connection with the reverse recapitalization

Vesting of common stock exercised early

Amendment to loan to stockholder

Supplemental disclosure of cash (received) paid for:

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheet with the same as shown in the consolidated statement of cash flows.

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets with the same as shown in the consolidated statement of cash flows

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash, end of year

Total cash, cash equivalents, and restricted cash, end of the period

See accompanying notes to the consolidated financial statements.

Note 1 Organization and N ature of Business

(“Dave”

or the “Company”), a Delaware corporation, with headquarters located in Los Angeles, California, is a financial services company.

(“Dave” or the “Company”), a Delaware corporation, with headquarters located in Los Angeles, California, is a financial services company.

Dave was originally incorporated in the State of Delaware on January 14, 2021 as a special purpose acquisition company under the name VPC Impact Acquisition Holdings III, Inc.

(“VPCC”) and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On January 5, 2022, the Company consummated the transactions contemplated by that certain Agreement and Plan of Merger, dated as of June 7, 2021 among VPCC, Dave Inc., a Delaware corporation (“Legacy Dave”), and other entities.

In connection with the closing of the transactions, the Company changed its name from “VPC Impact Acquisition Holdings III, Inc.” to “Dave Inc.”

Dave offers a suite of innovative financial products aimed at helping Members improve their financial health.

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Through Dave Banking, the Company provides a digital checking account experience with valuable tools for building long-term financial health.

Dave also helps Members generate extra income for spending or emergencies through Dave’s Side Hustle product and Surveys, where Dave presents Members with supplemental work and income opportunities.

Dave also helps Members generate extra income for spending or emergencies through high APY savings rates as well as Dave’s Side Hustle product and Surveys, where Dave presents Members with supplemental work and income opportunities, respectively.

Many Americans are often unable to maintain a positive balance between paychecks, driving a reliance on overdraft, payday loans, auto title loans and other forms of expensive credit to put food on the table, gas in their car or pay for unexpected emergencies.

For example, traditional banks charge up to $ 34 for access to as little as $ 5 of overdraft, whereas many others in the financial services sector do not allow for overdraft at all.

For example, traditional banks charge up to $ 35 for access to as little as $ 5 of overdraft, and many others in the financial services sector do not allow for overdraft at all.

Dave invented a short-term liquidity alternative called ExtraCash, which allows Members to advance funds to their account and avoid a fee altogether.

Members may now receive an advance of up to $ 500 and may only have one advance outstanding at any given time.

Members may receive an advance of up to $ 500 and may only have one advance outstanding at any given time.

Dave Banking:

Dave offers a full-service digital checking account through its partnership with Evolve Bank and Trust (“Evolve”).

The Dave Spending Account does not have overdraft or minimum balance fees.

Dave's automated financial management tool leverages historical bank account data to help Members understand both recurring and commonly occurring charges.

Budget notifies Members when there is a chance of an overdraft, and allows Members to qualify for Dave’s ExtraCash product for up to $ 500 of additional liquidity.

Dave charges a $ 1 monthly subscription for access to the Budget product.

Budget also notifies Members when there is a chance of an overdraft.

Dave seeks to help Members improve their financial health by presenting new job opportunities to them.

Through Dave’s partnership with leading employers, Members can quickly submit applications and improve their income with flexible employment.

Dave recently launched Surveys product allows for additional earning opportunities, allowing Members to take paid surveys anytime within the Dave mobile application.

This functionality drives engagement within the Dave ecosystem and deepens the Company's relationship to its Members’

financial wellbeing.

Through Dave’s partnership with leading employers, Members can quickly submit applications and improve their income with flexible employment.

Dave's Surveys product allows for additional income earning opportunities, allowing Members to take paid surveys anytime within the Dave mobile application.

This functionality drives engagement within the Dave ecosystem and deepens the Company’s relationship to its Members’ financial wellbeing.

Business Combination

On January 5, 2022 (the “Closing Date”), the Company consummated the previously announced transaction (pursuant to that certain Agreement and Plan of Merger, dated June 7, 2021 (the “Business Combination Agreement”), by and among Dave Inc.

(prior to the Mergers (as defined below), hereinafter referred to as “Legacy Dave”), VPCC, Bear Merger Company I Inc., a Delaware corporation and a direct, wholly owned Subsidiaries of VPCC (“First Merger Sub”), and Bear Merger Company II LLC, a Delaware limited liability company and a direct wholly owned Subsidiaries of VPCC (“Second Merger Sub”).

and the Mergers together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”

or the “Transactions”), with Second Merger Sub (such entity, following the Second Merger, the “Surviving Entity”) surviving the Second Merger as a wholly owned subsidiary of VPCC.

Following the Mergers, “VPC Impact Acquisition Holdings III, Inc.”

was renamed “Dave Inc.”

and the Surviving Entity was renamed “Dave Operating LLC”.

On January 5, 2022, the holders of (a) Legacy Dave capital stock and (b) Legacy Dave’s options to purchase Legacy Dave capital stock pursuant to Legacy Dave’s stock plan (the “Legacy Dave Options”), received aggregate merger consideration, consisting of 10,226,738 shares of Class A common stock of the Company, par value $ 0.0001 per share (the “Class A Common Stock”) and 1,514,082 shares of Class V common stock of the Company, par value $ 0.0001 per share (the “Class V Common Stock”, and together with the Class A Common Stock, the “Common Stock”).

The Company’s Class A Common Stock is now listed on The N asdaq Global Market (“Nasdaq”) under the symbol “DAVE”, and warrants to purchase the Class A Common Stock at an exercise price of $ 368 per share are listed on Nasdaq under the symbol “DAVEW.”

The audited consolidated financial statements included i n Dave’s Annual Report on Form 10-K filed with the SEC on March 25, 2022 are those of VPCC prior to the consummation of the Business Combination and the name change.

The audited consolidated financial statements of Legacy Dave are included in Form 8-K/A filed with the SEC on August 22, 2022 prior to the consummation of the Business Combination and the name change.

Prior to the Business Combination, VPCC neither engaged in any operations nor generated any revenue.

Until the Business Combination, based on VPCC’s business activities, VPCC was a “shell company”

as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The audited Consolidated Financial Statements as of and for the years ended December 31, 2021 and 2020 for Legacy Dave were included in Exhibit 99.3 of Amendment No.

1 to the Current Report on Form 8-K (the “Form 8-K/A”) filed with the Securities and Exchange Commission (“SEC”) on August 22, 2022.

among Legacy Dave, VPCC, Bear Merger Company I Inc., a Delaware corporation and a direct, wholly owned Subsidiaries of VPCC (“First Merger Sub”), and Bear Merger Company II LLC, a Delaware limited liability company and a direct wholly owned Subsidiaries of VPCC (“Second Merger Sub”).

On January 5, 2022, pursuant to the Business Combination Agreement, First Merger Sub merged with and into Legacy Dave (the “First Merger”), with Legacy Dave surviving the First Merger as a wholly owned subsidiary of VPCC (such company, in its capacity as the surviving corporation of the First Merger, the “Surviving Corporation”), immediately followed by the Surviving Corporation merging with and into Second Merger Sub (the “Second Merger”, the Second Merger together with the First Merger, the “Mergers” and the Mergers together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination” or the “Transactions”), with Second Merger Sub (such entity, following the Second Merger, the “Surviving Entity”) surviving the Second Merger as a wholly owned subsidiary of VPCC.

Following the Mergers, “VPC Impact Acquisition Holdings III, Inc.” was renamed “Dave Inc.” and the Surviving Entity was renamed “Dave Operating LLC”.

Note 2 Significant Accounting Policies

Basis of Presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

On January 4, 2023, the Board approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023 .

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

On January 4, 2023, the Board approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023 .

At a special meeting held on December 16, 2022, stockholders approved the reverse stock split.

The primary goal of the reverse stock split is to bring the Company’s stock price above the share bid price requirement for continued listing on Nasdaq.

The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and a variable interest entity (“VIE”).

All intercompany transactions and balances have been eliminated upon consolidation.

In accordance with the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, the Company consolidates any VIE of which the Company is the primary beneficiary.

The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity;

however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests.

ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company does not consolidate a VIE in which it has a majority ownership interest when it is not considered the primary beneficiary.

The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that the Company continues to be the primary beneficiary.

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 are shown in the consolidated balance sheets.

The assets of Dave OD are restricted and its creditors have full recourse against the Company for its liabilities.

Retroactive Application of Reverse Recapitalization

The Business Combination is accounted for as a reverse recapitalization of an equity structure.

For further details, refer to Note 3, The Reverse Recapitalization and Related Transactions.

Pursuant to U.S.

GAAP, the Company recast 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 consolidated financial statements and the accompanying notes.

Retroactive Application of Reverse Recapitalization to the Consolidated Statements of Stockholders’

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 and Series B-2 convertible preferred stock of Legacy Dave were automatically converted into Legacy Dave common stock at a 1:

1.033076 ratio, which were all converted again, along with all other issued and outstanding common stock of Legacy Dave, into 10,707,706 shares of Class A Common Stock and Class V Common Stock at an exchange ratio of 1.354387513 (the “Exchange Ratio”).

Additionally, each of the Company’s options that were outstanding immediately prior to the closing of the Business C ombination remained outstanding and converted into options for Class A Common Stock and Class V Common Stock equal to the number of the Company’s Common Stock, subject to such options multiplied by the Exchange Ratio at an exercise price per share equal to the current exercise price per share for such options divided by the Exchange Ratio, with the aggregate amount of shares of Class A Common Stock and Class V Common Stock issuable upon exercise of such options to be 1,002,383 .

Retroactive Application of Reverse Recapitalization to the Consolidated Statements of Operations

Furthermore, based on the retroactive application of the reverse recapitalization to the Company’s 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 (for additional information, see discussion of Net Loss Per Share Attributable to Stockholders in Note 2, Significant Accounting Policies below).

Retroactive Application of Reverse Recapitalization to the Consolidated Balance Sheets

Finally, to conform to the retroactive application of recapitalization to the Company’s 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 convertible preferred stock, and the $ 12,617 of Legacy Dave Series B-2 convertible preferred stock to the additional paid-in capital (“APIC”), less amounts attributable to the par value of the common stock as recast, as of December 31, 2021.

The carrying value of Dave OD’s assets and liabilities, after elimination of any intercompany transactions and balances are shown in the consolidated balance sheets.

The assets of Dave OD are restricted and may only be used to settle obligations of Dave OD.

Use of Estimates

The preparation of these 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 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) Fair value of a derivative asset;

(ii) Fair value of warrant liabilities;

(iii) Fair value of earnout liabilities;

(iv) Allowance for unrecoverable advances;

(v) Fair value of common stock;

(vi) Income taxes.

The Company’s estimates are based on its historical experience and 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 credit losses;

(ii) Income taxes.

Actual results may differ from these estimates under different assumptions or conditions.

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Below is detail of operating revenues (in thousands):

For the Year Ended

For the Year Ended December 31,

Service based revenue, net

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Transaction based revenue, net

Interchange revenue, net

ATM revenue, net

Total operating revenues, net

Service Based Revenue, Net:

Service based revenue, net primarily consists of tips, processing fees, and subscriptions charged to Members, net of processor costs associated with advance disbursements.

Member advances are treated as financial receivables under ASC 310 Receivables (“ASC 310”) and processing fees, net and tips are also accounted for in accordance with ASC 310.

Service based revenue, net primarily consists of optional tips, optional processing fees, and subscriptions charged to Members, net of processor costs associated with advance disbursements.

