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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-04 compared with 2024-03-05 · 321 added, 333 removed, 747 unchanged (47% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023

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

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023

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Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REG ISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Dave Inc.

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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").

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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Marketable securities

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

ExtraCash receivables, net of allowance for credit losses of $ 22,703 and $ 20,310 as of December 31, 2024 and December 31, 2023, respectively

Prepaid income taxes

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11,551,528 and 10,683,736 shares issued at December 31, 2024 and December 31, 2023, respectively;

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

11,501,965 and 10,634,173 shares outstanding at December 31, 2024 and December 31, 2023

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

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Additional paid-in capital

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive gain

Accumulated deficit

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All intercompany accounts have been eliminated.

December 31, 2023

December 31, 2022

As of December 31, 2024

As of December 31, 2023

Cash and cash equivalents

Member advances, net of allowance for credit losses

ExtraCash receivables, net of allowance for credit losses

Debt facility commitment fee, current

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Interest expense

Legal settlement and litigation expenses

Other strategic financing and transactional expenses

Gain on extinguishment of liability

Gain on extinguishment of convertible debt

Changes in fair value of earnout liabilities

Changes in fair value of derivative asset on loans to stockholders

Changes in fair value of public and private warrant liabilities

Total other expense (income), net

Net loss before provision for (benefit from) income taxes

Provision for (benefit from) income taxes

Net loss per share:

Weighted-average shares used to compute net loss per share

Total other (income) expense, net

Net income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

Net income (loss) per share:

Weighted-average shares used to compute net income (loss) per share

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss )

(in thousands)

For the Year Ended December 31,

Net income (loss)

Other comprehensive gain (loss):

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

Comprehensive loss

Comprehensive income (loss)

See accompanying notes to the consolidated financial statements.

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Additional paid-in capital

Loans to stockholders

Treasury stock

Accumulated other comprehensive income (loss)

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Issuance of Class A common stock in connection with stock plans

Issuance of Class A common stock pursuant to the PIPE financing

Issuance of Class A common stock pursuant to the Merger Agreement

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

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

Repurchase of Class A common stock

Exercise of warrant for Class A common stock

Stockholder loans interest

Exercise of derivative asset and paydown of stockholder loans

Extinguishment of liability

Payment for fractional shares after reverse stock split

Stock-based compensation

Unrealized loss on available-for-sale securities

Unrealized gain on available-for-sale securities

Balance at December 31, 2023

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

Unrealized loss on available-for-sale securities

Balance at December 31, 2024

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Operating activities

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

Net income (loss)

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

Depreciation and amortization

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 public and private warrant liabilities

Gain on extinguishment of liability

Gain on extinguishment of convertible debt

Stock-based compensation

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Changes in operating assets and liabilities:

Member advances, service based revenue

ExtraCash receivables, service based revenue

Prepaid income taxes

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Other non-current assets

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Investing activities

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Purchase of property and equipment

Net disbursements and collections of Member advances

Net originations and collections of ExtraCash receivables

Purchase of investments

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Financing activities

Proceeds from PIPE offering

Proceeds from escrow account

Payment of issuance costs

Payment for fractional shares on reverse stock split

Proceeds from issuance of common stock for stock option exercises

Repurchase of common stock

Proceeds from borrowings on convertible debt

Proceeds from borrowings on debt and credit facilities

Repayment of borrowings on credit facility

Net cash provided by financing activities

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

Payment of costs for extinguishment of convertible debt

Repayment of borrowings on convertible debt, long-term

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents and restricted cash

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

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Operating lease liabilities recognized

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

Recapitalization transaction costs liability incurred

Conversion of convertible notes and accrued interest to Class A common stock in connection with the reverse recapitalization

Conversion of B-1 warrants to Class A common stock in connection with the reverse recapitalization

Discharge of PIPE promissory note in connection with the reverse recapitalization

Supplemental disclosure of cash (received) paid for:

Supplemental disclosure of cash paid for:

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

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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 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.

To help Members avoid punitive overdraft fees and access short-term liquidity, Dave offers cash advances through its flagship 0% interest ExtraCash product.

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 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 $ 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 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 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'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 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”.

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”).

Company Overview

Dave ("the Company") was launched in 2017 to provide a faster, more transparent, and lower-cost alternative to traditional financial institutions, particularly for those living paycheck to paycheck.

