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Item 9A. Controls and Procedures

2024-03-05 compared with 2023-03-13 · 56 added, 52 removed, 77 unchanged (58% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective, due to the material weaknesses in our internal control over financial reporting in our audited financial statements for the years ended December 31, 2022 and 2021 described below.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective, due to the material weaknesses in our internal control over financial reporting in our consolidated financial statements for the years ended December 31, 2023 and 2022 described below.

As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S.

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Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Management’s Report on Internal Controls Over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the framework in “Internal Control—Integrated Framework”

issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022, due to the material weaknesses in our internal control over financial reporting in our audited financial statements for the years ended December 31, 2022 and 2021, because:

We did not design and maintain certain formal accounting policies, procedures, and internal controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including internal controls over the period-end financial reporting process addressing financial statement and footnote presentation and disclosures, account reconciliations, and journal entries.

Additionally, the lack of a sufficient number of accounting and finance professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of Dave’s financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties within the finance and accounting functions.

We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of its financial statements, specifically, with respect to:

(i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately;

(ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel;

and (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored.

Dave is implementing a plan to remediate the material weaknesses described above.

Those remediation measures are ongoing and include (i) hiring additional accounting and IT personnel to bolster its technical reporting, transactional

accounting and IT capabilities;

(ii) designing and implementing controls to formalize roles and review responsibilities and designing and implementing formal controls over segregation of duties;

(iii) designing and implementing formal processes, accounting policies, procedures, and controls supporting Dave’s financial close process, including creating standard balance sheet reconciliation templates and journal entry controls;

(iv) designing and implementing IT general controls, including controls over change management, the review and update of user access rights and privileges and computer operations controls;

and (v) redesigning its internal controls around the allowance for unrecoverable advances to detect and prevent future errors.

Under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the framework in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023, due to the material weaknesses in our internal control over financial reporting in our consolidated financial statements for the year ended December 31, 2023, because:

• We did not maintain sufficient evidence of the performance and/or review of certain internal controls or complete remediation testing for certain internal controls over the period-end financial reporting process addressing financial statement and footnote presentation and disclosures;

• We did not maintain sufficient evidence of the performance and/or review of certain IT application controls for information systems that are relevant to the preparation of our financial statements.

During 2023, we made significant progress enhancing our internal control environment by completing an enterprise-wide risk assessment, process narratives, risk and control matrices, a subsequent gap analysis and performed targeted testing of the design and operating effectiveness of our internal control over financial reporting in efforts to remediate previously disclosed material weaknesses.

These efforts also include, but are not limited to:

adding additional resources in accounting and finance departments, utilizing third party specialists to assist with complex accounting matters and reduce risks associated with the lack of segregation of duties;

implementing a segregation of duties monitoring tool;

formalizing accounting policies and procedures;

implementing a new enterprise resource planning system to enhance the journal entry review and approval processes;

performing bank and balance sheet account reconciliations on a monthly basis;

implementing a SOX compliance and audit management platform;

and designing and implementing both

IT general controls and IT application controls around our product platform and core applications, including controls over:

change management, access security and IT operations.

We will continue to implement our plan to remediate the material weaknesses described above.

Those remediation measures are ongoing and include (i) ensuring our enterprise-wide risk assessment, risk and control matrices, process narratives and gap analysis continue to be updated to reflect our current accounting processes and internal control environment and (ii) ensuring internal control over financial reporting is adequately performed;

and (iii) ensuring sufficient testing is performed and the testing-related support and documentation are complete and accurate for the design and operating effectiveness of internal control over financial reporting.

For further details on our material weaknesses that existed during the years ended December 31, 2022 and 2021, please refer to our Form 10-K filed with the SEC on March 13, 2023 .

Changes in Internal Control over Financial Reporting

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Other Information.

On September 5, 2023, Dan Preston , a member of our Board of Directors , entered into a pre-arranged stock trading plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act.

Preston’s pla n provides for (i) the potential exercise of vested stock options and the associated sale of up to 24,125 shares of Dave Class A Common Stock and (ii) the potential sale of up to an additional 31,405 shares of Dave Class A Common Stock.