Member advances are treated as financial receivables under ASC 310 Receivables (“ASC 310”) and processing fees, net and tips are also accounted for in accordance with ASC 310.

Processing Fees, Net

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, as opposed to the customary three business days, of the advance approval.

At the Member’s election, the Company expedites the funding of advance funds within eight hours of the advance approval, as opposed to the customary two or three business days.

Processing fees are nonrefundable loan origination fees and are recognized as revenues over the average expected contractual term of its advances.

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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.

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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 subscription term.

The series of distinct services represents a single performance obligation that is satisfied over time.

The Company recognizes revenue ratably as the Member receives and consumes the benefits of the platform throughout the contract period.

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 amount of concessions granted as the impact is considered insignificant.

Other service based revenue consists of lead generation fees from the Company’s Side Hustle advertising partners.

The Company recognizes revenue ratably as the Member receives and consumes the benefits of the platform throughout the monthly contract period.

Price concessions granted to Members who have insufficient funds when subscription fees are due and not collected are forms of variable consideration under the Company’s contracts with Members.

Other service based revenue consists of lead generation fees from the Company’s Side Hustle advertising partners and revenue share from its survey partners.

Transaction Based Revenue, Net:

Transaction based revenue, net primarily consists of interchange and ATM revenues from the Company’s Checking Product, net of certain interchange and ATM-related fees, fees earned from withdrawal-related transactions, volume support from a certain co-branded agreement, and deposit referrals and are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.

T he Company earns interchange fees from Members spend on Dave-branded debit cards, which are reduced by interchange-related costs payable to fulfillment partners.

Interchange revenue is remitted by merchants and represent a percentage of the underlying transaction value processed through a payment network.

ATM fees are earned from the Member’s usage of out-of-network ATMs, which are reduced by related ATM transaction costs.

Transaction based revenue, net primarily consists of interchange and ATM revenues from the Company’s Checking Product, net of certain interchange and ATM-related fees, fees earned from funding and withdrawal-related transactions, volume support from a certain co-branded agreement, fees earned related to the Rewards Product for Members who make debit card spending transactions at participating merchants, and deposit referrals and are recognized at the point in time the transactions occur, as the performance obligations are satisfied and the variable consideration is not constrained.

The Company earns interchange fees from Members spend on Dave-branded debit cards, which are reduced by interchange-related costs payable to fulfillment partners.

Interchange revenue is r emitted by merchants and represents a percentage of the underlying transaction value processed through a payment network.

ATM fees earned from the Member’s usage of out-of-network reduced by related ATM transaction costs during the years ended December 31, 2023 and 2022, were $ 2.6 million and $ 2.9 million, respectively.

ATM-related fees recognized as a reduction of transaction based revenue during the years ended December 31, 2023 and 2022, were $ 1.8 million and $ 0.7 million, respectively.

Processing and Servicing Costs

Processor costs consist of amounts paid to third party 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.

These expenses also include fees paid for services to connect Member’s bank accounts to the Company’s

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.

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The fair value of marketable securities is determined by quoted prices in active markets and changes in fair value are recorded in other (income) expense in the consolidated statements of operations.

Short-Term Investments

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 is 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.

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 investments is 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.

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 the consolidated statements of comprehensive income.

Realized gains and losses are determined using the specific identification method and recognized in the consolidated statements of comprehensive loss.

Any related amounts recorded in accumulated other comprehensive income are reclassified to earnings (on a pretax basis).

Member Advances

Member advances include ExtraCash advances, fees, and tips, net of certain direct origination costs and allowance for unrecoverable advances.

Management’s intent is to hold advances until the earlier of repayment or payoff date.

Members’

cash advances are treated as financial receivables under ASC 310.

Member advances include ExtraCash advances, fees, and tips, net of certain direct origination costs and allowance for credit losses.

Management’s intent is to hold advances until the earlier of repayment or payoff date.

Members’ cash advances are treated as financial receivables under ASC 310.

Advances to Members are not interest-bearing.

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The Company does not provide modifications to advances and does not charge late fees.

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 the 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 such as cash received subsequent to period-end.

Interpretations of the nature and volume of the portfolio 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 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 and are a direct reduction to the allowance for unrecoverable advances.

Subsequent recoveries of Member advances written-off, if any, are recorded as a reduction to Member advances when collected, resulting in a reduction to the allowance for unrecoverable advances and a corresponding reduction to the provision for unrecoverable advances expense in the consolidated statements of operations.

Allowance for Credit Losses

Member advances from contracts with Members as of the balance sheet dates are recorded at their original advance amounts, inclusive of outstanding processing fees and tips, and reduced by an allowance for expected credit losses.

The Company pools its Member advances, all of which are short-term (average term of approximately 11 days) in nature and arise from contracts with Members, based on shared risk characteristics to assess their risk of loss, even when that risk is remote.

The Company uses an aging method and historical loss rates as a basis for estimating the percentage of current and delinquent Member advances balances that will result in credit losses to derive the allowance for credit losses.

The Company considers whether the conditions at the measurement date and reasonable and supportable forecasts about future conditions warrant an adjustment to its historical loss experience.

In assessing such adjustments, the Company primarily evaluates current economic conditions, expectations of near-term economic trends and changes in customer payment terms, collection trends and cash collections subsequent to the balance sheet date.

For the measurement dates presented herein, given its methods of collecting funds, and that the Company has not observed meaningful changes in its customers’ payment behavior, it determined that its historical loss rates remained most indicative of its lifetime expected losses.

The Company immediately recognizes an allowance for expected credit losses upon the origination of the advance.

Adjustments to the allowance each period for changes in the estimate of lifetime

expected credit losses are recognized in operating expenses—provision for credit losses in the consolidated statements of operations.

When the Company determines that a Member advance is not collectible, or after 120 days from origination has passed, the uncollectible amount is written-off as a reduction to both the allowance and the gross asset balance.

Based on the average advance outstanding Member advance term of approximately 11 days, advances outstanding 12 or more days from origination may be considered past due.

Subsequent recoveries are recorded when received and are recorded as a recovery of the allowance for expected credit losses.

Any change in circumstances related to a specific Member advance may result in an additional allowance for expected credit losses being recognized in the period in which the change occurs.

Internally Developed Software

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Capitalized costs for the years ended December 31, 2023 and 2022, were $ 7.6 million and $ 8.6 million, respectively .

Additionally, $ 7.7 million related to the Company's legacy advance application software asset has been fully amortized and written off as of June 2023.

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 impairment indicators are present as of December 31, or whenever a change in circumstances suggests an impairment indicator is present.

If any impairment indicators are present, the Company will perform a recoverability test by comparing the sum of the estimated undiscounted cash flows attributed to the asset group to their carrying value.

If the undiscounted cash flows expected to result from the remaining use of the asset (i.e., cash flows when testing recoverability) are less than the asset group’s carrying value, the Company will determine the fair value of the asset group and recognize an impairment loss as the amount by which the carrying value of the asset group exceeds its fair value.

If based on the results of the recoverability test, no impairment is indicated as the remaining undiscounted cash flows exceed the carrying value of the software asset group, the carrying value of the asset group as of the assessment date is deemed fully recoverable.

In addition, the Company evaluates the remaining useful life of an intangible asset that is being amortized each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization.

If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying value of the intangible asset shall be amortized prospectively over that revised remaining useful life.

Property and Equipment

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Fair Value of Financial Instruments

ASC 820, Fair Value Measurement (“ASC 820”), provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in the consolidated financial statements.

Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs.

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The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

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.

Level 1—Quoted prices in active markets for identical 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.

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 $ 20.7 million and $ 31.9 million at December 31, 2022 and 2021, respectively.

The Company’s payment processors also collect cash on the Company’s behalf and will hold these cash balances temporarily until they are settled the next business day.

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, Member advances, and accounts receivable.

The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation insured limits were approximately $ 40.9 million and $ 20.7 million at December 31, 2023 and 2022, respectively.

The Company’s payment processors also collect cash on the Company’s behalf and will hold these cash balances temporarily until they are settled the next business day.

Also, the Company does not believe its marketable securities are exposed to any significant credit risk due to the quality and nature of the securities in which the money is held.

No Member individually exceeded 10% or more of the Company’s Member cash advances balances as of December 31, 2022 and December 31, 2021.

ASC 842, Leases (“ASC 842”) requires lessees to recognize most leases on the consolidated balance sheet with a corresponding right-of-use asset.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

No Member individually exceeded 10% or more of the Company’s Member advances balances as of December 31, 2023 and December 31, 2022.

ASC 842, Leases (“ASC 842”) requires lessees to recognize most leases on the consolidated balance sheet with a corresponding right-of-use asset.

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.

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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.

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

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 promissory notes and call options, which allow the Company to acquire shares held by these stockholders.

Following ASC 310, the Company recorded the notes as a reduction to shareholders’

equity and will do so until it is repaid, or the associated call option is exercised and the Company reacquires the collateralized shares.

Interest earned and accrued on the notes also increases this contra-equity account balance.

Upon consummation of the Business Combination in January 2022, all of the call options related to the Loans to Stockholders were exercised and the related loans were settled.

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.

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The Company recognizes forfeitures as they occur.

Subsequent modifications to outstanding awards result in incremental cost if the fair value is increased as a result of the modification.

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 consolidated statements of operations.

Restricted stock units (“RSUs”) are valued on the grant date.

The fair value of the RSUs that vest based solely on a service condition is equal to the estimated fair value of the Company’s Common Stock on the grant date.

This compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

For RSUs that contain both a market condition and a service condition, market volatility and other factors are taken into consideration in determining the grant date fair value and the related compensation expense is recognized on a straight-line basis over the requisite service period of each separately vesting tranche, regardless of whether the market condition is satisfied, provided that the requisite service has been provided.

These costs are a component of stock-based compensation expense, presented within compensation and benefits in the consolidated statements of operations.

The Company recognizes forfeitures as they occur.

Restricted Stock Awards:

Restricted stock awards (“RSAs”) are valued on the grant date, and the fair value of the RSAs is equal to the estimated fair value of the Company’s Common Stock on the grant date.

Restricted stock awards (“RSAs”) are valued on the grant date.

The fair value of the RSAs is equal to the estimated fair value of the Company’s Common Stock on the grant date.

The Company recognizes forfeitures as they occur.

RSAs Issued to Non-Employees:

The Company issues shares of restricted stock to consultants for various advisory and consulting-related services.

The Company recognized this expense, measured as the estimated value of the shares issued, as a component of stock-based compensation expense, presented within compensation and benefits in the consolidated statements of operations.

Advertising Costs

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Advertising expense for the years ended December 31, 2023 and 2022, were $ 48.4 million and $ 69.0 million, respectively, and is presented within advertising and marketing in the consolidated statements of operations.

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 consolidated financial statements or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the consolidated 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.

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.

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and federal and state R&D tax credits.

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.

The Company recognized $ 0.005 million and $ 0.005 million of interest expense and penalties as a component of income tax expense during the year ended December 31, 2023 and 2022, respectively.

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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.

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.

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 December 31, 2023.

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 notes (refer to Note 19, Related-Party Transactions for further details on the Company’s Loans to Stockholders).

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 notes (refer to Note 17, Related-Party Transactions for further details on the Company’s Loans to Stockholders).

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 using the treasury stock method and convertible preferred stock using the as-if-converted method.