Inspired by the story of David vs.

Goliath, the Company set out to challenge legacy banking by leveraging technology to expand financial access and improve consumer financial health.

Through its fully integrated, mobile-first platform, the Company delivers innovative financial products designed to help underserved consumers manage their money more effectively.

The Company's mission is to level the financial playing field by providing intuitive, transparent, and accessible solutions that empower its Members to navigate life’s financial challenges with confidence.

Platform and Products

ExtraCash is a 0 % interest overdraft product offered through the Company's bank partner that provides Members with up to $ 500 of credit to bridge liquidity gaps between paychecks.

Using its proprietary AI-powered underwriting system, CashAI, the Company analyzes a Member’s checking account transaction data to determine eligibility and set the credit amount.

This fully automated process requires no credit check and does not rely on FICO or credit bureau data.

Once an ExtraCash transaction is initiated, repayment is scheduled based on the Member’s forecasted next paycheck or deposit date.

The Company designs and manages the complete risk management value chain—including underwriting, fraud and risk mitigation, payment processing, servicing, and collections.

Each ExtraCash transaction is underwritten by CashAI when a Member accesses the Dave App, enabling near real-time evaluation of transaction data.

This approach determines the optimal amount a Member can responsibly repay, delivering benefits for both the Member and the business.

Dave Checking:

Dave Checking is a digital demand deposit account offered through its bank partner with premium features, no account minimums or corresponding fees, and FDIC pass-through insurance.

Members can open a Dave Checking account in minutes through the Dave mobile application, add funds to their account, and begin spending using a Dave Checking virtual debit card.

Dave Checking accounts also include a physical Dave branded debit Mastercard (“Dave Card”) that can be used for everyday purchases and spending transactions as well as at any of the approximately 40,000 MoneyPass ATM network locations to make no-fee withdrawals at these in-network ATMs.

Dave Checking revenues are primarily driven by merchant interchange, incentives from Mastercard, interest on deposits paid by our partner banks, and other ancillary fees paid by customers (e.g.

out of network ATM fees, instant withdrawal fees).

Personal Financial Management

The Budget tool utilizes historical bank account data to identify recurring and common charges, enabling Members to anticipate upcoming transactions that may affect their account balances.

It also provides timely notifications when there is a risk of an overdraft.

Side Hustle is a streamlined job application portal for Dave Members to find supplemental or temporary work.

The portal focuses on “gig economy,” part-time, seasonal, remote and other flexible types of employment opportunities.

Members can apply to dozens of jobs in-app using saved information and credentials.

A side hustle can be an important part of a Member’s long-term financial health, as it allows Members to quickly address unexpected expenses or cash needs with incremental income.

The Company's 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 its relationship to its Members’ financial wellbeing.

The Company generates monthly subscription revenue from Members enrolled in the Company's Personal Financial Management service.

Note 2 Significant Accounting Policies

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At a special meeting held on December 13, 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 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.

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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 evaluates its relationships with its VIEs on an ongoing basis to help 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.

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Service Based Revenue, Net:

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.

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

ExtraCas h receivables 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 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.

Costs incurred by the Company to fund cash advances are treated as direct loan origination costs.

These direct loan origination costs are netted against advance-related income over the average expected contractual term of its advances.

Direct origination costs recognized as a reduction of advance-related income during the years ended December 31, 2023 and 2022, were $ 3.3 million and $ 5.5 million, respectively.

The Company encourages, but does not contractually require its Members who receive a cash advance to leave a discretionary tip.

The Company treats tips as an adjustment of yield to the advances and are recognized over the average expected contractual term of its advances.

Processing fees and overdraft service fees apply when a Member requests expedited ExtraCash.

At the Member’s election, the Company expedites the funding of ExtraCash funds within hours of the ExtraCash approval, as opposed to the customary two or three business days for ExtraCash that is transferring via the ACH network.

Processing fees are accounted for as non-refundable loan origination fees and are recognized as revenues over the average expected contractual term of its ExtraCash transactions.

Costs incurred by the Company to originate ExtraCash are treated as direct loan origination costs.

These direct loan origination costs are netted against ExtraCash-related income over the average expected contractual term of an ExtraCash.