Preston’s plan commences on January 1, 2024 and expires on December 31, 2024 , subject to the plan's earlier expiration or completion in accordance with its terms.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Directors, Executive Officers and Corporate Governance

Except for the information regarding executive officers and directors, which is included in Part I, Item 1 of this Annual Report on Form 10-K, under “Information about our Executive Officers and Directors”, and our code of ethics, which is set forth below, the information required by this Item 10 will be included in our Proxy Statement to be filed with the SEC and is incorporated herein by reference.

Except for the information regarding executive officers and directors, which is included herein under “Information about our Executive Officers and Directors”, and our code of ethics, which is set forth below, the information required by this Item 10 will be included in our Proxy Statement to be filed with the SEC and is incorporated herein by reference.

Code of Ethics

The board of directors of Dave has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers and employees, including the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

The Code of Business Conduct and Ethics is available on the Corporate Governance section of Dave’s website.

In addition, Dave will post on the Corporate Governance section of its website all disclosures that are required by law or Nasdaq listing standards any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

The Code of Business Conduct and Ethics is available on the Corporate Governance section of Dave’s website.

In addition, Dave will post on the Corporate Governance section of its website all disclosures that are required by law or Nasdaq listing standards relating to any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

Executive Compensation

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Principal Accountant Fees and Services.

Our independent public accounting firm is Deloitte & Touche LLP, Los Angeles, CA, PCAOB Auditor ID 34.

The information required by this Item 14 will be included in our Proxy Statement to be filed with the SEC and is incorporated herein by reference.

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Agreement and Plan of Merger, dated as of June 7, 2021, by and among VPC Impact Acquisition Holdings III, Inc., Bear Merger Company I Inc., Bear Merger Company II LLC, and Dave Inc.

(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 7, 2021.)

Second Amended and Restated Certificate of Incorporation of Dave Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022.)

Certificate of Amendment to Second Amended and Restated Certificate of Incorporation of Dave Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 5, 2023.

Amended and Restated Bylaws of Dave Inc.

(incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022.)

Convertible Note, dated March 21, 2022, by and between Dave Inc.

and FTX Ventures Ltd.

(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 21, 2022).

Warrant Agreement, dated March 4, 2021, between Continental Stock Transfer & Trust Company and VPCC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on March 9, 2021).

Description of Securities ( incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K filed with the Commission on March 25, 2022).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Investor Rights Agreement, dated as of January 5, 2022, by and among the Company, the Sponsor, Janet Kloppenburg, Peter Offenhauser and Kurt Summers, and certain holders of Legacy Dave Capital Stock (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Lease by and between PCJW Properties LLC and Legacy Dave, dated as of January 1, 2019 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Sublease by and between PCJW Properties LLC and Legacy Dave, dated as pf December 1, 2018 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Amended and Restated 2021 Equity Incentive Plan and related forms of award agreements (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 13, 2022).

2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Employment Agreement, dated January 3, 2022, by and between Jason Wilk and Dave (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Employment Agreement, dated January 31, 2022, by and between Kyle Beilman and Dave (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on February 1, 2022).

(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 21, 2022).

Description of Securities ( incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K filed with the Commission on March 25, 2022).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Convertible Note Purchase Agreement, dated March 21, 2022, by and between the Company and FTX Ventures Ltd.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 21, 2022).

Executive Incentive Bonus Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 31, 2022).

Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on February 1, 2022).

Letter to the Securities and Exchange Commission from WithumSmith+Brown, PC, dated January 11, 2022 (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 21, 2022).

Executive Incentive Bonus Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 31, 2022).

Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on February 1, 2022).

List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 11, 2022).

Consent of Deloitte & Touche LLP.

Consent of Moss Adams LLP.

Power of attorney (included on the signature page hereof).

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§1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

Compensation Recovery Policy.

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Inline XBRL Taxonomy Extension Schema Document.

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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* The schedules to this Exhibit have been omitted in accordance with Regulation S-K

Item 601(b)(2).

Item 601(a)(5).

The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon its request.

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POWER OF A TTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John Ricci or Kyle Beilman as his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute, may do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joan Aristei or Kyle Beilman as his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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March 5, 2024

/s/ Teresa Aragones

/s/ Imran Khan

March 5, 2024

Teresa Aragones

/s/ Yadin Rozov

March 5, 2024

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 9A. Controls and Procedures