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 Year Ended December 31,

noncumulative dividend to convertible preferred stockholders

undistributed earnings to participating securities

Net loss attributed to common stockholders—basic

undistributed earnings reallocated to common stockholders

Net loss attributed to common stockholders—diluted

Weighted-average shares of common stock—basic

Dilutive effect of convertible preferred stock

Net loss attributed to common stockholders—basic

undistributed earnings reallocated to common stock

Net loss attributed to common stockholders—diluted

Weighted-average shares of common stock—basic

Dilutive effect of equity incentive awards

Weighted-average shares of common stock—diluted

Net loss per share

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For the Year Ended December 31,

Stock options and RSU awards

Equity incentive awards

Convertible debt

Convertible preferred stock

Series B-1 warrants

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 (“ASU 2016-13”) .

ASU 2016-13 introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk.

The CECL methodology utilizes a lifetime “expected credit loss”

measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired.

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures.

The amendments require disclosure of incremental segment information on an annual and interim basis.

The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in Accounting Standards Codification 280, Segment Reporting.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

The Company expects the adoption of the standard to result in additional segment footnote disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes - Improvements to Income Tax Disclosures.

The amendments require enhanced disclosures in connection with an entity's effective tax rate reconciliation, income taxes paid disaggregated by jurisdiction, and clarification on uncertain tax positions and related financial statement impacts.

The amendments are effective for annual periods beginning after December 15, 2024.

The Company does not expect the adoption of the amendments to have a significant impact on its financial statements.

Recently Adopted Accounting Pronouncements:

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 (“ASU 2016-13”) .

The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the

recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired.

Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance.

This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years.

The Company plans to adopt this CECL methodology effective January 1, 2023 and has applied the guidance prospectively.

The Company has determined that the impact of the CECL adoption would not have a material impact on the balances reported in its consolidated financial statements.

The Company adopted this ASU on January 1, 2023 and determined that ASU 2016-13 had no material impact on the Company’s consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No.

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The amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements:

In December 2019, the FASB issued ASU 2019-12, I ncome 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.

This ASU was effective for most public companies for annual periods beginning after December 15, 2020.

Early adoption was 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, consolidated financial statements, and related disclosures, and has determined that the adoption did not have a significant impact on its 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) and Derivatives and Hedging –

Contracts in Entity’s Own Equity (Subtopic 815-40) :

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity.

In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging:

Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities.

Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets.

The amendments in ASU 2020-06 are effective for public companies for fiscal years beginning after December 15, 2021.

The Company adopted the standard effective January 1, 2022 on a modified retrospective approach.

The Company has evaluated the effect that the updated standard had on its internal

processes, consolidated financial statements, and related disclosures, and has determined that the adoption did not have a significant impact on its 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), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , which addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options.

The amendments in this update are effective for all companies for annual periods beginning after December 15, 2021.

The Company adopted the standard effective January 1, 2022.

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.

ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of U.S.

This ASU was effective for most public companies for annual periods beginning after December 15, 2020.

Early adoption was 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.

Note 3 The Reverse Recapitalization and Related Transactions

On the Closing Date, the Company consummated the previously announced mergers contemplated by the Business Combination Agreement.

In connection with the closing of the Business Combination, the Company changed the name from “VPC Impact Acquisition Holdings III, Inc.”

to “Dave Inc.,”

and the Surviving Entity operates under the name “Dave Operating LLC.”

Upon the consummation of the Business Combination, in accordance with the terms and conditions of the Business Combination Agreement, all issued and outstanding Legacy Dave common stock was converted into shares of Common Stock at the Exchange Ratio.

At closing, VPCC transaction costs of $ 22.6 million were paid, which reduced the proceeds from VPCC and reduced APIC.

Additionally, $ 5.1 million of the costs were capitalized and included within deferred issuance costs in the consolidated balance sheet for the years ended December 31, 2021, and reduced APIC at closing.

The remaining $ 10.7 million in transaction costs were accrued for at closing.

Upon closing the Business Combination, Legacy Dave received $ 7.0 million in cash proceeds after transactions costs of $ 22.6 million were paid and released from VPCC’s trust account, net of redemptions of $ 224.2 million.

At closing, each non-redeemed outstanding share of Legacy Dave Class A common stock was converted into one share of Class A Common Stock.

Upon consummation of the Business Combination, the shares of Legacy Dave held by Legacy Dave shareholders converted into 10,707,440 shares of Common Stock, including 9,193,358 shares of Class A Common Stock and 1,514,082 shares of Class V Common Stock.

While the legal acquirer in the Business Combination was VPCC, for accounting and financial reporting purposes under U.S.

GAAP, Legacy Dave is the accounting acquirer and the Business Combination was accounted for as a “reverse recapitalization.”

A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Dave in many respects.

Under this method of accounting, VPCC was treated as the “acquired”

Accordingly, the consolidated assets, liabilities, and results of operations of Legacy Dave became the historical consolidated financial

statements of Dave, and VPCC’s assets and liabilities were consolidated with Legacy Dave’s on the Closing Date.

Operations prior to the Business Combination are presented as those of Dave in reports subsequent to the Closing Date.

The net assets of VPCC were recognized at their carrying value immediately prior to the closing with no goodw ill or other intangible assets recorded and were as follows, net of transaction costs (in millions):

Other current liabilities

Accrued expenses

Earned liabilities

Warrant liability - public

Warrant liability - private

Net assets acquired

Additionally, as part of the recap italization, 168,515 shares o f VPCC Class A common stock held by founders of VPCC (the “Founder Holders”) were exchanged with 168,515 shares of Dave Class A Common Stoc k, 49,563 (or “Founder Holder Earnout Shares”) of which will be subject to forfeiture if the vesting condition is not met over the five year term following the Closing Date as follows:

Sixty percent ( 60 %) of the Founder Holder Earnout Shares ( 29,737 Founder Holder Earnout Shares) shall immediately become fully vested and no longer subject to forfeiture upon the occurrence of Triggering Event I, which is defined as the first date on which the Common Share Price is equal to or greater than $ 400 afte r the Closing Date, but within the Earnout Period (as defined in the Business Combination Agreement);

provided, that

(i) in the event of a change of control pursuant to which Dave Stockholders receive, or have the right to receive, cash, securities or other pr operty attributing a value of at least $ 400 to each share of Class A Common Stock (as agreed in good faith by the Sponsor and the Board), then Triggering Event I shall be deemed to have occurred and;

(ii) in the event that, and as often as, the number of outstanding shares of Class A Common Stock is changed by reason of any dividend, subdivision, reclassification, recapitalization, split, combination, exchange or any similar event, then the applicable Common Share Price (as defined in the Business Combination Agreement) threshold (i.e., $ 400 ) will, for all purpo ses of the Business Combination Agreement (and an agreement with the Founder Holders (the “Founder Holder Agreement”)), in each case be equitably adjusted to reflect such change;

The remaining Founder Holder Earnout Shares ( 19,825 Founder Holder Earnout Shares) shall immediately become fully vested and no longer subject to forfeiture upon the occurrence of Tr iggering Event II, which is defined as the first date on which the Common Share Price is equal to or greater than $ 480.00 after the Closing Date, but within the Earnout Period;

provided that

(iii) in the event of a change of control pursuant to which Dave Stockholders receive, or have the right to receive, cash, securities or other property attributing a value of at least $ 480.00 to each share of Class A Common Stock (as agreed in good faith by Sponsor and the Board), then Triggering Event II shall be deemed to have occurred and;

(iv) in the event that, and as often as, the number of outstanding shares of Class A Common Stock is changed by reason of any dividend, subdivision, reclassification, recapitalization, split, combination, exchange or any similar event, then the applicable Common Share Price threshold (i.e., $ 480.00 ) wi ll, for all purposes of the Business Combination Agreement (and the Founder Holder Agreement), in each case be equitably adjusted to reflect such change.

The Founder Holder Earnout Shares were recognized at fair value upon the closing of the Business Combination and classified as a liability.

The issuance of the Founder Holder Earnout Shares were recorded as a liability with the offsetting amount within APIC because the Business Combination is accounted for as a reverse recapitalization.

The Founder Holder Earnout Shares will be remeasured to fair value at each reporting period end with changes in fair value going through the statements of operations.

Pursuant to the terms of the Business Combination Agreement, all of the issued and outstanding Series A, Series B-1 and Series B-2 redeemable convertible preferred stock and series A redeemable convertible preferred stock converted into 6,395,542 shares of Legacy Dave common stock immediately prior to the Business Combination.

Then, as of the closing of the Business Combination, all outstanding shares of Legacy Dave common stock converted into 10,707,440 shares of Class A Common Stock and Class V Common Stock.

Additionally, each of Legacy Dave options and warrants that were outstanding immediately prior to the closing of the Business Combination remained outstanding and converted into options and warrants for Dave Class A and Class V Common Stock equal to the number of the Company’s common stock, subject to such options or warrants, multiplied by the Exchange Ratio at an exercise price per share equal to the current exercise price per share for such option or warrant divided by the Exchange Ratio, with the aggregate amount of shares of Class A Common Stock and Class V Common Stock issuable upon exercise of such options and warran ts to be 1,002,383 .

Concurrently with the execution of the Business Combination Agreement, VPCC entered into Subscription Agreements (the “Subscription Agreement”) with certain investors (the “Subscription Investors”) pursuant to which the Subscription Investors agreed to purchase, and the Company agreed to sell to the Subscription Investors, an aggregate of 656,247 shares of the Class A Common Stock for a purchase price of $ 320 per share, or an aggregate of $ 210 million in gross cash proceeds (the “PIPE Financing”).

On August 17, 2021 Alameda Research, a Subscription Investor agreed to pre-fund its obligation under the original Subscription Agreement to subscribe for 46,875 shares of Class A Common Stock for $ 15.0 million of th e aggregate PIPE Financing subscription amount.

On August 17, 2021, Legacy Dave issued a promissory note with a principal amount of $ 15.0 million to Alameda Research and amended the Subscription Agreement to satisfy Alameda Research’s obligation to pay the $ 15.0 million purchase price under the Alameda Subscription Agreement by way of a full discharge of Legacy Dave’s obligations to pay the principal under the promissory note.

Upon the closing of the Business Combination, the promissory note was automatically discharged upon the Company’s issuance of 46,875 shares of Class A Common Stock to Alameda Research.

The closing of the private placement occurred immediately prior to the closing date.

The number of shares of Common Stock issued immediately following the consummation of the Business Combination were as follows:

Common stock outstanding on December 31, 2021

Common stock activity between December 31, 2021 and January 5, 2022

Exercise of derivative asset and paydown of stockholder loans

Issuance of Class A common stock for stock option exercises

Repurchase of Class A common stock

Common stock outstanding prior to the Business Combination

Conversion of preferred stock to Class A common stock

Common stock attributable to VPCC

Adjustment related to Reverse Recapitalization*

Founder Holder shares

Conversion of 2019 convertible notes and accrued interest to Class A common stock

Exercise of Series B-1 preferred stock warrants, net of settlement

Issuance of Class A common stock pursuant to the PIPE financing

Total shares of common stock as of closing of Business Combination and related transactions

The corresponding adjustment to APIC related to the reverse recapitalization was comprised of (i) $ 175.3 million which represents the fair value of the consideration transferred in the Business Combination, less the excess of the fair value of the shares issued over the value of the net monetary assets of VPCC, net of transaction costs and (ii) $ 72.2 million which represents the conversion of the convertible preferred stock into Dave Class A Common Stock.

There were 1,002,383 Dave options outstanding immediately after the Business Combination.