Direct origination costs recognized as a reduction of ExtraCash-related income during the years ended December 31, 2024 and 2023 , were $ 3.5 million and $ 3.3 million, respectively.

The Company encourages, but does not contractually require its Members who receive ExtraCash to leave a discretionary tip.

For accounting purposes, the Company treats tips as an adjustment of yield to ExtraCash and are recognized over the average expected contractual term of its ExtraCash receivables.

Subscriptions

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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.

Subscription fees of $ 1 are received on a monthly basis from Members who subscribe to the Company’s application.

Subscription fees 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 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 monthly contract period.

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For price concessions, the Company has elected, as an accounting policy, to account for price concessions for the month at the end of the reporting month based on the actual amounts collected from 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.

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

Transaction Based Revenue, Net:

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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.

Interchange revenue is remitted 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, 2024 and 2023 , were $ 3.1 million and $ 2.6 million, respectively.

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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

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.

Processing costs consist of amounts paid to third party processors for the recovery of ExtraCash, tips, processing fees and subscriptions.

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

Except for processing and service fees associated with ExtraCash originations, whi ch are recorded net against revenue, all other processing and service fees are expensed as incurred.

Cash and Cash Equivalents

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Marketable Securities

Marketable securities consist of a money market mutual fund.

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.

Marketable securities consist of a publicly traded money market mutual fund.

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

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 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 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.

The Company recognizes these advances at the advanced amount and does not use discounting techniques to determine present value of advances due to their short-term nature.

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

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

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

ExtraCash Receivables

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

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

Members’ ExtraCash Receivables are treated as financial receivables under ASC 310 .

ExtraCash Receivables to Members are not interest-bearing.

The Company recognizes these ExtraCash Receivables at the origination amount and does not use discounting techniques to determine present value of originations due to their short-term nature.

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

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.

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

The Company pools its ExtraCash receivables, 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 ExtraCash receivables 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.

The Company immediately recognizes an allowance for expected credit losses at the time of the ExtraCash origination.

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 an ExtraCash receivable 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 ExtraCash outstanding term of approximately 11 days, ExtraCash receivables 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.

Any change in circumstances related to a specific Member ExtraCash receivables 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, 2024 and 2023 , were $ 7.3 million and $ 7.6 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.

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 and $ 1.4 million related to internally developed software no longer in service was fully amortized and written off as of December 31, 2024.

Amortization of internally developed software commences when the software is ready for its intended use (i.e., after all substantial testing is complete).

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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 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.

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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 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.

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, restricted cash, ExtraCash receivables, 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 $ 61.1 million and $ 40.9 million at December 31, 2024 and 2023, 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 advances balances as of December 31, 2023 and December 31, 2022.

The Company relies on agreements with Evolve, currently its only active bank partner, to provide ExtraCash and other deposit accounts, debit card services and other transaction services to them and their Members.

Given the size and consistent growth of the Company's Member base as well as how its product capabilities have been expanding, the Company recently announced an additional financial institution with which it will partner.

Refer to Note 21, Subsequent Events for further details regarding the Program Agreement entered into with Coastal Community Bank to become a sponsor for the Company's banking and ExtraCash products.

No Member individually exceeded 10% or more of the Company’s ExtraCash receivables balance as of December 31, 2024 and December 31, 2023 .

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

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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.

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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.

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 Class A 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.

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The Company recognizes forfeitures as they occur.

Restricted Stock Awards:

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.

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.

Performance-Based Restricted Stock Unit Awards:

Performance-based RSUs are valued on the grant date and the compensation cost is recognized over the requisite service period if and when the Company concludes it is probable that the performance metrics will be satisfied.

The grant-date fair value of the awards are not subsequently remeasured;

however, the Company reassesses the probability of vesting at each reporting period and records a cumulative adjustment to compensation expense based on the likelihood the performance metric will be achieved.

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.

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The Company has estimated $ 2.0 million and $ 1.3 million of uncertain tax positions as of December 31, 2024 and 2023, respectively, related to state income taxes.

and federal and state R&D tax credits.

and federal and state research and development 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.

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Segment Information

The Company determines its operating segments based on how its chief operating decision makers manage operations, make operating decisions, and evaluate operating performance.

The Company determines its operating segment 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 reportable segment.

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 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):

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 operations of the Company constitutes a single operating segment and reportable segment.