Following the Business Combination, Dave warrants to purchase 357,635 shares of Class A Common Stock, consisted of (i) 198,254 public warrants listed on the Nasdaq and (ii) 159,381 private warrants, each with an exercise price of $ 368 per share, re mained outstanding.

Note 3 Marketable Securities

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Marketable securities

At December 31, 2022 and 2021, the Company’s marketable securities consisted of investments in a publicly traded money market mutual fund with a ticket symbol SSPXX.

At December 31, 2023 and 2022, the Company’s marketable securities consisted of investments in a publicly traded money market mutual fund.

The underlying money market instruments were primarily comprised of certificates of deposit and financial company asset backed commercial paper.

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The gain recognized in connection with the investment in marketable securities for the year ended December 31, 2023, was approximately $ 0.4 million and recorded as a component of interest income in the consolidated statements of operations.

The loss recognized in connection with the investment in marketable securities for the year ended December 31, 2021, was $ 0.001 million and was recorded as a component of interest expense in the consolidated statements of operations.

Note 5 Short-Term Investments

Below is a summary of short-term investments, which are measured at fair value as of December 31, 2022 (in thousands):

The gain recognized in connection with the investment in marketable securities for the year ended December 31, 2022, was $ 0.4 million and was recorded as a component of interest income in the consolidated statements of operations.

Note 4 Investments

Below is a summary of investments, which are measured at fair value as of December 31, 2023 (in thousands):

Gross Unrealized Gains

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Government securities

At December 31, 2022, the Company’s short-term investments consisted of investments in corporate bonds and notes, asset backed securities, and government securities with varying maturity dates between 2023 through 2027.

At December 31, 2021, the Company had no short-term investments.

Note 6 Member Cash Advances, Net

Below is a detail of Member cash advances, net as of December 31, 2022 (in thousands):

Below is a summary of investments, which are measured at fair value as of December 31, 2022 (in thousands):

Gross Unrealized Gains

Gross Unrealized Losses

Corporate bonds

Asset-backed securities

Government securities

The gross unrealized losses and fair values of available-for-sale investment securities that were in unrealized loss positions were as follows (in thousands):

Less Than 12 Months

12 Months or More

Unrealized Loss

December 31, 2023

Corporate bonds

Asset-backed securities

Government securities

Less Than 12 Months

12 Months or More

Unrealized Loss

December 31, 2022

Corporate bonds

Asset-backed securities

Government securities

The gain recorded in connection with investments for the year ended December 31, 2023, was $ 1.0 million, and was recorded as a component of interest income in the consolidated statements of operations.

The loss in connection with the investment in investments for the year ended December 31, 2022 was insignificant and was recorded as a component of interest income in the consolidated statements of operations.

Accrued interest of $ 0.8 million and $ 1.4 million is included in investments within the consolidated balance sheets for the period ended December 31, 2023 and December 31, 2022, respectively.

Unrealized losses on the available-for-sale investment securities as of December 31, 2023 and December 31, 2022 are primarily the result of increases in interest rates as a significant portion of the investments were purchased prior to the Federal reserve commenced interest rate increases in 2022.

The Company does not intend to sell nor anticipate that it will be required to sell these investments before recovery of the amortized cost basis.

As such, unrealized losses were determined not to be related to credit losses and the Company did not record any credit-related impairment losses on the available-for-sale investment securities during the year ended December 31, 2023 and 2022.

As of December 31, 2023, the contractual maturities of available-for-sale investment securities were as follows (in thousands):

Amortized Cost

Due in one year or less

Due after one year through five years

Note 5 Member Advances, Net

Member advances, net, represent outstanding advances, tips, and processing fees, net of direct origination costs, less an allowance for credit losses.

Below is a detail of Member advances, net as of December 31, 2023 (in thousands):

Days From Origination

Gross Member Advances

Allowance for Unrecoverable Advances

Allowance for Credit Losses

Member Advances, Net

Below is a detail of Member cash advances, net as of December 31, 2021 (in thousands):

Below is a detail of Member advances, net as of December 31, 2022 (in thousands):

Days From Origination

Gross Member Advances

Allowance for Unrecoverable Advances

Allowance for Credit Losses

Member Advances, Net

Member advances, net, represent outstanding advances, tips, and processing fees, net of direct origination costs, less an allowance for unrecoverable advances.

The roll-forward of the allowance for unrecoverable advances is as follows (in thousands):

The roll-forward of the allowance for credit losses is as follows (in thousands):

Opening allowance balance at January 1, 2023

provision for unrecoverable advances

provision for credit losses

amounts recovered

amounts written-off

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Opening allowance balance at January 1, 2022

provision for unrecoverable advances

provision for credit losses

amounts recovered

amounts written-off

Ending allowance balance at December 31, 2022

The provision for credit losses for the year ended December 31, 2023 was lower compared the year ended December 31, 2022, due primarily to improved collections performance throughout the year and lower amounts outstanding 31 days to 120 days from origination.

The increase in amounts written-off for the year ended December 31, 2023 compared to the year ended December 31, 2022, was primarily as result of higher member advance disbursements, which increased from $ 2,709 million to $ 3,629 million, offset by improved collections performance year over year.

Note 6 Property and Equipment, Net

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Note 7 Intangible Assets, Net

The Company’s Intangible assets, net consisted of the following (in thousands):

December 31, 2023

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Accrued Expenses

The Company’s accrued expenses consisted of the following (dollars in thousands):

The Company’s accrued expenses consisted of the following (in thousands):

December 31, 2023

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Other Current Liabilities

The Company’s other current liabilities consisted of the following (dollars in thousands):

December 31, 2023

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Note 9 Convertible Note Payable

On March 21, 2022, the Company entered into a Convertible Note Purchase Agreement (“Purchase Agreement”) with FTX Ventures Ltd., (the “Purchaser”) owner of FTX US (“FTX”), providing for the purchase and sale of a convertible note in the initial principal amount of $ 100.0 million (the “Note”).

On March 21, 2022, the Company entered into a Convertible Note Purchase Agreement (“Note Purchase Agreement”) with FTX Ventures Ltd., (the “Purchaser”) owner of FTX US (“FTX”), providing for the purchase and sale of a convertible note in the initial principal amount of $ 100.0 million (the “Note”).

The Note bears interest at a rate of 3.00 % per year (compounded semiannually), payable semi-annually in arrears on June 30th and December 31st of each year.

Interest may be paid in-kind or in cash, at the Company’s option.

Forty-eight months (the “Maturity Date”) after the date of the initial issuance of the Note (the “Issuance Date”), the Company will pay the Purchaser the sum of (i) the outstanding principal amount of the Note, plus (ii) all accrued but unpaid interest thereon, plus (iii) all expenses incurred by the Purchaser (the “Redemption Price”).

Interest may be paid in-kind or in cash, at the Company’s option.

Payment of the Redemption Price on the Maturity Date will constitute a redemption of the Note in whole.

During the term of the Note, the Note will be convertible into shares of the Company’s Class A Common Stock, at the option of the Purchaser, upon delivery on one or more occasions of a written notice to the Company electing to convert the Note or all of any portion of the outstanding principal amount of the Note.

The initial conversion price of the Note is $ 320.00 per share of Common Stock (t he “Conversion Price”).

The Conversion Price of

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The Note and the shares of Common Stock issuable upon conversion of the Note have not been registered under the Securities Act and may not be offered or sold absent registration or an applicable exemption from registration requirements.

Beginning on the twenty-four-month anniversary of the Issuance Date continuing until the Maturity Date, if the closing price of the Common Stock equals or exceeds 175 % of the Conversion Price for 20 out of the 30 consecutive trading days ending immediately preceding the delivery of the notice of the Company’s election to convert the Note, the Note will be convertible into shares of Common Stock at the option of the Company, upon delivery of a written notice to the Purchaser electing to convert the Note or all or any portion of the outstanding principal amount of the Note.

At any time prior to the Maturity Date, the Company may, in its sole discretion and upon delivery of a written notice to the Purchaser electing to prepay the Note, prepay the Note without penalty by paying the Purchaser 100 % of the Redemption Price.

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As of December 31, 2023, the outstanding balance of the Note, including paid in-kind interest, was $ 105.5 million.

Note 11 Note Payable

In August 2021, VPCC entered into an amendment to the private investment in public equity (“PIPE”) subscription agreement (“PIPE Amendment”) it previously entered into with Alameda Research Ventures LLC (“Alameda Research”) in connection with the proposed business combination with the Company (refer to Note 1 Business and Basis of Presentation).

The PIPE Amendment calls for a $ 15.0 million pre-funding, which was facilitated through the issuance of an unsecured promissory note by the Company to Alameda Research.

The Company’s obligations to repay the principal amount of the promissory note will be discharged through the issuance of 1.5 million shares of VPCC to Alameda Research at the closing of the business combination.

The promissory note bears an interest rate of the applicable short-term federal rate and is due at the earlier of (i) the one-year anniversary of the promissory note, or (ii) an event of default.

The Company has elected to measure the note payable debt instrument at fair value using the fair value option of ASC 825-10.

The Company determined that the feature to settle the promissory note with shares at the closing of the business combination is a contingently exercisable share settled put option that represents an embedded derivative instrument that requires bifurcation from the host promissory note.

Additionally, the feature to redeem the promissory note upon a default event is a contingently exercisable call option and represents an embedded derivative instrument that requires bifurcation from the host promissory note.

However, in accordance with ASC 815-15-25-1 criterion (b), since the Company has elected to apply the fair value option to the debt, the embedded features will not be separated from the debt host.

Upon the closing of the Business Combination, the promissory note was automatically discharged upon the Company’s issuance of 46,875 shares of Class A Common Stock to Alameda Research.

The closing of the note payable occurred immediately prior to the closing date of the Business Combination.

The fair value of the Promissory Note was $ 15.0 million as of December 31, 2021.

Refer to Note 2, The Reverse Recapitalization and Related Transactions for further details on the closing of the note payable.

On January 29, 2024, the Company repurchased the $ 105.5 million outstanding balance of the Note as of December 31, 2023 for $ 71.0 million.

For more information on the Purchase Agreement with FTX Ventures, see Note 21, Subsequent Events.

Note 10 Warrant Liabilities

As of December 31, 2022, there were 198,254 public warra nts (“Public Warrants”) outstanding and 159,381 private placement warrants (“Private Warrants”) outstanding.

As of December 31, 202 3, there were 6,344,021 public warra nts (“Public Warrants”) outstanding and 5,100,214 private placement warrants (“Private Warrants”) outstanding.

Public Warrants may only be exercised for a whole number of shares.

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The Company filed a registration statement covering the shares of Class A Common Stock issuable upon exercise of the Public Warrants and the Private Warrants.

under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis”

in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

If the Company’s shares of Class A Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

The Public Warrants and the Private Warrants have an exercise price of $ 368.00 per share, subject to adjustments and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

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in whole and not in part;

at $ 3.20 per warrant upon a minimum of 30 days’

prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value”

(as defined below) of the Class A Common Stock;

at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of the Class A Common Stock;

if, and only if, the closing price of Class A Common Stock equals or exceeds $ 320.00 per Public Share (as adjusted) for any 20 trading days within the 30 -trading day period ending three trading days bef ore the Company sends notice of redemption to the warrant holders.

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.

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 shares of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation.

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Additionally, in no event will the Company be required to net cash settle the Public Warrants.

The Private Warrants are identical to the Public Warrants, except that the Private Placement Warrants will be non-redeemable so long as they are held by VPC Impact Acquisition Holdings Sponsor III, LLC, which was the sponsor of VPCC and an affiliate of certain of VPCC’s officers and directors prior to the Business Combination, (the “Sponsor”) or its permitted transferees.

If the Private Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Contemporaneously with the execution of the Debt Facility, the Company issued warrants to the Lenders as consideration for entering into the Debt Facility, representing a loan commitment fee.

The warrants vest and become exercisable based on the Company’s aggregated draw on the Debt Facility in incremental $ 10.0 million tranches and terminate upon the earliest to occur of (i) the fifth anniversary of the occurrence of a qualified financing event and (ii) the consummation of a liquidity event.

The holders of the warrants have the ability to exercise their right to acquire a number of common shares equal to 0.2 % of the fully diluted equity of the Company as of the closing date (“Equity Closing Date”) of the Company’s next equity financing with proceeds of at least $ 40.0 million (“Qualified Financing Event”) or immediately prior to the consummation of a liquidity event.

The exercise price of the warrants is the greater of (i) 80 % of the fair market value of each share of Common Stock at the Equity Closing Date and (ii) $ 120.0656 per share, subject to certain down-round adjustments.

The exercise price of the warrants is the greater of (i) 80 % of the fair market value of each share of Common Stock at the Equity Closing Date and (ii) $ 120.0656 per

share, subject to certain down-round adjustments.

The warrants meet the definition of a derivative under ASC 815 and will be accounted for as a liability at fair value and subsequently remeasured to fair value at the end of each reporting period with the changes in fair value recorded in the consolidated statement of operations.

initial offsetting entry to the warrant liability was an asset recorded to reflect the loan commitment fee.

The initial offsetting entry to the warrant liability was an asset recorded to reflect the loan commitment fee.

The loan commitment fee asset will be amortized to interest expense over the commitment period of four years.

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Determining the fair value of these warrants under this model requires subjective assumptions.

These estimates involve inherent uncertainties and the application of management’s judgment.

Immediately prior to the close of the Business Combination, all, or 1,664,394 of the vested warrants were exercised and net settled for 14,087 shares of Legacy Dave’s Class A Common Stock after applying the Exchange Ratio.

Note 13 Debt and Credit Facility

In January 2021, Dave OD Funding I, LLC (“Borrower”) entered into a delayed draw senior secured loan facility (the “Debt Facility”) with Victory Park Management, LLC (“Agent”), allowing the Borrower to draw up to $ 100 million from various lenders associated with Victory Park Management, LLC (the “Lenders”).

The Debt Facility has an interest rate of 6.95 % annually plus a base rate defined as the greater of three-month LIBOR (as of the last business day of each calendar month) and 2.55 % .

These estimates involve inherent uncertainties and the application of management’s judgment.

Note 11 Debt Facility

In January 2021, Dave OD Funding I, LLC (“Borrower”) entered into a delayed draw senior secured loan facility (the “Debt Facility”) with Victory Park Management, LLC (“Agent”), and allowed the Borrower to draw up to $ 100 million from various lenders (the “Lenders”) associated with Victory Park Management, LLC.

The Debt Facility had an interest rate of 6.95 % annually plus a base rate defined as the greater of the three-month London interbank offered rate ("LIBOR") as of the last business day of each calendar month and 2.55 % .

Interest is payable monthly in arrears.

The Debt Facility has certain financial covenants, including a requirement to maintain a minimum cash, cash equivalents, or marketable securities balance of $ 8.0 million as of December 31, 2022, the Company was in compliance with all covenants.

The Debt Facility contained certain financial covenants, including a requirement to maintain a minimum cash, cash equivalents, or marketable securities balance of $ 8.0 million.

On September 13, 2023, the Company executed the Third Amendment to the Debt Facility with the existing Lenders.

The Third Amendment, among other things:

(i) increases the secured loan facility commitment amount by $ 50 million to a total of $ 150 million;

(ii) extends the maturity date of the Debt Facility from January 2025 to December 2026 ;

(iii) adds a liquidity trigger threshold, measured as of the last day of any calendar month, equal to the lesser of (a) the trailing six-month EBITDA as of such date, (b) the product of (A) the trailing three-month EBITDA as of such date, multiplied by (B) two (2), and (c) zero ($0);

(iv) increases the minimum liquidity threshold, a requirement to maintain a minimum cash, cash equivalents, or marketable securities balance, from $ 8.0 million to $ 15 million (v) replaces LIBOR with the secured overnight financing rate ("SOFR") and updates interest rates to the base rate (or if greater, SOFR for such date for a 3-month tenor and 3.00 %) plus 5.00 % per annum on that portion of the aggregate outstanding principal balance that is less than or equal to $75 million, plus the base rate plus 4.50 % per annum on that portion of the aggregate outstanding principal balance, if any, that is greater than $75 million;

(vi) updates prepayment premiums for early or voluntary principal repayments and (vii) the Company's guaranty (the limited guaranty was secured by a first-priority lien against substantially all of the Company's assets) of up to $ 25 million of the Borrower's obligations under the Debt Facility has been terminated.

Payments of the loan draws are due at the following dates:

(i) within five business days after the date of receipt by the Borrower and the Company (each, a “Credit Party”) or any of their subsidiaries of any net cash proceeds in excess of $ 250 thousand in the aggregate during any fiscal year from any asset sales (other than certain permitted dispositions), the Borrower shall prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100 % of such net cash proceeds;

(ii) within five business days after the date of receipt by any Credit Party or any of their subsidiaries, or the Agent as loss payee, of any net cash proceeds from any destruction or taking, the Borrower shall prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100 % of such net cash proceeds;

(iii) within three business days after the date of receipt by any Credit Party or any of their subsidiaries of any net cash proceeds from the incurrence of any indebtedness of any Credit Party or any of their subsidiaries (other than with respect to permitted indebtedness), the Borrower shall prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100 % of such net cash proceeds;

and (iv) (a) if extraordinary receipts are received by any Credit Party in the aggregate amount in any fiscal year in excess of $ 250 thousand or (b) if an event of default has occurred and is continuing at any time when any extraordinary receipts are received by any Credit Party, then within five business days of the receipt by any Credit Party of any such extraordinary receipts, the Borrower shall prepay the loans or remit such net cash proceeds in an aggregate amount equal to (x) 100 % of such extraordinary receipts in excess of $ 250 thousand in respect of clause (a) above and (y) 100 % of such extraordinary receipts in respect of clause (b) above.

As of December 31, 2022 and December 31, 2021, respectively, the Company had drawn $ 75.0 million and $ 35.0 million on the Debt Facility and had made no repayments.

The debt facility matures in January 2025 .

In November 2021, Dave OD entered into an amendment of the Debt Facility which added a $ 20 million credit line (as amended, the “Credit Facility”) which has an interest rate of 8.95 % annually plus a base rate defined as the greater of three-month LIBOR (as of the last business day of each calendar month) and 2.55 % .

As of December 31, 2022 and 2021, the Company had $ 0 million and $ 20 million outstanding on the Credit Facility, respectively.

The Company paid off the $ 20 million credit line on November 11, 2022 when the debt matured.

(i) within five business days after the date of receipt by the Borrower of any net cash proceeds in excess of $ 0.25 million in the aggregate during any fiscal year from any asset sales (other than certain permitted dispositions), Borrower must prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100 % of such net cash proceeds;

(ii) within five business days after the date of receipt by Borrower, or the Agent as loss payee, of any net cash proceeds from any destruction or taking, the Borrower must prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100% of such net cash proceeds;

(iii) within three business days after the date of receipt by Borrower of any net cash proceeds from the incurrence of any indebtedness of Borrower (other than with respect to permitted borrower indebtedness), the Borrower will prepay the loans or remit such net cash proceeds in an aggregate amount equal to 100 % of such net cash proceeds;

and (iv) (a) if extraordinary receipts are received by Borrower in the aggregate amount in any fiscal year in excess of $ 0.25 million or (b) if an event of default has occurred and is continuing at any time when any extraordinary receipts are received by Borrower, then within five business days of the receipt by Borrower of any such extraordinary receipts, the Borrower must prepay the loans or remit such net cash proceeds in an aggregate amount equal to (x) 100 % of such extraordinary receipts in excess of $ 0.25 million in respect of clause (a) above and (y) 100 % of such extraordinary receipts in respect of clause (b) above.

As of December 31, 2023 and December 31, 2022, the Company had drawn $ 75.0 million on the Debt Facility and had made no repayments.

The Third Amendment was accounted for as a debt modification and, accordingly, the Company capitalized $ 0.4 million of financing costs, which will be recognized within the statement of operations evenly through maturity date of the Debt Facility, and no gain or loss was recognized.

As of December 31, 2023, the Company was in compliance with all covenants.

Note 12 Commitments and Contingencies

From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.

Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or claims will have a significant adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

(filed January 9, 2020 in the California Superior Court for the County of Los Angeles)

In January 2020, a former employee of the Company filed a complaint in the California Superior Court for the County of Los Angeles against the Company and the Company’s Chief Executive Officer, asserting claims for, among other things, breach of contract, breach of fiduciary duty, conversion, and breach of the implied covenant of good faith and fair dealing.

The Company settled this matter in January 2023 for approximately $ 6.0 million and is included in the Legal settlement accrual within the consolidated balance sheet for the period ended December 31, 2022.

The Company settled this matter in January 2023 for approximately $ 6.0 million which is included in the Legal settlement accrual within the consolidated balance sheet for the year ended December 31, 2022.

(filed September 16, 2020 in LA County Superior Court)

This is a purported class action lawsuit filed in connection with a July 2020 data breach.

The Company is in the process of settling this matter and the estimated settlement amount of approximately $ 3.2 million is included in the Legal settlement accrual within the consolidated balance sheets for the period ended December 31, 2022 and December 31, 2021.

This is a purported class action lawsuit filed in connection with a July 2020 data breach, asserting consumer protection and contract claims and seeking compensatory damages, punitive damages, injunctive relief and attorney's fees on behalf of a California class.

The Company is in the process of settling this matter on a classwide basis, and the estimated settlement amount of approximately $ 3.2 million is included in the Legal settlement accrual within the consolidated balance sheets for the years ended December 31, 2023 and December 31, 2022.

The Company has recorded an estimated legal settlement expense of $ 4.1 million relating to individual claims arising from the July 2020 data breach.

During 2023, the Company paid $ 3.9 million of the estimated $ 4.1 million in legal settlement expense.

The Company plans on settling the remaining amounts in Q1 2024.

Legal settlement amounts of approximately $ 0.2 million are included in the Legal settlement accrual within the consolidated balance sheets for the years ended December 31, 2023 and 2022.

Note 13 Leases

In November 2018, the Company entered into a sublease agreement with PCJW Properties LLC (“PCJW”), controlled by Company’s founders (including the Company’s current CEO), for general office space next to the aforementioned leased property in Los Angeles, California.

The lease term is five years subject to early termination by either party.

Under the terms of the sublease, monthly rent is $ 0.005 million, subject to an annual escalation of 4 %.

In January 2019, the Company entered into a lease agreement with PCJW for office space located in Los Angeles, California.

In January 2019, the Company entered into a lease agreement with PCJW Properties LLC (“PCJW”) for office space located in Los Angeles, California.

The lease term is seven years , beginning January 1, 2019 and ending December 31, 2025.

Monthly rent is $ 0.02 million, subject to an annual escalation of 5 %.

In December 2018, the Company entered into a sublease agreement with PCJW, controlled by Company’s founders (including the Company’s CEO), for general office space next to the aforementioned leased property in Los Angeles, California.