Refer to Note 20 Segment Information in the accompanying notes to the consolidated financial statements for further details.

Net Income (Loss) Per Share Attributable to Stockholders

The Company has two classes of participating securities (Class A common stock, par value $ 0.0001 per share, and Class V common stock, par value $ 0.0001 per share) issued and outstanding as of December 31, 2024 and December 31, 2023 (the Class V common stock and together with the Class A common stock, the “Common Stock”).

The rights, including the liquidation and dividend rights, of the holders of the Class A common stock and Class V common stock are identical, except with respect to voting.

Basic net income (loss) attributable to holders of Common Stock per share is calculated by dividing net income (loss) attributable to holders of Common Stock by the weighted-average number of shares outstanding.

Diluted net income (loss) per share attributable to holders of common stock is computed by dividing net income (loss) per share attributable to stockholders and the weighted-average number of shares outstanding and the effect of potentially dilutive stock options, warrants, and restricted stock using the treasury stock method.

The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to holders of common stock ( in thousands, except share data ):

For the Year ended December 31,

Net loss attributed to common stockholders—basic

undistributed earnings reallocated to common stock

Net loss attributed to common stockholders—diluted

Net income (loss) attributed to common stockholders—basic and diluted

Weighted-average shares of common stock—basic

Dilutive effect of equity incentive awards

Dilutive effect of stock options

Dilutive effect of RSU

Weighted-average shares of common stock—diluted

Net loss per share

The following potentially dilutive shares were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

Net income (loss) per share

The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive:

For the Year ended December 31,

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Convertible debt

The Company also excluded 11,444,235 public and private warrants and 49,563 earnout shares that were potentially dilutive from the computation of diluted net income (loss) for the years ended December 31, 2024 and 2023 , respectively, as including them would have been antidilutive.

Refer to Note 10 Warrant Liabilities and Note 14 Fair Value of Financial Instruments for further details.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted:

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.

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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.

The Company is currently evaluating the impact of this amendment on its financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses and in January 2025, the FASB issued ASU No.

2025-01, Clarifying the Effective Date.

The amendments requires entities to disclose the following amounts in each relevant income statement expense captions:

purchases of inventory, employee compensation, depreciation and intangible asset amortization.

Entities are also required to disclose the total amount of selling expense and the entities definition of selling expenses .

The amendments, as clarified by ASU No.

2025-01, are effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively or prospectively.

The Company is currently evaluating the impact of this standard on its financial statement disclosures.

Recently Adopted Accounting Pronouncements:

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

While the adoption has no impact on the Company's financial statements, it has resulted in incremental disclosures within the footnotes to its consolidated financial statements.

Refer to Note 20 Segment Information in the accompanying notes to the consolidated financial statements for further details.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326):

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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.

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.

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.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance for accounting for contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848.

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 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.

Note 3 Marketable Securities

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Corporate bonds

Asset-backed securities

Government securities

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Corporate bonds

Asset-backed securities

Government securities

Less Than 12 Months

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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 net realized gain recorded in connection with the sale of investments for the year ended December 31, 2024 , was $ 0.8 million, and was recorded as a component of interest income in the consolidated statements of operations.

The net realized gain recorded in connection with the sale of investments for the year ended December 31, 2023 , was $ 0.9 million, and was recorded as a component of interest income in the consolidated statements of operations.

Accrued interest of $ 0.09 million and $ 0.8 million is included in investments within the consolidated balance sheets for the years ended December 31, 2024 and December 31, 2023, respectively.

Unrealized losses on the available-for-sale investment securities as of December 31, 2024 and December 31, 2023 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.

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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):

Note 5 ExtraCash Receivables, Net

ExtraCash receivables, net, represent outstanding originations, tips, and processing fees, net of direct origination costs, less an allowance for credit losses.

Below is a detail of ExtraCash receivables, net as of December 31, 2024 (in thousands):

Days From Origination

Gross Member Advances

Gross ExtraCash Receivables

Allowance for Credit Losses

Member Advances, Net

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

ExtraCash Receivables, Net

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

Days From Origination

Gross Member Advances

Gross ExtraCash Receivables

Allowance for Credit Losses

Member Advances, Net

ExtraCash Receivables, Net

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

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Ending allowance balance at December 31, 2023

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.

The provision for credit losses for the year ended December 31, 2024 was lower compared the year ended December 31, 2023, due primarily to improved collections performance throughout the year, offset by increased provision expense due to higher amounts outstanding 120 days and under.

The decrease in amounts written-off for the year ended December 31, 2024 compared to the year ended December 31, 2023 , were also primarily as result of improved collections performance year over year despite higher ExtraCash originations, which increased to $ 5.1 billion from $ 3.6 billion year over year.

Note 6 Property and Equipment, Net

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No impairment charges were recognized related to long-lived assets for the years ended December 31, 2024 and 2023.

Amortization expense related to change in useful life of a certain definite-lived intangible asset for the year ended December 31, 2023 was $ 0.3 million, respectively.

Amortization expense related to change in useful life of a certain definite-lived intangible asset for the year ended December 31, 2024 was $ 0.8 million.

Amortization expense related to change in useful life of a certain definite-lived intangible asset for the year ended December 31, 2023 was $ 0.3 million.

Note 8 Accrued Expenses and Other Current Liabilities

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December 31, 2023

Accrued charitable contributions

Accrued compensation

Sales tax payable

Accrued professional and program fees

Accrued charitable contributions

Accrued negative account balances

Income taxes payable

Sales tax payable

Accrued charitable contributions includes amounts the Company has pledged related to charitable meal donations.

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These transaction costs were also capitalized and included within APIC in the consolidated balance sheets.

Note 9 Convertible Note Payable

Note 9 Convertible 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.

The Note bore 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”).

Forty-eight months (the “Maturity Date”) after the date of the initial issuance of the Note (the “Issuance Date”), the Company would 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”).

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

the Note is subject to adjustment for stock splits, dividends or distributions, recapitalizations, spinoffs or similar transactions.

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.

Once the Redemption Price has been delivered to the Purchaser, the Note will be canceled and retired.

The effective interest rate as of December 31, 2023 was 3.01 %.

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

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.

On January 29, 2024, the Company repurchased the $ 105.7 million outstanding balance of the Note as of January 29, 2024 for $ 71.0 million.

The Company reduced the net carrying amount of debt by unamortized debt issuance costs of $ 0.03 million at the extinguishment date.

The Company also incurred third-party costs totaling $ 1.3 million in conjunction with the settlement of the Note.

The third-party costs are included in the reacquisition price and the gain on extinguishment of $ 33.4 million was calculated as the difference between the net carrying amount of debt and the reacquisition price.

Note 10 Warrant Liabilities

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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.

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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.

On October 18, 2024, the Company executed the Fourth Amendment to the Debt Facility with the existing Lenders to expand the Company's borrowing capacity.

The amendment also updates interest rates to the sum of the base rate plus 5.00 % per annum on the aggregate outstanding principal balance and updates prepayment premiums for early or voluntary principal repayments, among other administrative terms.

The Fourth Amendment was accounted for as a debt modification and, accordingly, the Company incurred $ 0.03 million in associated costs which will be recognized within the consolidated statement of operations evenly through maturity date of the Debt Facility, and no gain or loss was recognized.

As of December 31, 2024, the Company was not in compliance with a specific debt covenant under its existing Debt Facility.

In particular, a breach existed relating to the Minimum Receivable Loan-to-Value ("LTV Ratio"), which exceeded the allowable limits set forth in the covenant.

The Agent, on behalf of the Lenders, provided a one-time limited waiver of this covenant, effective from October 18, 2024 until June 30, 2025.

This waiver is solely for that period and for addressing this specific breach, and does not constitute a waiver of any default or event of default under the Debt Facility.

As of December 31, 2024 and December 31, 2023 , 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 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, 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.

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

Other than as described below, 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.

However, legal proceedings and claims are subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, the Company will not incur material costs.

United States of America v.

and Jason Wilk (filed December 30, 2024 in the United States District Court for the Central District of California)

In January 2023, the Company received a Civil Investigative Demand from the Federal Trade Commission (the “FTC”) staff seeking information in connection with the sale, offering, advertising, marketing or other promotion of cash advance products and online financial services.

In response, the Company cooperated with the FTC staff while seeking to engage constructively with the FTC to resolve this matter.