The lease term was five years subject to early termination by either party, beginning November 2018 and ending October 2023.

In November 2023, the Company extended the sublease for five more years ending October 2028.

Under the terms of the sublease, the current monthly rent is $ 0.006 million, subject to an annual escalation of 4 %.

In May 2020, the Company entered into a sublease with Whalerock for general office space in West Hollywood, California.

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The Company does not have any finance leases or sublease arrangements where the Company is the sublessor.

The Company’s leasing activities are as follows (in thousands):

Year Ended December 31

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Short-term lease cost

Variable lease cost

Total lease cost

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Cash paid for operating leases

Right-of-use assets obtained in exchange for new operating lease liability

Weighted-average remaining lease term - operating lease

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The future minimum lease payments as of December 31, 2023, were as follows (in thousands):

Third-Party Commitment

Related-Party Commitment

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Marketable securities

Short-term investments

Warrant liabilities - public warrants

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Total liabilities

December 31, 2021

Marketable securities

Derivative asset on loans to stockholders

Warrant liabilities

Total liabilities

The Company had no assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2023 and 2022.

The Company also has financial instruments not measured at fair value.

The Company has evaluated cash (Level 1), restricted cash (Level 1), Member advances (Level 2), accounts payable (Level 2) and accrued expenses (Level 2), and believes the carrying value approximates the fair value due to the short-term nature of these balances.

The Company has evaluated cash (Level 1), restricted cash (Level 1), accounts payable (Level 2), accrued expenses (Level 2) and Member advances (Level 3) and believes the carrying value approximates the fair value due to the short-term nature of these balances.

The fair value of the debt facility (Level 2) and convertible note payable (Level 2) approximates their carrying values.

Marketable Securities:

The Company evaluated the quoted market prices in active imarkets 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 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 similar items in active markets multiplied by the number of securities owned.

Short-Term Investments:

The following describes the valuation techniques used by the Company to measure the fair value of short-term investments held as of December 31, 2022.

No short term investments existed as of December 31, 2021.

The following describes the valuation techniques used by the Company to measure the fair value of investments held as of December 31, 2023 and December 31, 2022.

Government Securities

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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 $ 104.731 exercise price per share increases by a nominal amount of $ 1.727 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 $ 109.565 .

Th e 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 consolidated balance sheets.

Interest earned on the non-recourse promissory notes was reported as interest income and changes in the fair value of the call option were reported as other income or expense 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 December 31, 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 of $ 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 (in thousands):

Opening value at January 1, 2021

Amendment to loan to stockholder

Change in fair value during the year

Ending value at December 31, 2021

Change in fair value during the year

Exercise of call option

Ending value at December 31, 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:

Expected volatility

Risk-free interest rate

Remaining term

0.0 - 1.5 Years

Warrant Liability Related to Debt Facility:

As discussed further in Note 13, Debt and Credit Facility, in January 2021, the Company issued warrants contemporaneously with a debt facility that met the definition of a derivative under ASC 815.

This warrant liability was initially recorded as a liability measured at the estimated fair value, with the offsetting entry recorded as a loan commitment fees asset.

The derivative liability was subsequently recorded at fair value at each reporting period, with changes in fair value reflected in earnings.

Upon consummation of the Business Combination in January 2022, these warrants were exercised and settled.

The los s related to the change in fair value of the warrant liability in the year ended December 31, 2022, was $ 0.4 million, which is presented within changes in fair value of warrant liability in the consolidated statements of operations.

A roll-forward of the Level 3 warrant liability is as follows (in thousands):

Opening value at January 1, 2021

Initial fair value at the original issuance date

Change in fair value during the year

Ending value at December 31, 2021

Change in fair value during the year

Exercise of warrant

Ending value at December 31, 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 year ended December 31, 2021:

Expected volatility

Risk-free interest rate

Remaining term

0.0 - 1.5 Years

Note Payable:

As discussed in Note 11, Note Payable, the Company has elected to measure the note payable at fair value using the fair value option of ASC 825-10.

The Company identified an embedded derivative related to a convertible feature in

its promissory note and in accordance with ASC 815-15-25-1 criterion (b), since the Company has elected to apply the fair value option to the debt embedded features will not be separated from the debt host.

The note payable is carried on the Company’s consolidated balance sheet as a current liability estimated at fair value with changes in fair value reflected in earnings.

Upon consummation of the Business Combination in January 2022, this note payable was paid down and settled.

The loss related to the change in fair value of the promissory note for the year ended December 31, 2022 was $ 0.01 million, which is presented within interest expense in the consolidated statements of operations.

Opening value at January 1, 2021

Fair value at issuance

Change in fair value during the year

Ending value at December 31, 2021

Change in fair value during the year

Discharge of obligation through the issuance of Common Stock

Ending value at December 31, 2022

Public Warrants:

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The derivative liability was 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 public warrant liability for year ended December 31, 2022, was $ 7.4 million, which is presented within changes in fair value of public warrant liability in the consolidated statements of operations.

The gain related to the change in fair value of the public warrant liability for year ended December 31, 2023 , was $ 0.1 mill ion, which is presented within changes in fair value of public warrant liability in the consolidated statements of operations.

A roll-forward of the Level 1 public warrant liability is as follows (dollars in thousands):

Opening value at January 1, 2023

Change in fair value during the period

Ending value at December 31, 2023

Private Warrants:

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The derivative liability was 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 private warrant liability for year ended December 31, 2022 was $ 6.4 million, respectively, which is presented within changes in fair value of private warrant liability in the consolidated statements of operations.

A roll-forward of the Level 3 private warrant liability is as follows (dollars in thousands):

related to the change in fair value of the private warrant liability for year ended December 31, 2023 was $ 0.1 million, which is presented within changes in fair value of private warrant liability in the consolidated statements of operations.

A roll-forward of the Level 3 private warrant liability is as follows (in thousands):

Opening value at January 1, 2023

Initial fair value at the merger date

Change in fair value during the year

Change in fair value during the period

Ending value at December 31, 2023

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Earnout Shares Liability:

As discussed further in Note 3, The Reverse Recapitalization and Related Transactions, as part of the recapitalization, 49,563 shares of C lass 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”).

As discussed further in Note 20, The Reverse Recapitalization and Related Transactions, as part of the recapitalization, 49,563 shares of C lass 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 (loss) gain related to the change in fair value of the Founder Holder Earnout Shares liabilities for year ended December 31, 2022, was $ 9.6 million, which is presented within changes in fair value of earnout liabilities in the consolidated statements of operations.

A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (dollars in thousands):

The gain re lated to the change in fair value of the Founder Holder Earnout Shares liabilities for year ended December 31, 2023, was $ 0.02 million, which is presented within changes in fair value of earnout liabilities in the consolidated statements of operations.

A roll-forward of the Level 3 Founder Holder Earnout Shares liability is as follows (in thousands):

Opening value at January 1, 2023

Initial fair value at the merger date

Change in fair value during the year

Change in fair value during the period

Ending value at December 31, 2023

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There were no other assets or liabilities that were required to be measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022.

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 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 the Company’s 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;

Illiquidity of stock-based awards involving securities in a private company;

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 our common stock remained relatively consistent before a potential public listing through a business combination with a special purpose acquisition company was first considered in 2021 (“SPAC Transaction”).

The fair value of the Company's common stock was estimated to be $ 29.92 per share as of August 5, 2019 (“August 2019 Valuation”) and $ 31.39 per share as of August 30, 2020 (“August 2020 Valuation”).

In 2021, the Company's management team first contemplated a SPAC Transaction, which was incorporated in the June 7, 2021 valuation that resulted in a fair value for its common stock of $ 277.44 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 for Dave’s common stock of $ 345.60 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 and B-2 preferred equity financings (“Series B Financing”).

Since no near-term exit was expected, the August 2019 Valuation was performed using the market approach, specifically the subject company transaction method was performed using a single option pricing model (“OPM”) as the allocation method.

As a result, the fair value of the Company’s Common Stock was inferred from the Series B Financing.

The August 2020 Valuation was performed using the market approach, specifically the guideline public company method (“GPCM”), and used a single OPM as the allocation methodology.

The GPCM was performed by first considering the Series B Financing’s implied revenue multiple from the August 2019 valuation report, and then was adjusted based on changes in the guideline public company’s multiples since the Series B Financing occurred, with consideration for adjustments based on the Company’s comparative operational performance between the periods.

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 valuation.

The common stock price per share in the SPAC Transaction scenario included in the October 2021 Valuation was determined based on the publicly traded price of the SPAC as of the valuation date.

Management’s estimated probability for each scenario occurring at each

valuation date was applied to the respective scenario’s indicated common stock value to arrive at the estimated fair value of common stock.

The increase in the fair value of the Company’s Common Stock between the August 2019 and August 2020 Valuations, and the June 2021 Valuation and the October 2021 Valuation was predominantly due to the Company’s progress towards completing the Business Combination that was not known or knowable at the earlier valuation dates.

As previously discussed, the August 2019 Valuation utilized the Series B financing to determine the value of common stock in a single OPM.

The August 2020 Valuation relied upon the GPCM with valuation multiples selected considering the implied multiples at the time of the Series B Financing, with appropriate adjustments to the multiples to account for changes in the Company’s financial and operational performance as well as to reflect changes in the guideline public companies’

multiples and comparative performance, from the close of the Series B financing to the August 2020 valuation date.

In early 2021, the Company first contemplated a SPAC Transaction and began taking the necessary steps to prepare for a business combination with VPCC.

The necessary steps undertaken to prepare for the Business Combination included meeting with VPCC and investment bankers, discussing timing expectations, and negotiating the preliminary letter of intent with VPCC.

As ongoing negotiations related to the Business Combination reflected an increased likelihood of a near-term exit transaction and/or liquidity event, the valuation of Dave’s equity as of the June 2021 Valuation took into consideration the indicated equity value implied by the negotiations as well as the uncertainty inherent in the future key milestones including execution of the Business Combination Agreement and VPCC’s shareholder vote.

Similarly, the increase in the common stock value to $ 345.60 per share in the October 2021 Valuation resulted primarily from an increase in the probability of the near-term SPAC Transaction closing and an increase in the value of common stock in that scenario due to the passage of time and an increase in the SPAC’s publicly traded price as compared to the SPAC Transaction’s negotiated pre-money valuation.

As a result, the increase in Dave’s Common Stock fair value between the valuation dates resulted directly from both the increase in the pre-money valuation and acceleration of the timing of an exit, from the Series B Financing to the Business Combination.

Note 17 Preferred Stock and Stockholders’

Note 15 Stockholders’ Equity

As of December 31, 2023, no shares of preferred stock were outstanding, and the Company has no present plans to issue any shares of preferred stock.

Pursuant to the terms of the Company’s amended and restated certificate of incorporation, shares of preferred stock may be issued from time to time in one or more series.

The Company’s Board of Directors are authorized to fix the voting rights, if any, designations, powers and preferences, the relative, participating, optional or other special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series of preferred stock.

The Company’s Board of Directors are able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects.

The ability of the Company’s Board of Directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control or the removal of existing management.

Pursuant to the terms of the Company’s amended and restated certificate of incorporation, shares of preferred stock may be issued from time to time in one or more series.

Class A and Class V Common Stock:

The Company’s Board of Directors has authorized two classes of common stock, Class A Common Stock and Class V Common Stock.

The Company had authoriz ed 500,000,000 and 100,000,000 sh ares of Class A Common Stock and Class V Common Stock, respectively.