On August 21, 2024, the FTC staff sent the Company a proposed consent order and draft complaint, alleging that the Company had violated Section 5(a) of the Federal Trade Commission Act ("FTC Act") which prohibits "unfair or deceptive acts or practices in or affecting commerce" and certain provisions of the Restore Online Shoppers’ Confidence Act related to the Company’s platform and offering of the ExtraCash Product (the “Complaint”), and advising that it would recommend the filing of an enforcement action if the Company did not settle the FTC’s claims.

The Company engaged in good faith negotiations with the FTC staff to settle the claims but these negotiations were unsuccessful, and on November 5, 2024, the FTC filed the Complaint in the United States District Court for the Central District of California against the Company.

The Complaint sought a permanent injunction, monetary relief for an unspecified amount and “other relief as the court determines to be just and proper.” The FTC then referred the case to the Department of Justice (the “DOJ”), and on December 30, 2024, the DOJ filed an amended civil complaint in the United States District Court for the Central District of California, naming the Company and our Chief Executive Officer, Jason Wilk as defendants (the "Amended Complaint").

The Amended Complaint alleges that Dave violated Section 5(a) of the FTC Act as well as the Restore Online Shoppers' Confidence Act.

The DOJ is seeking injunctive relief, civil penalties, monetary relief and other relief.

On February 28, 2025, we filed a motion to dismiss the DOJ’s Amended Complaint.

Although the Company believes that its practices have at all times been in compliance with applicable law, the outcome of any case in litigation is uncertain.

Therefore, for the year ended December 31, 2024, the Company recorded a $ 7 million litigation and settlement accrual for this matter.

Significant changes in the accrual may be required in future periods as the case progresses and additional information becomes available.

At this time, the Company is unable to reasonably predict the possible outcome of this matter due to, among other things, the fact that it raises difficult factual and legal issues and is subject to many uncertainties and complexities.

There can be no assurance that the Company will be successful in the litigation, and the Company may incur a loss in excess of the amount accrued.

The defense or resolution of this matter could involve significant monetary costs and have a material impact on the Company’s business, financial results and operations.

Note 13 Leases

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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.

Under the terms of the sublease, the lease term is approximately 12 months and the monthly rent is $ 0.14 million.

The Company began utilizing the office space in June 2021.

The lease was abandoned in August of 2022.

All leases were classified as operating and operating lease expenses are presented within Other operating expenses in the consolidated statements of operations.

1 unchanged sentence

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

Year Ended December 31

For the Year Ended December 31,

Operating lease cost

1 unchanged sentence

Total lease cost

Year Ended December 31

For the Year Ended December 31,

Other information:

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

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.

The Company has evaluated cash (Level 1), restricted cash (Level 1), accounts payable (Level 2), accrued expenses (Level 2) and ExtraCash receivables (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) approximates its carrying value.

Marketable Securities:

18 unchanged sentences

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, 2023 , was $ 0.1 mill ion, which is presented within changes in fair value of public warrant liability in the consolidated statements of operations.

The loss related to the change in fair value of the public warrant liability for year ended December 31, 2024 , was $ 0.9 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):

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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.

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.

The loss related to the change in fair value of the private warrant liability for year ended December 31, 2024 was $ 0.8 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):

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Earnout Shares Liability:

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 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.

As part of the recapitalization and business combination in January 2022, 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 v alue at each reporting period, with changes in fair value reflected in earnings.

The loss related to the change in fair value of the Founder Holder Earnout Shares liabilities for year ended December 31, 2024 , was $ 1.0 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):

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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.

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.

The Company recognized $ 37.3 million and $ 26.7 million of stock-based compensation expense arising from stock options, restricted stock unit grants and performance-based 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, 2024 and 2023, respectively.

Stock Options:

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At December 31, 2024 , total estimated unrecognized stock-based compensation cost related to unvested stock options prior to that date was $ 1.9 million, which is expected to be recognized over a weighted-average remaining period of 3.3 years.

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, 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.

On March 3, 2021, the Company granted the Chief Executive Officer stock options to purchase up to 358,001 shares of Common Stock in nine tranches.

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Expected volatility

Stock Option Repricing:

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.

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.

Restricted Stock Units:

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Weighted-Average

Nonvested shares at January 1, 2023

Nonvested shares at December 31, 2023

Outstanding shares at January 1, 2024

Vested and Released

Outstanding shares at December 31, 2024

At December 31, 2024 , total estimated unrecognized stock-based compensation cost related to nonvested RSUs was $ 30.3 million, which is expected to be recognized over a weighted-average period of 2.4 years.