Shares of Class V Common Stock have 10 votes per share , while shares of Class A Common Stock have one vote per share .

The holders of shares of Class A Common Stock and Class V Common Stock shall at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the Company’s stockholders.

Class V Common Stock a re convertible into shares of Class A Common Stock on a one -to-one basis at the option of the holders of Class V Common Stock at any time upon written notice to the Company.

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Note 16 Stock-Based Compensation

In 2017, the Company’s Board of Directors adopted the Dave Inc.

2017 Stock Plan (the “2017 Plan”).

In 2017, the Company’s Board of Directors adopted the Dave Inc.

2017 Stock Plan (the “2017 Plan”).

The 2017 Plan authorized the award of stock options, restricted stock, and restricted stock units.

On January 4, 2022, the stockholders of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan was previously approved, subject to stockholder approval, by the Company’s Board of Directors on January 4, 2022.

On January 4, 2022, the stockholders of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan was previously approved, subject to stockholder approval, by the Company’s Board of Directors on January 4, 2022.

Upon the consummation of the Business Combination with VPCC, the 2017 Plan was terminated and replaced by the 2021 Plan.

The maximum term of stock options granted under the 2021 Plan is 10 years and the awards generally vest over a four-year period.

On January 4, 2022, the stockholders of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan was previously approved, subject to stockholder approval, by the Company’s Board of Directors on January 4, 2022.

On January 4, 2022, the stockholders of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”).

The 2021 Plan was previously approved, subject to stockholder approval, by the Company’s Board of Directors on January 4, 2022.

The 2021 Plan became effective immediately upon the completion of the business combination with VPCC.

The Company recognized $ 26.7 million and $ 40.6 million of stock-based compensation expense arising from stock option and restricted stock unit grants which is recorded as a component of compensation and benefits in the consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively.

Stock Option Repricing:

In April 2023, the Company’s Board of Directors approved a repricing of certain previously granted and still outstanding vested and unvested stock option awards held by eligible employees, which was approved by stockholders on June 9, 2023.

As a result, the exercise price for these awards was lowered to $ 5.18 per share, which was the average per share closing price of the Company’s Class A Common Stock as reported on the Nasdaq Global Stock Market for the 30 trading days ending on and including June 9, 2023.

No other terms of the repriced stock options were modified, and the repriced stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates.

As a result of the repricing, 134,931 vested and unvested stock options outstanding as of June 9, 2023, with original exercise prices ranging from $ 22.09 to $ 23.18 , were repriced.

The repricing on June 9, 2023 resulted in incremental stock-based compensation expense of $ 0.2 million, of which $ 0.14 million related to vested stock option awards was expensed on the repricing date.

The remaining $ 0.06 million related to unvested stock option awards is being amortized on a straight-line basis over the weighted-average vesting period of those awards of approximately 1.3 years as of June 9, 2023.

In September 2023, the Company’s Board of Directors approved a repricing of certain previously granted and still outstanding vested and unvested stock option awards held by eight remaining eligible employees excluded from the aforementioned June 9 repricing.

As a result, the exercise price for these awards was lowered to $ 7.23 per share, which was the average per share closing price of the Company’s Class A Common Stock as reported on the Nasdaq Global Stock Market for the 30 trading days ending on and including September 13, 2023.

As a result of the repricing, 200,571 vested and unvested stock options outstanding as of September 13, 2023, with original exercise prices ranging from $ 22.09 to $ 23.18 , were repriced.

The repricing on September 13, 2023 resulted in incremental stock-based compensation expense of $ 0.2 million, of which $ 0.17 million related to vested stock option awards was expensed on the repricing date.

The remaining $ 0.07 million related to unvested stock option awards is being amortized on a straight-line basis over the weighted-average vesting period of those awards of approximately 1.0 years as of September 13, 2023.

Stock Options:

Management has valued stock options at their date of grant utilizing the Black-Scholes option pricing model.

The fair value of the underlying shares was estimated by using a number of inputs, including recent arm’s length transactions involving the sale of the Company’s common stock.

The following table presents the weighted-average assumptions used to value options granted during the year ended December 31, 2021:

Expected term

Risk-free interest rate

Expected dividend yield

Expected volatility

The Company had no stock options granted for the year ended December 31, 2022.

Expected term —The expected term represents the period of time that options are expected to be outstanding.

The fair value of the underlying shares was estimated by using a number of inputs, including recent arm’s length transactions involving the sale of the Company’s common stock.

Expected term —The expected term represents the period of time that options are expected to be outstanding.

As the Company does not have sufficient historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period.

Risk free interest rate —The risk-free interest rate is based on the implied yield available on U.S.

Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options.

Expected dividend yield —The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.

Expected volatility —Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption is based on historical volatilities of a peer group of similar companies whose share prices are publicly available.

Expected dividend yield —The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.

The Company identified a group of peer companies and considered their historical stock prices.

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Vested and exercisable, December 31, 2023

The weighted-average grant-date fair-value of options granted during the years ended December 31, 2022 and 2021 was $ 0 and $ 39.10 per share, respectively.

At December 31, 2023, total estimated unrecognized stock-based compensation cost related to unvested stock options prior to that date was $ 6.5 million, which is expected to be recognized over a weighted-average remaining period of 3.1 years.

During the year ended December 31, 2021, in accordance with the terms of a former executive’s severance agreement, the Company modified share-based payment awards by accelerating the vesting.

As a result of the modification, the Company recorded stock-based compensation of $ 2.1 million during the year ended December 31, 2021, which is included in the $ 7.4 million stock-based compensation expense.

The Company allowed certain stock option holders to exercise unvested options to purchase shares of Common Stock.

Shares received from such early exercises are subject to repurchase in the event of the optionee’s employment termination, at the original issuance price, until the options are fully vested.

As of December 31, 2022 and 2021, 5,555 and 16,665 shares of Common Stock were subject to repurchase at weighted-average prices of $ 22.09 and $ 22.09 per share, respectively.

Shares received from such early exercises are subject to repurchase in the event of the optionee’s employment termination, at the original issuance price, until the options are fully vested.

As of December 31, 2023 and 2022, 0 and 5,555 shares of Common Stock were subject to repurchase at weighted-average prices of $ 22.09 per share, respectively.

The shares issued pursuant to unvested options have been included in shares issued and outstanding on the consolidated balance sheets as such shares are considered legally outstanding.

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The derived service periods determined by the valuation for each of the nine tranches range from approximately 3 years to approximately 7 years .

Each tranche will be expensed monthly over the derived service period unless vesting conditions for a particular tranche are met, at which point all

remaining compensation charges related to that particular tranche will be expensed in the period in which the vesting conditions were met.

Each tranche will be expensed monthly over the derived service period unless vesting conditions for a particular tranche are met, at which point all remaining compensation charges related to that particular tranche will be expensed in the period in which the vesting conditions were met.

The following table presents the key inputs and assumptions used to value the options granted to the Chief Executive Officer on the grant date:

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Nonvested shares at December 31, 2023

The Company had no RSU activity during the year ended December 31, 2021.

At December 31, 2023, total estimated unrecognized stock-based compensation cost related to nonvested RSUs was $ 38.1 million, which is expected to be recognized over a weighted-average period of 2.0 years.

Restricted Stock Issued to Employees:

The Company did no t issue shares of restricted stock to employees during either of the years ended December 31, 2022 and 2021.

There was no unrecognized compensation cost related to employee unvested restricted stock as of December 31, 2022.

Activity with respect to Restricted Stock Issued to Employees is summarized as follows:

Weighted-Average

Nonvested shares at January 1, 2021

Nonvested shares at December 31, 2021

Restricted Stock Issued to Non-Employees:

The Company recognized $ 0 and $ 0.1 million of stock-based compensation expense related to restricted stock grants to non-employees for years ended December 31, 2022 and 2021, respectively.

Stock based compensation expense is presented within compensation and benefits in the consolidated statements of

There was no unrecognized compensation cost related to non-employee unvested restricted stock for the year ended December 31, 2022.

Activity with respect to Restricted Stock Issued to Non-Employee is summarized as follows:

Weighted-Average

Nonvested shares at January 1, 2021

Nonvested shares at December 31, 2021

During the quarter ended March 31, 2023, th e Company granted 629,454 RSUs to certain employees in six tranches.

Each of the six tranches contain service and market conditions.

The market conditions relate to the achievement of certain specified price targets.

Vesting commences on the grant date and the Company determined the fair value of the RSUs on the grant date to be approximately $ 3.0 million using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, risk-free interest rate, and volatility.

The derived service periods determined by the valuation for each of the six tranches range from approximately two years to approximately three years .

The following table presents the key inputs and assumptions used to value the RSUs granted during January 2023 that contain service and market conditions on the grant date:

Remaining term

Risk-free interest rate

Expected volatility

During October 2023, the Company granted 71,844 RSUs to c ertain employees in six tranches.

Each of the six tranches contain service and market conditions.

The market conditions relate to the achievement of certain specified price targets.

Vesting commences on the grant date and the Company determined the fair value of the RSUs on the grant date to b e approximately $ 0.2 milli on using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, risk-free interest rate, and volatility.

The derived service periods determined by the valuation ranges from approximately two years to approximately three years .

Each grant will be expensed monthly over the derived service period unless vesting conditions for a particular grant are met, at which point all remaining compensation charges related to that particular grant will be expensed in the period in which the vesting conditions were met.

The following table presents the key inputs and assumptions used to value the RSUs granted during October 2023 that contain service and market conditions on the grant date:

Remaining term

Risk-free interest rate

Expected volatility

Note 17 Related-Party Transactions

Leasing Arrangements:

For the years ended December 31, 2022 and 2021, the Company paid $ 0.3 million under lease agreements with PCJW for general office space in Los Angeles, California.

The following is a schedule of future minimum rental payments as of December 31, 2022, under Company’s sub-lease for the properties located in Los Angeles, California signed with PCJW (in thousands):

For each of the years ended December 31, 2023 and 2022, the Company paid $ 0.3 million under lease agreements with PCJW, which is controlled by the Company's founders (including the Company's CEO) for general office space in Los Angeles, California.

The following is a schedule of future minimum rental payments as of December 31, 2023, under Company’s sublease for the properties located in Los Angeles, California signed with PCJW (in thousands):

Related-Party Commitment

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Related-Party Exercise Receivable Promissory Notes:

During 2018, the Company received non-recourse promissory notes from certain employees, which allowed for the early exercise of stock options, with the exercise price to be paid back to the Company at a later date.

The notes for $ 0.1 thousand were secured by a pledge of 60,694 shares.

D uring 2020, the Company received a non-recourse promissory note from a certain executive, which allowed for the early exercise of stock options, with the exercise price to be paid back to the Company at a later date.

The note for $ 1.0 million was secured by a pledge of 32,812 shares.

T he promissory notes have a term of five years and carry stated interest rates between 1.5 % and 2.0 %, which are compounded annually.

Prior to the consummation of the Business Combination in January 2022, the promissory notes were repaid.

The amounts due as of December 31, 2022 and 2021, were $ 0 and $ 1.1 million, respectively.

On January 3, 2022, Legacy Dave entered into an agreement with a certain executive to transfer and sell shares of Legacy Dave common stock to Legacy Dave.

A total o f 4,580 shares of Legacy Dave’s common stock were repurchased for an aggregate purchase amount of $ 1.6 million, which resulted in an extinguishment of the related-party exercise receivable promissory notes.