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Each of the six tranches contain service and market conditions.

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

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.

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Expected volatility

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

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

Each of the six tranches contain service and market conditions.

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Expected volatility

During the quarter ended June 30, 2024, the Company's Board of Directors approved a modification to the price targets in the market conditions and the addition of alternative performance conditions for 333,275 unvested RSUs.

The modification of the unvested RSUs resulted in an incremental stock-based compensation expense of $ 1.0 million, which will be expensed monthly over the derived service period.

The weighted average modification-date fair value of the RSUs was $ 5.36 per award.

T he Company determined the fair value of the RSUs on the modification date 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 range from approximately one year to approximately two years .

The RSUs 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 will be expensed in the period in which the vesting conditions were met.

As a result of the modification, the RSUs are now classified as performance-based RSUs and included in the activity table below.

The following table presents the key inputs and assumptions used to value the RSUs modified during the quarter ended June 30, 2024:

Remaining term

Risk-free interest rate

Expected volatility

During the quarter ended September 30, 2024, the Company's Board of Directors approved a modification to the price targets in the market conditions and the addition of alternative performance conditions for 50,000 unvested RSUs and during the quarter the Company achieved the performance conditions.

The modification and achievement of the performance conditions resulted in an incremental cumulative stock-based compensation expense of approximately $ 0.4 million.

As a result of the modification, the RSUs are now classified as performance-based RSUs and included in the activity table below.

The 50,000 performance-based RSUs were subject to vesting as of December 31, 2024 and will be

considered vested and subsequently issued based upon the achievement of the remaining service requirement as outlined in the award agreements.

Performance-Based Restricted Stock Units:

The Company grants performance-based RSUs to certain executives and employees as part of its long-term incentive plan.

The performance-based RSUs are subject to the attainment of defined performance and service conditions, such as the Company's trailing twelve month adjusted EBITDA and specific share price targets, both subject to continued employment with the Company through certain dates.

The actual number of shares subject to the award is determined at the end of the performance period and may range from 0 % to 150 % of the target shares granted depending upon the terms of the award.

Activity with respect to Performance-Based RSUs is summarized as follows:

Weighted-Average

Outstanding shares at January 1, 2024

Vested and Released

Outstanding shares at December 31, 2024

During the year ended December 31, 2024 , the Company achieved certain performance conditions as outlined in its grant agreements and recorded a cumulative stock-based compensation expense of approximately $ 5.6 million.

Additionally, a total of 160,453 performance-based RSUs were subject to vesting as of December 31, 2024 and will be considered vested and subsequently issued to participants based upon the achievement of the remaining service requirements as outlined in the award agreements.

At December 31, 2024 , total estimated unrecognized stock-based compensation cost related to nonvested performance-based RSUs was approximately $ 4.9 million, which is expected to be recognized over a weighted-average period of 1.5 years.

Note 17 Related-Party Transactions

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The related-party components of the lease right-of-use assets, lease liabilities, short-term, and lease liabilities, long-term are presented as part of the right-of-use asset and lease liability on the consolidated balance sheets.

Related-Party Exercise Receivable Promissory Notes:

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 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:

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Excess interest expense carryforward

Section 174 R&E expenditures

Section 174 research and development expenditures

Total deferred tax assets

Deferred tax liabilities:

Property and equipment

Right of use asset

Prepaid expenses

Total deferred tax liabilities

7 unchanged sentences

Internal Revenue Code Section 382 imposes limitations on the utilization of NOLs in the event of certain changes in ownership of the Company.

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

The Company has started, but 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.

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Balance at end of year

As of December 31, 2023, the Company had $ 1.3 million of gross unrecognized tax benefits related to state income taxes and federal and state R&D tax credits.

As of December 31, 2024, the Company had $ 2.0 million of gross unrecognized tax benefits related to state income taxes and federal and state research and development tax credits.

The unrecognized tax benefits of $ 0.8 million as of December 31, 2024, would, if recognized, affect the effective tax rate.

Although it is possible that the amount of unrecognized tax benefits with respect to the uncertain tax positions will increase or decrease in the next 12 months, the Company does not expect material changes.

Although it is possible that the amount of

unrecognized tax benefits with respect to the uncertain tax positions will increase or decrease in the next 12 months, the Company does not expect material changes.

The Company recognized insignificant amounts of interest expense as a component of income tax expense during the years ended December 31, 2024 and 2023.

The income tax related accrued interest amounts were also insignificant as of December 31, 2024 and 2023, respectively.

On August 16, 2022, the President signed into law the Inflation Reduction Act of 2022 which contained provisions effective January 1, 2023, including a 15 % corporate minimum tax and a 1 % excise tax on stock buybacks, both of which we expect to be immaterial to our financial results, financial position and cash flows.

The Company is subject to examination by taxing authorities in the jurisdictions in which it files tax returns, including federal, California, and various other state jurisdictions.

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The Company incurred expenses for employer matching contributions of $ 2.1 million and $ 2.2 million for the years ended December 31, 2024 and 2023 , 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.”

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” 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;

(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 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

(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 ) 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.

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 warrants 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 the 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, remained outstanding.

Note 20 Segment Information

In accordance with ASC 280, Segment Reporting , the operations of the Company constitute a single operating and reportable segment.

This conclusion reflects the manner in which the Chief Operating Decision Maker ("CODM"), a joint responsibility, shared by the Chief Executive Officer and Chief Financial Officer , reviews financial information and makes operating decisions.

The determination of the reportable segment is based on the nature of the Company’s products and services, as well as the financial performance, on a consolidated entity-wide basis, that are regularly reviewed by the CODM to guide resource allocation and assess performance.

The Company’s operations, all of which are located in the United States, collectively support this single-segment structure.

No Member individually contributed to 10 % or more of the Company’s revenues for the years ended December 31, 2024 and 2023.

For further information regarding the Company’s products, services, and the accounting policies applied to its reportable segment, refer to Note 2 Significant Accounting Policies.

The key performance measure used by the CODM to make key operating decisions is consolidated net income (loss), as reported in the Consolidated Statement of Operations.

This measure to assess overall financial performance, identify areas for operation improvement, resource allocation and the allocation of budget between the provision for credit losses, processing and servicing costs, advertising and marketing, compensation and benefits and other operating expenses.

This measure helps to ensure alignment with the Company’s long-term financial objectives and supports consistent evaluation across all business activities.

The segment assets and liabilities reviewed by the CODM are those reported on the Company’s consolidated balance sheets, with particular focus on available liquidity, including cash, cash equivalents, investments, restricted cash, and ExtraCash receivables, offset by current liabilities and outstanding debt.

The following table presents selected financial information with respect to the Company’s single operating and reportable segment for the years ended December 31, 2024 and 2023:

Consolidated Statements of Operations

(in thousands)

For the Year Ended December 31,

Operating revenues:

Service based revenue, net

Transaction based revenue, net

Total operating revenues, net

Operating expenses:

Provision for credit losses

Processing and servicing costs

Advertising and marketing

Employee salaries

Stock-based compensation

Other compensation and benefits

Technology and infrastructure

Other operating expenses

Total operating expenses

Other (income) expenses:

Interest income

Interest expense

Gain on extinguishment of convertible debt

Changes in fair value of earnout liabilities

Changes in fair value of public and private warrant liabilities

Total other (income) expense, net

Net income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

Other operating expenses consist primarily of commitments to charity, checking product costs (program expenses, association fees, processor fees, losses from Member-disputed transactions, bank card fees and fraud), depreciation and amortization of property and equipment and intangible assets, legal fees, rent, certain sales tax related costs, office related expenses, public relations costs, professional services fees, travel and entertainment, and insurance.

Significant noncash items that impact net income (loss) include depreciation expense (see Note 6, Property and Equipment, Net), amortization expense (see Note 7, Intangible Assets, Net), changes in fair value of earnout liabilities (see Note 14, Fair Value of Financial Instruments), and changes in fair value of public and private warrant liabilities (see Note 14, Fair Value of Financial Instruments).

Note 21 Subsequent Events

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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, 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.

On March 3, 2025, the Company announced that its subsidiary had entered into a Program Agreement with Coastal Community Bank to become a sponsor for Dave’s banking and ExtraCash products.

Dave Members will begin onboarding to Coastal Community Bank as soon as Q2 2025.

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