Loans to Stockholders:

In 2019, the Company entered into loan, pledge, and option agreements (“Loans to Stockholders”) with various employees, who are also stockholders, to provide those employees cash in exchange for non-recourse promissory notes and call options, which allow the Company to acquire shares held by these stockholders.

The entire unpaid principal balance of these Loans to Stockholders, together with all accrued but unpaid interest, is due and payable upon the earlier (i) of August 12, 2026 ;

(ii) a liquidity event;

or (iii) upon the exercise of the call option by the Company.

These Loans to Stockholders carry stated interest rates of 1.87 %, which are compounded annually.

Please refer to Note 2, Significant Account Policies, for further details on the fair value of the derivative asset related to the Loans to Stockholders.

Upon consummation of the Business Combination in January 2022, all of the call options related to the Loans to Stockholders were exercised and the related loans were settled.

The Loans to Stockholders, inclusive of interest, were $ 0 and $ 15.2 million as of December 31, 2022 and 2021, respectively.

VPCC Financing Agreement

A Senior Partner at Victory Park Capital Advisors, LLC joined the board of directors of the Company upon closing of the Business Combi nation.

For more information about the VPC Financing Agreement, refer to Note 13, Debt and Credit Facility.

A total of 4,580 shares of Legacy Dave’s common stock were repurchased for an aggregate purchase amount of $ 1.6 million, which resulted in an extinguishment of the related-party exercise receivable promissory notes.

Debt Facility

Brendan Carroll, a Senior Partner at Victory Park Capital Advisors, LLC ("VPC") joined the board of directors of the Company upon closing of the Business Combi nation.

Interest expense related to the Debt Facility totaled $ 8.6 million for the year ended December 31, 2023.

For more information about the Debt Facility with VPC, refer to Note 11, Debt Facility.

Legal Services

The law firm of Mitchell Sandler LLC, of which the Company's director Andrea Mitchell is a partner, provided legal services to the Company, which totaled $ 0.8 million for the year ended December 31, 2023.

Note 18 Income Taxes

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Total deferred

Provision for income taxes

A reconciliation between the Company’s federal statutory tax rate and its effective tax rate for the years ended December 31, 2022 and 2021, is as follows:

Provision for (benefit from) income taxes

A reconciliation between the Company’s federal statutory tax rate and its effective tax rate for the years ended December 31, 2023 and 2022 is as follows:

Federal statutory tax rate

State taxes, net of federal benefit

Derivative asset

Non-deductible excess compensation

Warrant liability

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Research and development tax credit - federal

Return to provision

Change in valuation allowance

Effective tax rate

The major components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021, consists of the following (dollars in thousands):

The major components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022, consists of the following (dollars in thousands):

Deferred tax assets:

Net operating loss carryforward

Allowance for Member advances

Allowance for credit losses

Research and development tax credit

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Total net deferred taxes

As of December 31, 2022, the Company had $ 94.8 million of federal and $ 56.7 million of combined state net operating loss (“NOL”) carryforwards available to offset future taxable income.

As of December 31, 2023, the Company had $ 106.8 million of federal and $ 144.3 million of combined state net operating loss (“NOL”) carryforwards available to offset future taxable income.

The federal NOLs do not expire;

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The Company has not yet completed a comprehensive analysis of its past ownership changes.

Depending upon the degree of those past ownership changes, and any future ownership changes, annual limits may impair the Company’s ability to utilize NOLs and could cause federal and state income taxes to be due sooner than if no such limitations applied.

The realization of deferred tax assets is dependent upon future sources of taxable income.

Available positive and negative evidence is considered in making this determination.

Due to a history of losses and uncertainty as to future taxable income, realization of the deferred tax assets is limited to the anticipated reversal of certain deferred tax liabilities.

Due to a history of losses and uncertainty as to future taxable income, realization of the deferred tax assets is limited to the anticipated reversal of deferred tax liabilities.

Management determined that there were insufficient federal and state deferred tax liabilities to offset all of the federal and state deferred tax assets at December 31, 2023 and 2022.

Therefore, management believes it is more-likely-than-not that the net federal and state deferred assets will not be fully realized and has recorded valuation allowances in the amounts of $ 67.5 million and $ 48.0 million, as of December 31, 2023 and 2022, respectively.

A reconciliation of the Company’s gross unrecognized tax benefits as of December 31, 2022 and 2021 is as follows (dollars in thousands):

A reconciliation of the Company’s gross unrecognized tax benefits as of December 31, 2023 and 2022 is as follows (dollars in thousands):

Balance at beginning of year

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The federal statute of limitations remains open for the tax periods December 31, 2020 and thereafter.

The California statute of limitations remains open for the tax periods December 31, 2018 and thereafter.

The statute of limitations for the various other state jurisdictions remains open for the tax periods December 31, 2019, the initial filing period in the other jurisdictions, and thereafter.

The statute of limitations for California and various other state jurisdictions remains open for the tax periods December 31, 2019 and thereafter.

Note 19 401(k) Savings Plan

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The Company incurred expenses for employer matching contributions of $ 2.2 million and $ 2.1 million for the years ended December 31, 2023 and 2022, respectively.

Note 20 The Reverse Recapitalization and Related Transactions

On the Closing Date, the Company consummated the previously announced mergers contemplated by the Business Combination Agreement.

In connection with the closing of the Business Combination, the Company changed the name

from “VPC Impact Acquisition Holdings III, Inc.” to “Dave Inc.,” and the Surviving Entity operates under the name “Dave Operating LLC.”

At closing, VPCC transaction costs of $ 22.6 million were paid, which reduced the proceeds from VPCC and reduced APIC.

The remaining $ 10.7 million in transaction costs were accrued for at closing.

At closing, each non-redeemed outstanding share of Legacy Dave Class A common stock was converted into one share of Class A Common Stock.

While the legal acquirer in the Business Combination was VPCC, for accounting and financial reporting purposes under U.S.

GAAP, Legacy Dave is the accounting acquirer and the Business Combination was accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Dave in many respects.

Under this method of accounting, VPCC was treated as the “acquired” company.

Accordingly, the consolidated assets, liabilities, and results of operations of Legacy Dave became the historical consolidated financial statements of Dave, and VPCC’s assets and liabilities were consolidated with Legacy Dave’s on the Closing Date.

Operations prior to the Business Combination are presented as those of Dave in reports subsequent to the Closing Date.

The net assets of VPCC were recognized at their carrying value immediately prior to the closing with no goodwill or other intangible assets recorded and were as follows, net of transaction costs (in millions):

Other current liabilities

Accrued expenses

Earned liabilities

Warrant liability - public

Warrant liability - private

Net assets acquired

Additionally, as part of the recapitalization, 168,515 shares of VPCC Class A common stock held by founders of VPCC (the “Founder Holders”) were exchanged with 168,515 shares of Dave Class A Common Stock, 49,563 (or “Founder Holder Earnout Shares”) of which will be subject to forfeiture if the vesting condition is not met over the five year term following the Closing Date as follows:

Sixty percent ( 60 %) of the Founder Holder Earnout Shares ( 29,737 Founder Holder Earnout Shares) shall immediately become fully vested and no longer subject to forfeiture upon the occurrence of Triggering Event I, which is defined as the first date on which the Common Share Price is equal to or greater than $ 400 after the Closing Date, but within the Earnout Period (as defined in the Business Combination Agreement);

provided, that

(i) in the event of a change of control pursuant to which Dave Stockholders receive, or have the right to receive, cash, securities or other property attributing a value of at least $ 400 to each share of Class A Common Stock (as agreed in good faith by the Sponsor and the Board), then Triggering Event I shall be deemed to have occurred and;

Agreement) threshold (i.e., $ 400 ) will, for all purposes of the Business Combination Agreement (and an agreement with the Founder Holders (the “Founder Holder Agreement”)), in each case be equitably adjusted to reflect such change;

The remaining Founder Holder Earnout Shares ( 19,825 Founder Holder Earnout Shares) shall immediately become fully vested and no longer subject to forfeiture upon the occurrence of Triggering Event II, which is defined as the first date on which the Common Share Price is equal to or greater than $ 480.00 after the Closing Date, but within the Earnout Period;

provided that

(iv) in the event that, and as often as, the number of outstanding shares of Class A Common Stock is changed by reason of any dividend, subdivision, reclassification, recapitalization, split, combination, exchange or any similar event, then the applicable Common Share Price threshold (i.e., $ 480.00 ) will, for all purposes of the Business Combination Agreement (and the Founder Holder Agreement), in each case be equitably adjusted to reflect such change.

The Founder Holder Earnout Shares were recognized at fair value upon the closing of the Business Combination and classified as a liability.

The issuance of the Founder Holder Earnout Shares were recorded as a liability with the offsetting amount within APIC because the Business Combination is accounted for as a reverse recapitalization.

The Founder Holder Earnout Shares will be remeasured to fair value at each reporting period end with changes in fair value going through the statements of operations.

Then, as of the closing of the Business Combination, all outstanding shares of Legacy Dave common stock converted into 10,707,440 shares of Class A Common Stock and Class V Common Stock.

Upon the closing of the Business Combination, the promissory note was automatically discharged upon the Company’s issuance of 46,875 shares of Class A Common Stock to Alameda Research.

The closing of the private placement occurred immediately prior to the closing date.

The number of shares of Common Stock issued immediately following the consummation of the Business Combination were as follows:

Common stock outstanding on December 31, 2021

Common stock activity between December 31, 2021 and January 5, 2022

Exercise of derivative asset and paydown of stockholder loans

Issuance of Class A common stock for stock option exercises

Repurchase of Class A common stock

Common stock outstanding prior to the Business Combination

Conversion of preferred stock to Class A common stock

Common stock attributable to VPCC

Adjustment related to Reverse Recapitalization*

Founder Holder shares

Conversion of 2019 convertible notes and accrued interest to Class A common stock

Exercise of Series B-1 preferred stock warrants, net of settlement

Issuance of Class A common stock pursuant to the PIPE financing

Total shares of common stock as of closing of Business Combination and related transactions

There were 1,002,383 Dave options outstanding immediately after the Business Combination.

Note 21 Subsequent Events

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The Company recognizes in the consolidated financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the consolidated balance sheet, including the estimates inherent in the process of preparing the consolidated financial statements.

The Company’s consolidated financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the consolidated balance sheet but arose after the consolidated balance sheet date and before the consolidated financial statements were available to be issued.

On January 4, 2023, the Board approved an amendment to the Company’s certificate of incorporation to complete a 1-for-32 reverse stock split effective January 5, 2023 .

At a special meeting held on December 16, 2022, stockholders approved the reverse stock split.

The primary goal of the reverse stock split was to bring the Company’s stock price above the share bid price requirement for continued listing on Nasdaq.

The effects of the reverse stock split have been reflected in the consolidated financial statements and the footnotes.

On January 4, 2024, the Company entered into a purchase and sale agreement (the “Purchase Agreement”), pursuant to which the Company agreed to purchase a convertible promissory note in the original principal amount of $ 100.0 million previously issued by the Company to FTX Ventures Ltd.

(“FTX”) on March 21, 2022 (the “Note”) for consideration of $ 71.0 million in cash, subject to potential adjustments pursuant to certain change in control provisions specified in the Purchase Agreement (the “Transaction”).

The closing of the Transaction was conditioned upon the Bankruptcy Court’s approval of the Purchase Agreement and upon FTX not entering into an alternative transaction for the sale of the Note.

The Bankruptcy Court approved this transaction on January 26, 2024 and the Transaction was closed for consideration of $ 71 million in cash on January 29, 2024.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk